The Insider: ESOS fables
By now I’m guessing you will have heard about ESOS. My first thought was “more work” followed by “jobs for the boys” but given that sometimes it’s good to get ideas from someone looking in from outside of the organisation, I’m learning to look upon it as an opportunity rather than a nuisance.
Just in case you haven’t heard about ESOS (Energy Savings Opportunity Scheme), here is a brief overview.
EU legislation will soon require most employers to undertake a formal energy audit of their organisation once every four years. If you have more than 250 staff, or fewer staff but an annual turnover in excess of £40m and a balance sheet exceeding £34m, you will need to comply. This includes charities, yet public bodies are exempt – I have no idea why. I should have thought they would be the first to require auditing. Anyway, the first audit must be complete by December 2015 so we have only a year to get our act together.
It’s important to fleet managers because as well as including energy used in buildings and industrial processes, the audit will include your company car, van and truck fleet; and your grey fleet vehicles. Energy used by staff commuting, or travelling on business by bus or train is excluded.
This is not just a one-way audit for the sake of counting beans. It has been designed with a view to identifying quantified consumption and savings opportunities, and then making recommendations on how those savings can be achieved.
Companies need to appoint a lead assessor with appropriate knowledge and experience.
These can be internal staff or external professionals listed on an Environment Agency (the scheme administrator) approved register. However if you already have ISO50001 accreditation, I understand you should meet the terms of ESOS. Whether that accreditation includes fleet information as standard, I haven’t been able to establish.
In theory you could also qualify as an ISO50001 internal auditor and given the ESOS audit requirement is here to stay and looking at the prices offered for training, this might be something worth looking at, both in terms of long-term company savings and also one’s personal career development. I can’t imagine these audits are going to be cheap. By the way, if you don’t have ISO50001 it’s recommended you go for ESOS compliance first, since the former can apparently take some time to complete. But the lead assessor who carries out your initial review should be able to advise.
Time is ticking because companies need to register with the Environment Agency by December 2014 or face penalties of up to £50,000.
Curiously, participants are not required to implement the energy efficiency recommendations identified by their ESOS assessments but presumably would be mad not to, having gone through the effort in the first place. There are estimates of an average 0.7% energy reduction being bandied about. Figures specific to fleet are suggested at 2% reduction in energy consumption for business travel in company car fleets and 1% for vans. For those individual fleets which aren’t yet managing fuel and mileage efficiently I shouldn’t be surprised if the figures were significantly higher.
As I alluded to in a previous month, our mileage capture scheme – which accurately measures the split of business and private mileage – saw us reduce the overall quantity of fuel purchased by a gratifying figure, and monitoring does improve overall cost where the employer and drivers are all paying for their fuel at the same rate. So at least our own fleet is already in a good position to report on that aspect.
Presumably the audit will also throw light on grey fleet usage, and encourage companies to look at whether they continue to allow staff to use their own cars for work, or opt for more use of short-term rental, which can often be a cheaper option than paying a large cost per mile via AMAP. I reckon the break even point is around the 100 miles mark, even allowing for home delivery and collection charges on top of the rental price, plus refuelling. Spreading the rental over two days can still be beneficial. Of course, not all of us are reimbursing at AMAP in the first place, and if it’s possible to safely and suitably use smaller rental vehicles then the savings will be greater. It’s just that some fleets haven’t worked that out yet.
So, ESOS is here to say and no doubt it will throw up a few other cost savings areas not yet thought of. UK Government predicts that it could help deliver savings of nearly £2bn across British business, and that’s not to be sniffed at.