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Mandatory energy audits

Energy-efficiency regulation is just another compliance burden – or is it? Business & Management looks at the potential gains to be had from mandatory energy audits.

Sustainability has rocketed up the business agenda over the past five years, not least due to the inclusion of environmental matters in corporate reporting regulations and implementation of the EU Energy Efficiency Directive, manifested in the Energy Savings Opportunity Scheme (ESOS) Regulations 2014. ESOS is mandatory for businesses with 250 or more employees or €50m turnover.

They must have an assessment or provide information that shows their existing energy efficiency activities are already compliant (eg, under International Standard ISO 50001). While this might seem like yet more box ticking, there is opportunity for FDs to leverage long-term cost savings from compliance.

While ESOS establishes a minimum requirement for measuring energy consumption and identifying opportunities to save it, using an audit to plan high-level alterations can prove valuable. The Carbon Trust stated that “simply complying with the regulations misses the point of ESOS” when up to 20% of a business’s annual energy cost could be waste through inefficient equipment.

This is an extract from the Business & Management Magazine, Issue 269, November 2018.  

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