Updated: 5th June 2015
New research by BTG Green, part of the Begbies Traynor Group, indicates that nearly 16,000 (15,952) UK businesses could face fines of up to £50,000 and risk being publicly named and shamed if they fail to comply with a new mandatory EU energy directive before 29 January 2016.
The Environmental Agency’s new Energy Savings Opportunity Scheme (ESOS) was formally unveiled last summer as the UK government's response to new EU Energy Efficiency Directives, calling on companies to identify and improve their energy efficiency.
The mandatory scheme requires UK enterprises with over 250 employees or an annual turnover in excess of 50 million Euro (Approximately £38,938,000) and an annual balance sheet total in excess of 43 million Euro (Approximately £33,487,000) to ensure a qualified ESOS Lead Assessor measures or audits their energy consumption across all areas of their business, including buildings, transport and industrial activities, in order to identify cost-effective energy savings.
This formal ESOS Assessment must then be submitted to the Environment Agency ahead of the official deadline on 5th December 2015; failure to do so could result in a fine of up to £50,000 and the potential for further civil penalties and reputational damage through the publication of details surrounding individual companies’ non-compliance.
However, according to BTG Green, with less than seven months to go until the submission deadline, many UK companies have yet to start the time-consuming audit process, unaware of the significant compliance and administrative burden that the ESOS Assessment can impose on their operations and staff. More concerning still, due to limited marketing activity from the Environmental Agency at the time of launch, a significant proportion of the 16,000 companies due to be affected by ESOS are reportedly unaware that the scheme even exists.
Julie Palmer, Partner at BTG Green, said:
“Since the scheme was quietly launched last summer, awareness of the ESOS requirements remains worryingly low, with nearly 16,000 of the affected companies either unaware that they need to take part or dragging their feet. The ESOS energy audit itself will be a major compliance and administrative burden, particularly for companies working across multiple sites and regions, so with just seven months to complete it, companies need to make this an urgent priority or risk significant financial and reputational repercussions if they miss the upcoming deadline.
“This new EU-backed scheme is not to be trifled with as the Environment Agency is trying a new ‘get mean to get green’ tactic and plans to vigorously crack down hard on any companies that try to slip through the net - feigning ignorance won’t save anyone from significant fines when 29th January comes around.”
According to BTG Green, while ESOS is a mandatory scheme, it should not be dismissed as just another carbon tax but rather an opportunity for tangible financial savings.
Julie Palmer added:
“Despite the short term costs, the prospective benefits of ESOS far outweigh the potential negatives. We estimate that a £5K audit could identify savings worth £120,000, while a £50K audit could identify savings worth £1.2m. Indeed DECC has estimated that, if ESOS participants implement the energy efficiencies identified in their assessment, the UK economy could benefit by as much as £2.8bn per year.”
BTG Green has its own dedicated website that can be found at www.esoshelp.com
For further details you can contact their dedicated telephone line on 0800 063 9257
Julie is a law graduate who qualified with Price Waterhouse in 1994. Julie joined Smith & Williamson in 1997 and became a partner in 2001. With Mike Stevenson, Julie set up Middleton Partners offices in Salisbury and Southampton, both of which are now part of Begbies Traynor.
Julie is a member of the Insolvency Practitioners Association and is a Fellow of The Association of Business Recovery Professionals. Julie deals with all aspects of Corporate Recovery and turnaround work and takes all form of personal insolvency appointments.