Consistent reports and detrimental weather abnormalities have shown that the world is not becoming energy-efficient quickly enough. Throughout COP26, we also heard that the world’s wealthiest countries are responsible for creating the highest levels of emissions. The latest IPCC report says that, globally, the richest 10 percent of households are responsible for between a third to nearly half, of all greenhouse gas emissions. In contrast, the poorest 50 percent of households contribute to just 15 percent of emissions.

So, it is up to the richest countries not only to cut their emissions, but to also help poorer countries. These poorer countries make little to no levels of emissions, and yet they experience some of the worst effects of climate change.

It is likely that if your company fell within the scope of ESOS for previous phases of compliance, then you will also qualify for phase 3. However, if you qualified for phase 2 but no longer qualify for phase 3, then ensure you have checked two years’ of financial accounts. We would suggest you notify the Environment Agency of the change.

ESOS is mandatory under phase 3 for large UK companies that meet one or more of the following criteria:

• Employ at least 250 people.
• An annual turnover in excess of £44 million and an annual balance sheet in excess of £38 million.
• Part of a corporate group containing a UK company that meets the above criteria.

Businesses that qualify must carry out certain obligations within the timeline of phase 3. You will need to measure your total energy consumption and identify areas of significant energy use.

Qualifying businesses are advised to start the process as soon as possible, as we are now over half way through Phase 3 and enforcements are issued for late compliance.

But these climate-related risks can bring opportunities for businesses, that come from both safeguarding against them and accurately reporting them. These benefits include:

• Resource efficiency – Using the Earth’s resources in a sustainable way can go beyond environmentalism and bring financial rewards for your business. Smart metering, monitoring and building controls, and intelligent energy management can help businesses to make significant long-term savings on their utility bills.
• Clean energy – Harnessing clean energy sources, through green procurement or onsite generation, brings reputational benefits as well as financial advantages. As installations become less expensive, they will only become more sought after.
• Sustainable products and services – Developing low-emission goods, services and/or innovative climate-related products can be beneficial for businesses in many ways. As the climate crisis worsens, demand for low-carbon goods and services will surge.
• Credibility – Financial firms are turning their focus towards climate-related risks, and putting more faith in organisations that plan ahead. Implementing TCFD guidelines helps to maintain credibility and safeguard your organisation’s reputation, with both investors and the public.
• Focused strategy – Implementing TCFD recommendations will help companies to identify and assess climate change risks. They can then address their structural weaknesses and implement mitigation and adaptation efforts to future-proof their business. Organisations that do this will have a competitive advantage over those that fall behind the times.
• Resiliency – All of these benefits culminate in this last, most important one: resiliency. Every company is vulnerable during a time of economic recovery, and a genuinely sustainable strategy is key to survival. Boosting financial and reputational stability, and allowing access to new markets and assets through the implementation of TCFDs can help a business to thrive.

A requirement of SECR is to publish a statement about your energy efficiency actions. This is a public disclosure and so each business must keep in mind their corporate social responsibility (CSR) credentials. Every business is unique, meaning that each one requires a specific set of energy management solutions.

When choosing energy saving solutions, businesses should keep in mind their broader business goals. Some solutions can be costly. And while the eventual benefits will be significant, it can be intimidating for businesses with smaller budgets. For these businesses, try to work with what you have and progress with smaller projects to start with.

Through complacency, businesses could risk abandoning their CSR and green credentials. In turn, risking potential clients as societal expectations around sustainability continue to grow.