The energy team at WSP have already a wealth of experience after the first phase of ESOS, and with over a staggering £10 million worth of savings identified for a wide range of clients, there are some pointers that are worth sharing to help in making the second phase, pain free:
1. Get started early
Last time there was a rush towards the compliance date, after many participating organisations delayed a decision on how to comply (WSP even had enquiries two years after the deadline!). That meant costs were higher, timescales were compressed, and for some, the results were not as high quality as what would be hoped.
- Start the process early,
- Assign a certified ESOS lead assessor now,
- Make sure you are recording your energy data (consumption and cost, by month, for each site – plus transport fuel consumption).
- Review your last ESOS – What happened? If you didn’t invest, why not?
2. Streamline the process
To make things a bit easier in terms of data collection and reporting, use existing data or timeframes where you can. For ESOS you need to record annual energy consumption data, but you get to pick when the year runs to and from (as long as you include December 2018). So, if you are already collecting energy data for the CRC, or for the EU ETS – use the same for ESOS. Or, you could align the reporting period with your financial year and use the results in annual sustainability reporting. That should save you some time and effort in gathering data – and will make the figures and results easier to absorb.
3. Make ESOS More Useful
To make the process most useful to you, think about how you can make the audit process line up with any other initiatives in the company. Keep your Lead Assessor well informed about the wider business strategy, and they should be able to tailor the output so it can help with corporate goals and targets.
- Align with investment plans – tell your ESOS Lead Assessor about any maintenance and investment plans, which could help with the case for investment
- Think about how your company makes decisions – do they like lots of detail or do they want a PowerPoint presentation with key facts?
- What about corporate targets, or CO2 targets? Are these key factors in decision making?
- What payback period will they accept? Are they interested in third party capital?
4. Internal Team
A cross-function team makes all the difference between delivering savings, and just complying. The research found that teams led by the finance department tended to treat it as a compliance exercise, whilst those led via the Environmental or Engineering teams tended to deliver longer lasting savings.
5. Lead Auditor
Selecting a good Lead Auditor really does make a difference – not all auditors are equal. In particular, make sure they have a good knowledge of, and experience in your sector. This is especially important in industry, where processes and operations can vary so widely that an experienced assessor is critical.
6. Board Engagement
Engaging with the Board can be a challenge – and to get the funds for investing in saving energy, it will be needed. A considered approach to board engagement is going to be key for turning opportunities into savings.
- Spend some time on board engagement and develop a strategy to give yourself the best chance of success.
- Your Lead Assessor should be able to tailor their outputs to slot into your business cases.
- Emphasising wider benefits from an opportunity (e.g. production, safety and maintenance, and not just the financial case) can help to get things over the line.
- Agree with management the resources that will be needed to deliver ESOS compliance but also the support needed for implementation of the energy saving measures.
7. Corporate structure
Make sure and properly review corporate structure, and include all subsidiaries in your ESOS audit – starting with a good diagram of company structure helps here. This was an issue for compliance with some organisations last time, so the Environment Agency will be paying attention to this.
If you have operations in the EU, think about how they will need to comply – is an EU wide approach best for you? Each country has implemented the legislation slightly differently, so care is needed. For example, if you are part of a large multinational organisation and you have operations in Germany, chances are you’ll need to comply in Germany – even if you only have a small site in the country.
A review of the participating organisations found that the results of ESOS were often used to confirm existing business cases (external validation) – helping to secure funding. Many new opportunities were also identified – often after a fresh look at energy and transport data. On top of this, technology has moved on in the past few years, with new opportunities now more financially viable, such as battery storage and demand side response.
The ESOS compliance process does need some thought, but with a good strategy and learning from previous experience, it can deliver real savings – the challenge is getting them implemented. Research indicates that the rate of implementation of recommendations from last time was not great, but with a considered approach (taking account of the issues above), it will be possible to deliver ESOS compliance, and good savings both in terms of reduced emissions and reduced costs.
This blog was written by Paddy Pope, Associate in Sustainable Places and Energy who can be reached at [email protected]