Advice for businesses on energy assessments under the Energy Savings Opportunity Scheme

The Energy Savings Opportunity Scheme (ESOS) requires larger companies to carry out energy assessments every four years, which are used to identify cost-effective measures to increase efficiency.

The problem is, not all of them are complying. By a 29 January deadline, of the over 10,000 companies the Environment Agency identifies as qualifying for ESOS reporting, 6,000 had complied, 1,000 said they were going to comply possibly via the adoption of the ISO 50001 standard  and 3,000 had not done anything at all.

Increasing understanding

Energy auditing is far from a straightforward business, and reporting for freight companies can be particularly tricky. Most use third party logistics service providers, which means the energy use and carbon emissions are considered ‘Scope 3’ – out of their control. But Energy Saving Trust’s Certification Manager Colin Smith thinks that getting a grip on this is about the fundamentals. He said:

“There’s a real black hole in both data and understanding. Companies want to know their supply chain impact. What we’ve been trying to do as part of our involvement with the Green Freight Europe program is improve the basics of energy reporting. With that knowledge, shippers of goods can tell third-party suppliers to report in certain ways, that satisfy the need for sustainable procurement. I believe that carriers want to show their commitment by reporting their impact.”

Avoiding pitfalls, seeing benefits

The penalties for non-compliance can be heavy – both financial and reputational. Fines start at £5,000, but can escalate to around £235,000. Smith said: “The most damaging penalties are often the non-financial. If you’re a company that’s been trumpeting sustainability credentials then are listed as not complying – that’s a reputational risk you can’t put a price on.

“Ultimately, this is not a tick-box exercise. The benefits are clear – if you audit well, and take action based on what you find, you will save money on fuel and become more profitable. Those profits can be used to increase competitiveness or invest in new kit. Most choose to do a bit of both.”

For companies with limited training budgets, quality reporting can also lead to prioritising where that money goes. Bosses can see the efficiency of their drivers, and identify which need further guidance to become more efficient.

Independent intervention

Energy Saving Trust might not be a big name among freight firms. Its experience in helping company fleets, however, increases efficiencies and reduces emissions and costs using data, analysis and tailored advice means there’s plenty of crossover. Smith said:

“The same principles apply, whether you’re talking about fleets of cars, vans, taxis or trucks. It’s about selecting the right vehicle for the right job, choosing routes wisely by minimising unnecessary journeys and driving in a fuel efficient way. For freight companies, it’s about transporting goods whilst cutting out unproductive miles by planning in an environmentally friendly way, and investing in energy efficiency measures, such as aerodynamics to trucks  and low rolling resistance tyres.”

Third party organisations like Energy Saving Trust are in a position to get to grips with the granularity of data around tonnes and distances of different shipments. Whilst there is some hesitancy about sharing fuel data, it’s also possible to present reports that show performance in a way that isn’t the ‘open book costing’ companies fear could damage their competitive edge.

The role of technology

Technology is already helping improve freight efficiency. Many companies’ route planning is remotely assisted by telematics, while in-cab technologies linked to GPS have the potential to push things much further. Smith explained:

“When the on-board system has things like the typography and direction of travel to hand, the smarter driving elements can be automated to the point where the person in the truck is more of a lookout. There’s a vision of trains of vehicles driving at the same pace, for a smoother, far more efficient drive.”

A simple business decision

It would be naïve to expect decision makers at freight companies to become deep green converts overnight, but the fact is, being able to demonstrate good sustainability credentials is good business. Larger companies such as IKEA and Procter & Gamble look to keep the environmental impact as low as possible throughout their supply chain – so freight companies that can’t show they’re tackling their fleet’s efficiency might well miss out on big contracts.

Terence Melton of mycarboncalculation.com – which has boiled freight carbon footprint number-crunching down to five key steps in an e-learning package recently verified by Energy Saving Trust – echoes this view.

He said: “Whether or not the directors believe in man-made climate change is irrelevant. Governments and other regulatory bodies will continue to impose stricter regulations and clients will demand further reductions to meet the expectations of the end consumer. So people need to get up to speed very quickly now in knowing how to calculate carbon emissions. We need low cost, quick and easy ways to help people; using ready-made calculators without knowing how they work or what they measure just won’t cut it anymore.”

For freight firms looking to stay ahead, shots in the dark or, as recently seen with ESOS, simply pretending the need to report energy and carbon figures doesn’t exist, cannot be part of a realistic business plan. While sustainable transport is undoubtedly a tricky area to quantify, there is help out there. Freight companies have a huge responsibility, as an integral part of consumer life, to play a role in global sustainability. They can deliver the goods.

Watch a free video course with five ways you can immediately reduce your carbon footprint at mycarboncalculation.com, and find out more about how our transport team can help your business through our services.