UK businesses are missing out on huge economic and environmental cost savings because of inefficient energy use and a lack of awareness, warns a report out today (November 27).
Companies appear unaware of existing services and support which could help them significantly cut energy bills, increase competitiveness and improve worker productivity.
Report authors Carbon Connect and the Westminster Sustainable Business Forum argue that the government must act urgently to help companies access low cost loans, and warns of a widespread lack of understanding of the advantages of increased energy efficiency at senior management level across the UK.
It further warns of the ‘split incentive’ that dissuades commercial landlords from investing in efficiency improvements and proposes measures to both help and clampdown on landlords failing to undertake upgrades.
The report follows a six-month, cross-party inquiry chaired by Conservative MP Oliver Colvile and Labour’s Lord Whitty and makes more than a dozen recommendations for policy change.
Lack of understanding
Lord Whitty said: “This report shows clearly a worrying lack of understanding across the UK commercial sector of both the benefits of improved energy efficiency and the ways in which companies can finance and engage in improvements.
“The government needs to be clearer about all of the non-domestic energy efficiency programmes available to the commercial sector and an energy efficiency ‘hub’ website must be created to guide senior executives through investment in energy efficiency.”
Among its recommendations, the report urges the government to:
- Use the Green Investment Bank to fund a commercial subsidiary of the Green Deal Finance Company, under guarantee from the Treasury, to offer low interest loans to SMEs to stimulate the market for energy efficiency.
- Launch national and ‘street-by-street’ awareness-raising campaigns to communicate more fully the easy availability of Government-backed loans for energy efficiency measures via the non-domestic Green Deal scheme.
- Use local enterprise partnerships (LEPs) to help drive the roll-out of energy efficiency measures among local businesses, by putting clearer guidance and instruction in future LEP funding streams.
- Improve awareness of energy efficiency measures in UK boardrooms by forcing senior company executives to sign off an ESOS assessor’s final report of a company’s energy efficiency performance.
- Compile a comprehensive database of UK commercial buildings based on their energy efficiency, in order to provide a performance benchmark and help foster a culture of awareness and competition.
- Clampdown on commercial landlords failing to meet minimum energy efficiency standards by increasing financial penalties for those failing to produce energy performance certificates and display energy certificates for their buildings.
- Help landlords make improvements by extending to 12 months the length of time a landlord can receive empty property rate relief from local authorities – providing energy efficiency improvements are being made.
Oliver Colvile added: “The need to increase the resilience of our businesses against the threat of climate change, and energy price volatility could not be greater. The obvious cost savings, coupled with improved productivity that can be realised from energy efficiency, makes it quite clear that now is the time to invest on a large scale.
“To do that requires government intervention – to raise awareness, guarantee low-cost loans, stimulate the market and incentivise the landlords. This report lays out clearly how that can be achieved quickly and cost effectively.”
Download the full report here.