ESOS What is the Truth?

When the UK administration introduced its ESOS Energy Savings Opportunity Scheme reactions from business people followed a familiar theme.

  • Do nothing it will go away
  • The next Westminster will drop this
  • Another stealth tax. I don’t have time for this
  • Give the problem to admin and tell them to fix it

ecovaro decided to share three facts with you. These are

(1) ESOS is not a government money spinner

(2) all major political parties support it, and

(3) it is a cost-effective way to put money back in your pocket while feeling better about what business pumps into the environment.

Four More ESOS Facts

1. You Cannot Give the Problem to Admin ? Energy is technical. The lead belongs with your operations staff because they understand how your systems work. Some things are best outsourced though. ecovaro is here to help.

2. ESOS is Not Going to Go Away ? A company inside the regulation net must submit its first report by 6 December 2015. Non-compliance risks the following penalties:

  • ?5,000 for not maintaining adequate records
  • ?50,000 for not completing the assessment
  • ?50,000 for making a false or misleading statement

3. The Employee Count is the Annual Average – The employment criteria (unlike balance sheet and turnover) is the monthly average of full and part-time employees taken across the full financial year. The fact you have <250 employees in December 2015 when the first report is due does not necessarily let you off the hook.

4. The 6 December 2014 Report is No Big Deal ? When you think about it the administration is hardly likely to spend years wading through 9,000 detailed company energy plans. It has no authority to comment in any case. All that is required is for a senior director to confirm reading the document, and a lead assessor to agree it complies with the law.

Does this mean that ESOS is a damp squib? We do not think so, although some firms may take the low road. ecovaro believes the financial benefits will carry the process forward, and that the imperative to make the world a better place will do the rest.

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Energy Savings Opportunity Scheme (ESOS): An Overview

Energy management is crucial to most businesses in the UK. This is primarily because energy usage substantially affects all organizations, whether large or small. The good news is that, energy costs can be controlled through improved energy efficiency. And this is exactly why Energy Savings Opportunity Scheme (ESOS) came into being ? to promote competitiveness among businesses.

Energy Savings Opportunity Scheme is the realisation of the UK Government’s ambition towards achieving the maximum potential of cost-effective energy in the economy. ESOS aims to stimulate innovation and growth, cut emissions and support a sustainable energy system.

ESOS at a Glance – Legal Perspective

The EU Energy Efficiency Directive took a major step forward on November 14, 2012 and headed towards establishing a framework to promote energy efficiency across various economic sectors. To interpret Article 8 of the Directive, the government has given birth to ESOS; requiring large enterprises to undergo mandatory energy audits and energy management systems by December 5, 2015 and at least every 4 years thereafter.

Large enterprises include UK companies that have more than 250 employees or those businesses whose annual turnover exceeds ?50 million and whose statement of financial position totals more than ?43 million. With this, over 7000 of the biggest companies in Britain will need to comply with ESOS as an approach to review their total energy use in buildings, business operations, transport and industrial processes.

Generally, ESOS is both an obligation and an opportunity. It is an obligation for the indicated target companies since they need to submit to additional regimes; focus on audit evidences; act in accordance to group structures and compliance; and observe limited penalties and note retention periods. Moreover, it is also an opportunity for companies to strive for more savings on energy projects; attempt to standardise their potential market; and effectively lower debt and legal costs.

ESOS Audits ? Looking Beyond

According to the Department of Energy and Climate Change (DECC), average first audit costs would be estimated at about ?17,000 and subsequent ones at around ?10,000. As expected, these audits will result in energy saving recommendations, of which companies need not proceed for a follow up; and substantially improve businesses in their energy management issues. DECC further states that every business that complies with ESOS could save an average of ?56,400 each year from an initial investment of ?17,000 only.

Currently, up to 6,000 UK businesses are already subject to existing CRC Carbon Reduction Scheme, Mandatory Carbon Reporting, Climate Change Levy and other compliance. This signifies that ESOS may overlap with prevailing energy efficiency legislation and may put additional pressure on energy administration. While this is true, however, ESOS holds extensive benefits. Although the scheme can be viewed as another costly compliance to environmental standards, ESOS goes straight to the bottom line and provides the organisation with competitive advantage. If large businesses act now and comply with it, they will be able to enjoy maximised payback in the long run.

Indeed, Energy Savings Opportunity Scheme is already here. It is mandatory with minimal investment. And all you have to do is act quickly, implement new improvements and earn more.

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How Westin Melbourne Hotel Trimmed its Footprint

Becoming sustainable is a three-pronged process. You must save money and push the buttons the government is pressing you to. But there?s a deeper, more urgent issue. If your customers mark you down for not being green enough you are heading for trouble. Let’s see how well this hotel is doing.

