ESOS – What the government isn’t telling you

ESOS (Energy Savings Opportunities Scheme) is now in its second phase, with qualifying companies being required to register their ESOS status and certification with the government by 5th December 2019.

Typically, is the go-to location for information about government-related schemes, policies and legislation. It’s very good for the facts, but if you were looking for the bigger picture, you’d be looking in the wrong place. You’d also be fishing through the bucket loads of information to find the answer you need.

This is especially the case for the ESOS guidelines. The guidance that is present is useful – the website correctly informs you of the qualifying criteria of a UK “large undertaking, which essentially means any UK company that:

  • Employs 250 or more people, or
  • Has an annual turnover in excess of 50 million euro (£44,845,000), and an annual balance sheet total in excess of 43 million euro (£38,566,700), or
  • Is an overseas company with a UK registered establishment with 250 or more UK income tax paying employees.

It adds that:

  • If you are covered by ISO 50001, you need only tell the Environment Agency that you are compliant

Although it does also inform of the risks involved in not completing your ESOS assessment – namely a fine of up to £90,000 – we think it misses the point, it doesn’t explain the big benefits of ESOS.

According to the Carbon Trust most organisations could reduce their energy use by 15 to 20%. And each pound saved on energy is equivalent to an additional £20 of top line sales for a business with an average net operating margin of 5%. So an energy saving of £50,000 will have the same bottom line impact for your business as increasing your sales by £1million.

The guidance online suggests that, once your ESOS compliance is confirmed, you are done until the next phase in 4 years. The scheme should be encouraging companies to think about energy on a regular basis, and beyond ESOS they should realise the benefits of energy saving opportunities. This may be the biggest failing of ESOS, to have missed the opportunity to endorse proper energy management.

What you should be told

We know that ESOS can be the spark that starts the fire, in terms of making a significant difference to your carbon footprint and the amount you spend on energy. Simply put, ESOS may come around every 4 years, but the systems it encourages, such as energy profiling, should result in a long-lasting improvement for your business.

If your organisation does not currently invest in energy, or have an energy manager, an ESOS assessment can help define the potential value and return on investment of energy saving projects . Correctly approached your ESOS investment will pay for itself many times over.

You can get so much more out of ESOS than the government makes clear. We have written Top 10 Tips for turning ESOS into your Business Weapon, to help you exceed expectations.

Download our “Top 10 Tips for turning ESOS into your Business Weapon”
LCMB are experienced in all things energy and building management, our mission is to make your buildings work harder and your resources go further.

Our ESOS lead assessors can manage your ESOS assessment from conception to accreditation and if you want to go beyond compliance, and improve the return you get from your ESOS investment get in touch.

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