Going green: Is it worth it for UK businesses?

What does it mean to be green? In our modern world, many customers, whether it be consumers, businesses, or public-sector organisations, expect the businesses they buy from to be sustainable and minimise the impact they have on the environment, locally and globally. Sustainability has become an integral part of the core values and visions of many corporations and even SMEs. Businesses such as Barclays and Iceland have been the taker of news headlines recently with their change to go green or implement drastic measures to become as sustainable as currently possible.

One of the worries businesses have, and which is more common within the SME sector, is the affordability of going green. In 2001 the Government introduced the Climate Change Levy (CCL), which was brought into as a way of motivating businesses to use less energy and operate in an environmentally friendly way. Before August 2015, companies who had procured renewable electricity could be exempted form CCL by purchasing a Levy Exemption Certificate (LEC), which is now phased out. This was an advantage for renewables as the price of renewable electricity as it drove the demand and the price decreased to either similar or lower prices than brown electricity.

LEC was replaced by a new scheme, the so-called Renewable Energy Guarantee of Origin (REGO) certificates. These provide complete transparency to anyone who wonders if a business sources their electricity from a renewable source. All EU member states are required to have a similar scheme. Businesses who want to lead the way of reducing their carbon footprint and be in line with the UK Government’s Clean Growth Strategy usually offset the small price premium on green energy with the advantages of a good brand reputation and additional angles for marketing to environmentally-conscious customers.

Even though there are schemes and taxes in place to motivate businesses, the government fundamentally just implement the ground work. Transforming your businesses into something sustainable can be done through changing the labour standards via your manufacturing methods or the materials you use to manufacture. Other things which move away from the work flow of your business can be identified in an energy audit. Larger UK businesses will be familiar with the Energy Saving Opportunity Scheme (ESOS), which is an assessment that businesses must carry out every 4 years. The purpose assesses the impact non-domestic properties have on the environment, and within the year 2019 there will be a phase 2 coming into law.

An energy audit, however, is extremely beneficial not only for larger businesses but also many SMEs as it allows them to pinpoint cost saving and carbon footprint reduction potential. If this sounds quite daunting to you, let an expert like eyebright help you get started. We would always recommend conducting an initial audit since there is no harm in getting visibility of your options and their feasibility, and you can always decide against ‘going green’ once you have the facts.

Depending on the outcome of the audit, you may only want to make simple changes such as sourcing green energy – in one of our previous blog posts we have made a case for green tariffs, which have become very competitive in recent years – and implementing certain behavioural changes. You can read more about behavioural changes in this blog post.

Getting smart meters installed and starting to monitor and analyse your energy usage to identify where you’re wasting business energy is next logical step and can be totally hassle free if you involve an expert. In many cases, there is a relatively easy fix for the identified problems and the financial impact can be huge.

Once these foundations are laid, you can consider energy efficiency improvements that require physical changes and smaller initial investments such as installing LED’s or Building Energy Management Systems. Payback times for such investments are shorter than you may think and you could achieve significant cost savings in the long run.

Depending on your premises and your business goals, you may consider generating your own energy and even exporting some of it to the grid. Factors could be whether you own or rent or own the buildings you operate in, the location of your business, or how much unused space you have available, to name only a few. Solar PV, CHP, or Wind are a feasible option for many UK businesses. Again, payback periods have improved for many forms of renewables, and some suppliers offer financing models with no capital expenditure required.

If you have any questions or would like to discuss how we can help you make your business greener, please get in touch!

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