With the disappointment of Copenhagen turning into history and the economic situation still tough, there is growing concern that not enough is being achieved to get businesses more energy efficient. But those that have 'switched on' say they are reaping the benefits.
Business spoke out forcefully, last month, after the failure of Copenhagen to deliver a binding
global agreement on climate change. The
CBI called for urgent action from Government and business in order to maintain the much-needed momentum to get a deal done internationally, while back at home getting
businesses more energy efficient.
Urgent action is required if we are to hit Government
emissions reduction targets, ensure a future independent supply of energy, and manage rising energy costs, the business lobby group said – a statement backed up by environmental groups and sustainability advice services, such as Business Link and Business in the Community’s Princes Mayday Network on Climate Change.
The
CBI’s Climate Change Tracker – a tool developed by the group to track progress against the priorities set out in the CBI’s 2007 report ‘
Climate Change: Everyone’s Business’ – found that 2009 saw a significant lack of progress in
energy efficiency. Government plans for reducing energy demand in new and existing homes and businesses continue to lag behind, it found, showing that for the third year running, policies to save energy are off track.
A survey of 2000 businesses by
Enworks, a business support programme coordinating
environmental advice and training in the North West, found similar results with only one fifth of companies surveyed planning to make any environmental improvements in 2010. This figure is down on 2009, when one third of businesses took some resource efficiency measures.
“It’s very disappointing,” says Enworks director Todd Holden. “We think the drop in activity is probably due to the tough economic climate – companies have cut back on staff and don’t have time for ‘extra’, more strategic things.”
Enworks’ survey revealed that 79 per cent of respondents said that the only thing that would make them take action would be legislation, followed by a significant threat to their business such as running out of energy or materials.
But businesses – even those that are struggling financially – are wrong to put off
sustainability issues, says Holden, because they can make a huge difference financially through costs savings.
“Those that weren’t planning to do anything in 2010 considered taking action a threat to their businesses. But those that have had environmental audits and made significant resource changes talked about the huge business opportunities they tapped into to cut costs and access new supply chains,” he explains.
“Our current programme is saving businesses in the North West £24 million per annum and the capital costs of those opportunities paid for themselves in just seven months – so it’s a false perception that they are capital intensive.”
With peak oil and an energy crisis looming within the next five to 10 years, every business should look at its energy use in particular, as a matter of urgent risk management, say environmental advice organisations.
Craig Esterhuizen, Quality Assurance manager at Herb UK, an organic hair product manufacturer in Lymington, Hampshire, says the company has transformed its business over the past three years with the support of Business Link.
“I went to one of Business Link’s business breakfasts and got started from there,” he says. “We had a Business Link advisor come and see us. They put in touch with
Surrey Sustainability Initiative, which did an environmental assessment of our company. They gave us some ideas and we went far beyond them in the end.”
Herb UK invested in a cardboard shredder to replace the plastic packaging, and started reusing the waste cardboard, which halved its cardboard waste, reducing costs for skip removal and eliminated costs of buying packaging materials. “We have definitely already paid for the shredding machine,” says Esterhuizen, who adds that the company was also using a lot of PVC but now use PolyEthylene bottles, which are more easily recycled.
The company also tackled the all-important energy usage issue, replacing all its old printers with new ones, with the help of an
‘Energy 500’ grant, and undertook an awareness-raising programme with staff using an energy meter, which enabled employees to track energy usage in the factory. Changing the printers alone, says Esterhuizen, provided a 35 per cent saving in energy use and other energy consumption has reduced five per cent year on year.
Herb UK also teamed up with the National Industrial Symbiosis Programme, which links businesses with another business that can make use of their waste. In this case Herb UK managed to find a recipient for its large chemical containers, which would otherwise go to landfill.
The knock-on business benefits have been significant, says Esterhuizen. Herb UK won an award in Sustainable Business from the New Forest Business Partnership and has also won Business of the Year for New Forest.
Despite a fire which almost destroyed the business in 2006 and the UK recession, Herb UK managed to rebuild its business from a net loss position to a net profit of £200,000 in 2008 and 2009 on a turnover of £2.9 million. Implementing a sustainability policy for the company has only helped this progression, says Esterhuizen.
“As we sell organic products our customers expect us to have good internal sustainability policies,” he says. “They know what they’re talking about and we’ve shown them what we’re doing in an honest way and it really paid off.”
Esterhuizen points to useful tools provided by organisations such as the Carbon Trust and Business Link as a starting point. “I suggest businesses use those tools to do a self-assessment. Then build a set of options for yourself and decide, which makes best business sense – what provides best return. That’s what we did – it wasn’t’ just environmental. Then one thing moves to the next and it becomes part of your business.”
The
Carbon Trust offers interest free loans of £3,000 to £500,000 for organisations to invest in energy saving projects. These can be used on upgrading equipment with a consequent reduction in overheads. Loans can be repaid over a period of up to four years and as the scheme is designed for energy savings to cover repayments, the loan will effectively pay for itself.
Any project can apply that can demonstrate energy saving in excess of the CO2 threshold of 1.5 tonnes of CO2/£1000 of the loan, which can be used on building technologies such as improving insulation, installing solar panels or upgrading boilers, as well as industrial technologies such as improving energy efficiency of refrigeration systems, heating and materials handling equipment.
The Carbon Trust also administers Enhanced Capital Allowances (ECAs) on behalf of the Government, which are a straightforward way for a business to improve its cashflow through accelerated tax relief. The
ECA scheme for energy-saving technologies encourages businesses to invest in energy-saving plant or machinery specified on the Energy Technology List (ETL) and provides businesses with 100 per cent first year tax relief on their qualifying capital expenditure.
Companies that have been proactive, are definitely reaping the benefits and making their businesses more secure.
Adnams Brewery in Suffolk has successfully used support from the
Prince’s May Day Climate Change Network to make 10-15 per cent savings on a waste management bill of £8,000 a year plus energy efficiency savings.
“We built an eco-efficient distribution centre with walls made from lime hemp block, a roof which rests on glued laminated beams from sustainable sources, grass sedum on roof, which prevents the need for heating in winter or air conditioning in summer, and grey water capture, which is used throughout the factory,” explains managing director Andy Wood. “We are now one of the most modern breweries in Europe – we recycle 100 per cent of our heat and are 25 per cent more efficient than any other brewery in UK and probably in Europe.”
Enworks’ Todd Holden insists that no one should ever think a problem is unsolvable. “We linked an oil-dependent tomato growing business with a local industry with a
Combined Heat and Power (CHP) plant to great success,” he says. “The CHP plant has a lot of warm air which is moist with high levels of CO2 so it is fantastic to feed into a greenhouse as it increases yield and reduces growing time.
“There are definitely innovative ideas out there to solve resource problems – they just have to be found. But if you don’t think about it, you won’t get a solution and you won’t deal with the energy risk to your business.”
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