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With company insolvencies reaching a 13-year peak, in the latest Office for National Statistics (ONS) survey, carried out in August 2022, over 20% of businesses said that their main concern was meeting energy prices. In this blog, “Keeping the lights on: why energy management is essential for SMEs”, we look at what action SMEs can take to reduce energy consumption and make energy cost savings.
There’s no getting around it – SMEs have been hit hard by the last few years. With a brutal combination of a struggling post-COVID economy, the sharp rise in the cost of materials, and labour shortages facing businesses across the UK. Add to that the unforeseen and acute energy crisis and it can feel as though the odds are stacked against small and medium sized businesses.
Of the 5.5 million small businesses in the UK, over 1 million are thought to be locked into long-term energy supply contracts, according to the British Chamber of Commerce (BCC) and the Federation of Small Businesses (FSB).
Small manufacturers are understood to be some of the worst affected, due to their high energy use, which is likely to have an impact on their clients – often larger manufacturers – and UK supply chains. The ONS says there were 5,629 insolvencies in the second quarter of 2022 – the most since 2009. This was when the UK was in the midst of the global financial meltdown. And this number could rise following the end of the Government’s Energy Bill Relief Scheme. In its place is the new Energy Bills Discount Scheme. You can check your eligibility on the gov.uk website. The scheme comes just a few months after the ‘It All Adds Up’ campaign which provided similar advice for households.
Awareness of energy efficiency, both in industry and households, could certainly use a boost. The UK has pledged to reduce energy demand by 15% and reach net zero by 2050. But, with no promise of falling energy prices on the near horizon, commentators are predicting that the outlook for smaller businesses may get worse before it gets better.
Of course, the Government has a role to play in supporting businesses with the cost of electricity and gas. But beyond these subsidies and other grants which may be available, business owners can be looking inwardly. By assessing their operations, they can find practical ways to save energy-related costs and keep the wolf from the door.
The Department of Energy & Climate Change’s research suggests that the average SME could reduce energy bills by 18-25% by adopting energy efficiency practices as well as encouraging staff to be more green-minded at work. So, looking around your own business, identify the low hanging fruit in terms of energy cost-cutting. Indeed, these are most likely your heating, lighting and machinery. But where do you start?
ISO 50001 was developed to support businesses in any industry to implement an Energy Management System (EnMS), which will improve energy efficiency and generate cost savings. The framework includes:
With the framework to guide you, it won’t take long to identify areas for improvement. You may worry about the investment required or payback period for replacing, upgrading or retrofitting your business operations or premises. But there is good news! Many energy efficiency improvement measures require no capital expenditure and minimal effort. For example:
Key to your effort is engaging your own staff. The Energy Saving Trust has some useful resources for your employees, including posters, stickers and staff briefings to raise awareness of energy consumption and to build an energy saving culture in your workplace.
For more information on ISO-Cert Online’s services or to discuss your requirements please contact us on 0333 014 7720 or email info@isocertonline.net.
Sources: Energy Saving Trust | The Guardian | Office for National Statistics | gov.uk
Responsibility for the environment is now one of the most significant considerations for consumers and businesses around the world. People judge the impact that businesses have on the environment with greater scrutiny. So the opportunity arises for organisations to boost their brand and reputation and create a sustainable advantage through green practices. By aligning with consumer values and demonstrating a strong commitment to protecting our planet, let ISO 14001 certification give your business a sustainable advantage. After all, businesses which prioritise sustainability are better placed to succeed in the future.
Figures from recent studies appear to confirm this:
Conversely, poor environmental practices can alienate customers. Importantly, the following factors play a role in making consumers turn their backs on a brand:
One way that you can demonstrate your business’ commitment to sustainability is to obtain ISO 14001 certification. In brief, this is awarded to businesses which have implemented an effective environmental management system (EMS). And ISO 14001 certification gives your business a sustainable advantage in several ways:
ISO 14001 certification is recognised around the world as a mark of environmental excellence. By obtaining this certification, you are making a clear statement to your key stakeholders. (For example, your existing and potential customers, suppliers and society in general.) Above all, you are showing that you are committed to sustainability and responsible environmental management.
An effective EMS can help you detect opportunities for improvement. For instance, reducing waste, improving energy efficiency, and optimising how you use resources within your organisation. By implementing these improvements, you can reduce your environmental impact. Additionally, you can reduce costs and make cost savings.
Businesses which operate in highly regulated industries or sectors may need to demonstrate compliance with environmental regulations. Indeed, ISO 14001 certification provides a comprehensive framework for compliance, helping businesses to avoid penalties and legal risks.
Environmental risks, such as pollution, climate change, and resource depletion can pose a significant threat to businesses. Here, ISO 14001 certification can help you identify and mitigate these risks. In fact, it can help you to reduce the likelihood of disruptions to your operations and supply chain. In turn, this will keep your customers satisfied.
In obtaining ISO 14001 certification, your business will stand out from your competitors that have not made the same commitment to sustainability. Of course, this can give you a competitive advantage in your marketplace, attracting environmentally conscious customers.
Some businesses struggle to communicate their green credentials. Typically, for fear of people accusing them of greenwashing. However, with ISO certification under your belt and an effective EMS in place, you only need to look to how your business operates to find things which will appeal to environmentally conscious consumers. As a starting point:
Make sure that your brand messaging reflects your commitment to sustainability. Create a brand promise with sustainability at its core. It will reassure consumers that reducing your environmental impact is at the heart of how you deliver your products/services.
Across the world, packaging is a huge source of waste. And consumers are increasingly concerned and frustrated about its environmental impact. Have you considered using eco-friendly packaging materials? For instance, recycled materials, biodegradable alternatives or even simply reducing the amount of packaging you use. After all, your packaging is a tangible element of your brand. So, you can show consumers that you are committed to playing your role in protecting the planet through responsible environmental management.
Share your successes! Let people know about any activities or schemes you’re involved in which contribute to improving the environment. Moreover, use social media, your website, email newsletters, advertising and other channels to communicate your sustainability initiatives. For example, reducing carbon emissions, conserving water, or supporting environmental causes.
Teaming up with carefully-chosen organisations which are focused on environmental issues can help you demonstrate your commitment to sustainability. And boost your brand reputation. So, consider allying yourself with local or national non-profit organisations that focus on environmental causes. Or work with suppliers that have strong sustainability initiatives.
Finally, an EMS provides a framework for continuous improvement. It helps you identify areas where you can reduce your environmental impact and implement solutions to address these areas. So, achieving ISO 14001 certification is just the start of an exciting journey of you becoming increasingly environmentally friendly. Let ISO 14001 certification give your business a sustainable advantage today!
“It seems that almost every day there’s a new story about how companies have fallen foul of their environmental duties. As an environmentalist, I am particularly passionate about ISO 14001 and its value in supporting businesses to implement and maintain an Environmental Management System so that they can operate as sustainably as possible. And, based on consumer trends, ultimately being a responsible business is good for business too.”
Steve Weaver, Director of ISO-Cert Online Ltd
For more information on ISO-Cert Online’s services or to discuss your requirements please contact us on 0333 014 7720 or email info@isocertonline.net.
Sources: The Roundup | Google | McKinsey | GWI | Facilities Management UK
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