Climate change set to impact all business large and small

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Action required now

Whether you believe Trump or Thunberg over climate change it is clear that all businesses are already seeing the impact of climate change. In some parts of the world it is through extreme weather or bush fires as in Australia. The UK government has implemented numerous directives from the EU aimed at reducing greenhouse gas (GHG) emissions. Companies are paying a Climate Change Levy (CCL) and Minimum Energy Efficiency Standards (MEES) are being imposed on rented properties. In 2019 large companies were required to comply with the Energy Saving Opportunities Scheme (ESOS) and report to the Environment Agency. From April 2019 large companies will be required to comply with the Streamline Energy and Carbon Reporting (SECR) by including in their annual report details of their total energy consumption and GHG emissions. The UK government has set a target to achieve Net Zero Carbon by 2050.

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All businesses will come under increasing pressure from customers, investors and governments to protect the environment by reducing GHG emissions. The key to achieving Net Zero Carbon by 2050 will be the decarbonisation of electricity generation. The UK appears to be on course to achieve this which will have profound effect on how businesses use energy. For example the phasing out of boilers in favour of electric heat pumps for both heating and cooling. Improved battery technology is seeing the introduction of electric vehicles for some applications.

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Climate change as an opportunity

By regarding climate change as an opportunity rather than a problem, many businesses will be able to reduce their energy costs while greatly reducing their GHG emissions through introducing new technologies. We recommend companies start by carrying out an energy audit of all energy uses to find out how much energy they are using and produce a profile to show where it is used similar to that required for ESOS. From this energy saving opportunities can be drawn up and ranked according any criteria the company wishes to apply. An investment plan should then be drawn up bearing in mind the likely increase in carbon taxes long before the 2050 deadline for Net Zero Carbon set by the UK government. By carrying out an energy audit now company directors will have the information they need to assess the risk climate change poses to their business and plan accordingly.

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