Does your business have an energy strategy in place?

Recent studies suggest that you’re 50% more likely to be ahead of your market competitors if you’ve got a plan in place to tackle your energy consumption. There is a growing realisation in the corporate world that responsible, sustainable use of power and introducing an energy strategy provides a company with benefits far beyond financial savings.

Quick facts

• 40% of EDMs (energy decision makers) are now speaking to their employees about sustainability issues
• 59% of EDMs say energy strategy is important to the company board
• 1 in 5 companies spend at least £250,000 on energy each year
• 7 in 10 EDMs believe there are wider benefits to pursuing an energy-efficiency strategy
• Long-term energy strategies contribute to a company’s brand image and identity
• 59% of customers could make yearly savings of 70% but switching contracts
• The average annual business energy invoice is £3,061 for electricity and £856 for gas

Source: E.on & Telegraph

Making small changes

Centrica Business Solutions conducted a survey (energy live news) of over 1,000 companies, delving into their strategies for saving energy and their approaches to combatting waste. Of those surveyed, almost half (48%) had not introduced any plans or policies to tackle their energy usage, with examples of such methods given as LED lighting and insulation improvements. Of the 52% who had considered and implemented more sustainable energy solutions, 41% had reduced energy costs, and 25% reported improvements to their reputation. As well as this, over 20% said they had actually earned more profit – be that from increased exposure or from income generated by extra renewable energy produced onsite.

Utilising renewable energy

A way to start having a positive impact on the environment – and your company’s bank balance – is to move away from using fossil fuels and start utilising energy from more sustainable sources. Solar is one of the methods of renewable energy generation which is growing most rapidly. It’s also one of the most cost-efficient approaches to producing your own power, given that you can install solar panels on your existing buildings, rather than buying land, as you may need to for wind turbines. Solar panels often produce more energy than you’ll need for your premises which allows you to sell surplus power on – acting as a further source of income. Aside from producing your own green energy, there are also suppliers who source 100% of their energy from renewable sources. These include solar, wind, hydro and biofuel sources, with suppliers like Good Energy pledging to match your energy use over the past year with exclusively green power. It’s now easier than ever for your business to run solely on renewable energy!

What are the obstacles?

The Telegraph and E.on collaborated and produced a white paper investigating energy efficiency within businesses, based on YouGov surveys of EDMs. The results actually oppose what previous, more positive studies and surveys on the topic have to say. Ultimately, the 2017 white paper highlights that over a period of one year (2016-2017), businesses have taken their foot off the pedal when it comes to sustainable energy initiatives and usage, abandoning long-term energy strategies for short-term gains. The survey’s figures back this statement up: while 42% of businesses in 2016 planned to become self-sufficient for their energy needs, it had dropped to a mere 23% in 2017. Similarly, 40% of businesses in 2016 planned to generate revenue from surplus energy production, but this figure was only 30% a year later.

The real question is why? Why are businesses losing their interest in energy policy? Why are they becoming less committed to sustainable energy use? The answer to this may be answered in just four letters… ESOS. Otherwise known as the Energy Savings Opportunity Scheme, ESOS is a compulsory energy assessment scheme for UK companies, setting out criteria that must be met. Failure to comply resulted in heavy financial penalties, meaning that most organisations were forced to embrace the idea of energy efficiency and sustainable energy use. As these processes took place in 2016, it’s obvious that interest in energy policy from businesses would be high at the time. The following year, however, is a different story. It’s possible that in 2017, when the surveys in the white paper took place, interest in the cause was beginning to wane; the first compliance period was over and businesses may have felt that they had “done their bit”. This would explain why 66% of EDMs “never speak” to their employees about sustainability issues, and why only 21% of managers feel that their employees understand their company’s energy policy.

It’s clear to see that overall awareness surrounding energy efficiency has dwindled within organisations, and perhaps the only way forwards now is to introduce permanent regulations, so the effects of ESOS can continue but with more permanence. 47% of EDMs stated last year that the ever-rising price of energy is more of a threat to their business than in previous years, so perhaps a move towards efficiency and reduced consumption should be considered to combat this issue too.

Who’s leading the way?

It’s not all doom and gloom and, generally, awareness of environmental issues is becoming more widespread. With this in mind, a multitude of companies are pledging to put a bigger focus on greener energy sources and eco-friendly operations. Tesco and Coca-Cola are aiming to go 100% green within the next few years, while Lego has met all of its renewable energy targets three years ahead of schedule. They are achieving this through a mix of both investing in the means to produce their own green energy, and buying it from suppliers who use only renewable sources. Becoming self-sufficient by introducing solar panels and battery storage is particularly popular as businesses can then sell on their surplus energy to further add to their profits.

SMEs (small and medium-sized enterprises) are also getting on board with on-site renewable energy generation, a prime example being Hamerton Zoo Park in Cambridgeshire. They have installed wind turbines, solar panels, and a biomass boiler which power their entire zoo. Awarded with the title “Most environmentally-friendly zoo in Europe”, they sell back their excess energy to their supplier, Opus, improving overall profitability. Opus then uses this renewable power to supply other customers with energy, relying less on more polluting old-fashioned forms of energy generation.

One sector, however, which is pulling away significantly from the rest in terms of energy efficiency strategy is retail. 76% of retail managers know how their business buys its energy, compared to just 68% in the manufacturing world, and 61% within hospitality. Similarly, 40% of retail employees understand their company’s energy policy, while the respective figures for manufacturing and hospitality sectors are 15% and 29%. This disparity may be because of how energy spend is reflected within each of these sectors: a 20% reduction in energy costs in retail represents the same bottom line benefit as a 5% sales increase, which is enough of an incentive for retail managers to embrace energy strategies. Further to this, retailers have to be mindful of the impact that poor cost-cutting might have on the customer experience, potentially negatively affecting their sales.

We can create and implement your energy strategy

At Monarch, we offer bespoke monitoring and targeting services to help your business operate more sustainably. By looking at your past energy consumption and patterns of use, we can forecast trends in your gas, electricity and water usage, and identify ways to reduce these. From simple changes in routine in your business, to educating employees on the importance of green energy use, we will ensure that you’re moving forward with other corporations as renewable energy becomes the standard.

Useful links

Monarch: ESOS phase 1 and phase 2

Energy Saving Trust: Big businesses and renewable energy