ESOS – just another box to tick, or a chance to go beyond compliance?

ESOS – just another box to tick, or a chance to go beyond compliance?
26 September 2017

ESOS – just another box to tick, or a chance to go beyond compliance?

ESOS first arrived in late 2014, with companies needing to be compliant by 2015. That meant even the most strategic of businesses faced a tight turnaround.

Now we are half way through the four-year window to get things right. But after the panic of 2015, have companies have taken note of what was included in their ESOS reports and implemented measures?

Secondly, how many have started planning for the next cycle of ESOS? We’ve been talking to our customers and the view is mixed. Those with smaller operations see that there isn’t much of a need to start before 2019. But those with larger operations, multi sites and transport fleets have opted the other way and have started to plan what to do and when.

Part of the response we have seen is about what companies are seeing ESOS as. Is it another regulatory requirement that a company must comply with to meet its ISO14001 certification? Or is it something that can be used to match and meet the ISO standard view on life of “continuous improvement”.

In my mind, it has to be one of continuous improvement, and ESOS actually provides a really good way to review progress. An annual review of energy consumption and measures should be done but the ESOS four-year cycle allows for a company to really see if progress has been made. Within a four-year period, investment in opportunities has time to be calculated, funding raised, detailed design done and implementation completed. Something that isn’t quite so apparent in a year review.

Using that cycle to review activity enables targets and KPIs to be met, with the audits providing evidence of progress and identifying the next round of opportunities.

The lightweight opportunities that we would have once seen of switching off lights and changing light bulbs shouldn’t really be what is being identified. Instead, it should be high value opportunities for demand side response with a revenue raising opportunity, better control and management and perhaps even generation of energy either on site or off. The audit carried out might be a better quality than the minimum requirements of ESOS and the BS standard, and maybe cost a little more, but the value gained will be payback.

But that is only for those using ESOS as an opportunity and not just as another regulatory burden. Those wanting to meet the regulation might be thinking about the use of the DEC assessment to get a short report which covers the same stuff that has been talked about for many years and in not too much detail. A low cost option for a company with few sites and wanting to comply.

So, what is the right thing to do? Clearly the first scenario is where all companies would like to be, but there are many that fall into the second category, and not necessarily by choice. And what do you think will happen?

Well, I predict that the gap that is already apparent between some companies’ sustainability and ability to move with the rapid future will become wider. It will be an indication of their preparedness for the future and resilience against unpredictable, fluctuating energy prices. This will reflect on the ability of some companies to continue to increase profitability.

To discuss the issues raised in this article in more detail or specific challenges that your business faces in the next round of ESOS, contact me at chris.stjohncox@ricardo.com