The benefits of an energy audit for your business
Maximise the business benefits of Energy Audits
Increasingly customers, investors and regulators expect businesses to pay as much attention to their environmental and societal sustainability as their financial model.
Energy audits imposed as part of the EU Energy Efficiency Directive (EED) came into effect starting 5th December 2015. Today conducting an audit at least every four years is mandatory for any organisation with more than 250 employees, or with an annual turnover in excess of €50 million and/or an annual balance sheet in excess of €43 million.
However, micro-enterprises and small and medium enterprises (SMEs) below these thresholds are also being strongly encouraged to see the business benefits of energy audits, rather than an avoidable regulatory burden.
In reality energy audits empower businesses by providing them with the data to understand their business in more detail. The best businesses will use this information to capture some of the competitive advantages outlined beneath.
Increased business competitiveness and culture
Energy audits provide a catalyst for cost savings and business improvement that deliver a more competitive organisation. Implementing best practice recommendations not only help a business run a leaner cost base, providing a more competitive market position, but also help nurture an environment of innovation. Leveraging energy audits to encourage innovative solutions can create a culture of competitive ideas that more widely benefit an organisation.
Better governance and a more attractive investment
Developing and implementing a capability in the area of sustainability demonstrates good governance and management flexibility that presents a positive business culture to investors and shareholders. By demonstrating your willingness to embed sustainable practice over time, you equally demonstrate an organisation’s willingness to adapt in an increasingly competitive global marketplace.
Compliance for public tender opportunities
Sustainable practice and energy efficiency form part of a competitive tender process for public sector contracts. Article 6 of the EED1 stipulates requirements of member states in public procurement of ‘high performing energy-efficient products, services and buildings’. Given that in 2009 public sector procurement accounted for an estimated 16% of EU GDP2, roughly €2,200 billion, that’s a serious consideration for any business.
Being a better corporate citizen
The EU’s own 2030 climate and energy framework sets 27% improvement in energy efficiency as a key target. Meeting that target will not only require the actions of government, but a dedication to better practice by businesses of all sizes, from MSME’s to global companies.
If we’re to continue to play a positive role in society, the business community must not only commit to more sustainable practice, but be seen to do so. More than ever that positive perception can feed directly back into our success. A 2015 Nielsen study4 showed 45% of consumers’ purchasing habits are heavily or very heavily influenced by the sustainable environmental practice of a company.
Some tips on getting your business audited
So what’s next? While auditing legislation may vary across EU member states, some standards are universal:
- Engage the services of an accredited, professional auditor.
- Don’t assume minimising the cost of an audit is the best saving for your business
Understand the national legislative environment as it impacts you, For example:
In the UK imposed EED under its Energy Savings Opportunities Scheme5, and audits must be undertaken by an ESOS Lead Assessor. Deadline for first compliance of the 5th December 2015 has passed, and enforcement action was expected from January 2016. Failure to comply imposes a £50,000 fine, with potential £500 additional for each working day in breach. It’s worth noting that although ESOS was initially implemented as a result of an EU directive, it’s thought to be unlikely that the upcoming British exit from the EU will impact this regulation now it is embedded in practice.
In Germany was a slow adopter, with legislative amendments coming into force in April 2015. Energy auditors must be registered with the Federal Agency of Economics and Export Control (BAFA), and audits must cover minimum 90% of total energy usage. Failure to comply incurs a €50,000 fine, although slow implementation means penalties are likely to be taken on a case by case basis.
In France was quick in implementing legislation, which was passed in July 2013. The initial audit will be deemed acceptable if it covers 65% of an organisation’s energy consumption, rising to 80% for following audits. Failure to comply will lead to a formal notice demanding action. Further penalties will be individual to a business, capped at 2% of the previous year’s annual turnover.
In Italy legislated for changes on 4th July 2014, although has no clear definition of audits other than they must be ‘proportional’ and ‘sufficiently representative’6. Energy intensive enterprises that fall below the mandatory EU threshold, being those with intensity over 2.4GWh/yr with energy costs above 3% of turnover, are likewise mandated for regular energy audits. Fines between €4,000 and €40,000 may be imposed for failure to comply.
In Spain was slow to implement, with the Royal Decree legislating for energy audits finally published on February 14th, 2016. The deadline for initial audits is set 9 months from that date, on November 14th, 2016. Audits should cover at least 85% of energy consumption, and the results communicated to the Ministry of Industry, Energy and Tourism within 3 months. Fines with a potential maximum of €60M can be imposed for failure to comply. Spain may have been slow on the uptake, but they’re serious about enforcing the legislation once implemented it seems.
At Epson we’ve already made a strong commitments to sustainability and the ‘triple bottom line’ of business inkjet printing, as evidences by our Make the Switch initiative. Our Environmental Vision 2050 further dedicates us to reducing CO2 emissions by 90% by 2050, total elimination of non-CO2 greenhouse gases, and a commitment to working with the local community to ensure positive environmental and societal impact.
It’s clear that energy audits as a catalyst for sustainable practice offer a wide range of benefits. Ultimately investing in a more sustainable organisation isn’t just smart business, it’s responsible business too. That should be a benchmark to which we all aspire.
To find out more about Epson's Make the Switch initiative, please click here.