The Melbourne flagship of the Westin hotel chain boasts 262 spacious rooms with views of Melbourne Square and surrounding theatres, designer boutiques, galleries and national landmarks. The architects included conference facilities, a wellness centre and sundry bars and restaurants. After climate change arrived to stay, hotel management discovered they had inherited a water and energy-greedy monster. Their solution was to measure what was going through their systems, and then progressively cap the building?s greedy appetite.

The Melbourne Westin Hotel could not have achieved results without these metrics. They began by determining key indicators and measuring them. This provided them with criteria to set achievable, cost effective targets in the following key areas of their business:

  1. Water Management ? Demand-based linen and towel recycling, installation of back-washable water filters, water-saving shower heads, dual-flush toilets.
  2. Waste Management ? Conversion to green products, recycling kitchen oil, moving towards a paperless office, recycling everything possible.
  3. Energy Management ? Energy-efficient light bulbs, standby settings for lights, computers, televisions and air conditioners
  4. Stakeholder Communication ? Staff green-team training, guest education, ongoing employee briefings
  5. Strategic Positioning ? Visible, top-down commitment, optimised carbon offsets from clean, renewable energy sources, clearly stated position in the market

Westin?s Melbourne landmark has made good progress towards becoming the green hotel for others to follow. It has adjusted its environmental policies, increased water and energy awareness and implemented tight waste management.

Consumers are already shopping to make their carbon footsteps lighter. Food stores are on the bandwagon although apparel is lagging. Perhaps it’s time you found out just how your company is shaping up. It’s no longer a matter of ?if carbon taxes?. It’s a matter of ?when it does?.

ecoVaro is a software system-in-the-cloud that lets you enter your water and energy consumption and process it online so you can monitor and manage your usage. In no time at all you could be saving money like Westin Melbourne did. Does that sound like something worth investigating?

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Matrix Management: Benefits and Pitfalls

Matrix management brings together managers and employees from different departments to collaborate with each other towards the accomplishment of the organizational goals. As much as it is beneficial, matrix management also has limitations. Hence, companies should understand its benefits and pitfalls before implementing this management technique.

Benefits

The following are some of the advantages of matrix management:

Effective Communication of Information

Because of the hybrid nature of the matrix structure, it enables different departments to closely work together and communicate frequently in order to solve project issues. This leads to a proficient information exchange among leaders and subordinates. Consequently, it results to developed strategies, enhanced performance and quick productivity.

Efficient Use of Resources

Resources can be used efficiently in the organisation since it can be shared among functions and projects. As the communication line is more open, the valuable knowledge and highly skilled resources are easily distributed within the organisation.

Increased Motivation

The matrix structure promotes democracy. And with the employees working on a team, they are motivated to perform their duties better. The opinions and expertise of the employees are brought to the table and considered by the managers before they make decisions. This leads to employee satisfaction, empowerment and improved performance.

Flexibility

Since the employees communicate with each other more frequently, decision making becomes speedy and response is adaptive. They can easily adjust with diverse situations that the company encounters.

Skills Development

Matrix employees are pooled out for work assignments, even to projects that are not necessarily in line with their skill background. With this approach to management, employees have the chance to widen their skills and expertise.

Discipline Retention

One significant advantage of matrix management is that it enables the employees to maintain their skills in functional areas while working with multidisciplinary projects. Once the project is completed and the team wraps up, the members remain sharp in their discipline technically and return to their home functions.

Pitfalls

Here are some disadvantages of matrix management:

Power Struggle

In the matrix structure, there is always tension between the functional and project manager. Although their intent is polite, their conflicting demands and competition for control over the same resources make it more difficult.

Internal Complexity

Having more than one manager, the employees might become confused to who their immediate leader is. The dual authority can lead to internal complexity and possible communication problems. Worst, employee dissatisfaction and high employee turnover.

Heightened Conflict

In any given situation where people and resources are shared across projects, there would always be competition and conflict. When these issues are prolonged, conflicts will heightened and will lead to more internal problems.

Increased Stress

For the employees, being part of a matrix structure can be stressful. Their commitment is divided among the projects and their relationship with multiple managers requires various adjustments. Increased stress can negatively affect their performance in the long run.

Excessive Overhead Expenses

Overhead administrative costs, such as salaries, increase in a matrix structure. More expenses, more burden to the organisation. This is a challenge to matrix management that leaders should consider carefully.

These are just some of the advantages and disadvantages of matrix management. The list could go on, depending on the unique circumstances that organisations have. The key is that when you decide to implement matrix management, you should recognise how to take full advantage of its benefits and understand how to lessen, if not eradicate, the pitfalls of this approach to management.

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