The business case for a genuinely green energy supply

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The business case for a genuinely green energy supply

The lights on in a modern office

Climate is moving up the priority list for UK businesses. Whereas once an emissions reduction strategy was an optional extra to prove your green credentials, it is now becoming standard. The proposed introduction of mandatory TCFD reporting will, as our blogpost explains, “embed climate change into the organisational culture of companies”. Regulatory compliance is driving some of the change, but a bigger driver is that stakeholders such as investors, customers and partner businesses are increasingly demanding action on the climate crisis. Yet many businesses are still unaware that climate concerns should be a factor in their choice of energy supplier, and it may fall to you as their energy consultant to explain this. Here are three reasons why the business case to switch to a genuinely green energy supply is so strong.

Reporting requirements

Thousands of large UK businesses have to comply with the Streamlined Energy and Carbon Reporting (SECR) scheme, which requires them to report on their energy use and carbon emissions. SECR makes it compulsory to report on your Scope 1 (direct) emissions and their Scope 2 emissions (those from purchased energy). A company’s choice of supplier will have a huge impact on what they report under Scope 2. If they simply choose the cheapest possible tariff, their energy bills will translate directly into greenhouse gas emissions, which could be hefty if they are a heavy energy user. But if they choose a genuinely green supplier, they can legitimately list their Scope 2 emissions as zero in their SECR reporting.

When SECR replaced the old Carbon Reduction Commitment scheme two years ago, the number of businesses in scope increased from 4,000 to over 11,000, and this widening of scope should continue in future. Currently, SECR only covers listed companies, large unlisted companies and large limited liability partnerships, but smaller businesses should be prepared for the possibility of having to meet some kind of carbon reporting requirement in the future.

The Energy Savings Opportunity Scheme is another one to watch. While this has historically focused on achieving cost savings through efficiency measures, a new consultation proposes making it more focused on emissions reduction. Even if there is no regulatory requirement for your business to actually cut emissions, decarbonising your energy supply is an easy way to simplify your Scope 2 reporting under any scheme.