Financing your journey to net zero

net-zero

As a business, keeping on top of your finances will be near the top of your priority list and may impact much of your decision making. When forming and implementing your business’s net zero strategy, you may be concerned about how much low-carbon technologies can cost to implement. 

Understanding what additional monetary support is available is key to helping alleviate the worry of meeting your net zero targets, so you don’t miss out or lose any momentum on any carbon reduction activities. 

Here are some recommendations we would advise exploring to reduce your business’s consumption levels, therefore saving money to reinvest into your decarbonisation efforts. 

ESOS 

The Energy Savings Opportunity Scheme (ESOS) is a mandatory energy assessment scheme for organisations in the UK that meet the qualification criteria. If you qualified for Phase 2 or your business employs more than 250 people, has an annual turnover more than £44m and an annual balance sheet total in excess of £38m, you should be reporting your ESOS findings. Many organisations now see ESOS as an opportunity and the clue is in its name. Your ESOS report will contain a list of energy saving recommendations – a great starting point for any business looking to reduce consumption. 

The Environment Agency is the UK scheme administrator and ensures that organisations who qualify, carry out an ESOS assessment every 4 years. Penalties can be applied to businesses who do not comply or fail to submit their ESOS assessment on time, however, if correctly done the long-term energy, cost and carbon savings made from better energy efficiencies can be reinvested into your business. 

Get ahead of the curve and start your ESOS Phase 3 survey here. 

Levy Exemption schemes 

Environmental charges currently account for around 36% of your electricity bill and 10% of your gas bill. Several environmental schemes have been introduced including Climate Change Levy (CCL), Contracts for Difference (CfD), Renewable Obligation (RO) and the Feed-in-tariff (FiT) to incentivise businesses to invest in renewable generation and efficient technologies. 

The costs associated with funding these schemes are recovered through environmental levies. However, the Government, with its aim of achieving net zero carbon emissions by 2050 is keen on keeping the cost of energy low to allow businesses to remain competitive, recognised these charges could impact the competitiveness for more energy intensive industries (EIIs) – providing exemption relief from some or all of these costs. 

Read more about available Levy Exemption schemes here. 

SECR (Streamlined Energy and Carbon Reporting) 

Streamlined Energy and Carbon Reporting (SECR) is a mandatory annual requirement designed to encourage more energy efficiency measures within businesses, for both economic and environmental benefits. 

SECR is enforced by the department for Business, Energy, and Industrial Strategy (BEIS) and targets businesses who consume more than 40,000 kWh of energy per year, with two or more of the following: 

  • A turnover (or gross income) of £36m or more 
  • Balance sheet assets of £18m or more 
  • 250 employees or more 

SECR can help support your businesses net zero journey as it can help you raise awareness of how and when energy is used, reduce your energy bills, increase transparency for investors and reduce administrative burdens. In fact, many businesses have started to comply with SECR voluntarily to demonstrate their sustainable commitment and use their disclosures as a launch pad to commence their net zero journey. 

If your business is looking to comply with SECR, see how we can help here. 

Revenue recovery 

Although this solution doesn’t reduce consumption, it can unearth large refunds and ongoing savings which you may be entitled to. 

Business energy bills are complex and it can be both confusing and time consuming to effectively recognise whether your business is being billed correctly. There are several explanations for miscalculated charges and billing errors, from right across the supply chain. Businesses can recover incorrect charges for up to the past six years. Using a consultancy to review your historical billing data means errors can be identified and recovered on your behalf, with the potential to receive a significant refund that had previously been paid incorrectly. 

How can this support your net zero journey? 

If your business is looking to reduce consumption and decarbonise to support the UK’s net zero goals, these schemes, solutions, and obligations are just some of the ways in which your business can unlock funds that would have otherwise been spent on your energy bill. These additional funds can then be reinvested in carbon reduction technologies and more sustainable operations and processes to propel your business even further along on its net zero journey. 

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