Reducing emissions and energy consumption are key components of any net zero plan, which will help you find value and drive efficiency as energy prices rise.
We recently hosted a webinar that looked at ways to help you build a more resilient energy strategy, maintain access to funding and subsidies, and support reporting and compliance commitments.
Turning these measures into practical actions takes time and the right advice. Our experienced, expert speakers combined their market understanding with technical skills to suggest key steps for achieving a cost-effective energy strategy while maximising the impact.
Energy strategy that drives efficiency
Ten practical actions for a cost-effective energy strategy
1 Turn the focus on energy prices into a positive
While making significant investments may seem like an unneeded additional financial ask in difficult times, the evergreen benefits will pay back quicker than before, regardless of future changes to the market. Finding out what investments your business can make now will reduce the dependency on prices and increase the focus on paybacks.
2 Align to government policy where you can
There is government support available even in tight financial times. Fuel switching, heat networks, and CCUS (carbon capture, utilisation and storage) are all examples of government support. Aligning your work to government policy is a step in the right direction to help you reduce costs. We’re seeing a trend for greater regional devolution of powers over the next year – if your region is active it would be worthwhile ensuring you are plugged into this fresh approach at local decision-making.
3 Leverage your supply chain
There’s power in people. Working together with parties in your supply chain can improve transparency and resilience to future price rises and help a business assess its changes.
Work we are doing with our clients across scope 3 emissions baseline helps in identifying cost-saving opportunities across the supply chain, this can only be done through the collection and analysis of products and services-based data.
4 Implement energy-efficient practices
Upgrading to energy-efficient technologies is a great way to reduce energy consumption, costs and related emissions. Examples of this can be energy-efficient lighting, thermal systems - and larger CAPEX-intensive projects which include cooling and heating - and replacing ageing high-carbon-intensive assets. With renewable energy, sources will need funding thus access to preferential borrow rates and government incentives can support a business to achieve an asset-based net zero carbon reduction strategy. A starting point for any business should be through understanding its energy consumption.
5 Administer energy management systems
Implementing an energy management system that tracks energy usage, identifies areas of waste, and sets targets for reduction, can help you monitor and control energy consumption, leading to cost savings.
6 Horizon scan
Undertaking horizon scanning can help you identify relevant reporting regulations that may affect you in the future. Having more information available to capture means you can accurately base your business reports.
7 Engage early with your customers
Your customers may be subject to different sustainability reporting obligations to you in the future, and it's likely they will need information from you to enable them to comply. Engage with your customers early to identify what they will need from you going forwards to future-proof your sustainability reporting and data capture.
8 Communicate your energy strategy to your finance providers
Lenders are under pressure to report their 'scope 3' emissions – which includes those emissions produced by their borrowers. Being aware that the emphasis on scope 3 emissions could directly affect your ability to borrow cost-effectively is key for accessing finance.
A borrower’s emission profile will become as relevant as their credit risk in determining who to lend to, and on what terms. Developing a strategy around reducing carbon emissions, and communicating that successfully, will give lenders confidence.
9 Consider sustainability-linked loans to fully embed energy strategy
Our Grant Thornton survey showed that 93% of lenders expect ESG-related lending to the mid-market to increase in the next few years.
Lenders are keen to explore ESG-related lending, ie, sustainability-linked loans where the terms of the loan tracking specified sustainability-based KPIs. Embedding your firm's ESG strategy into your financing can enable firms to access ESG-related loans as well as pricing discounts for ESG performance.
10 Optimise engagement
Engagement is crucial for changing strategy. Engage with your broad employee base as well as the key stakeholders across the business to build awareness of required changes for a strong delivery of strategy.
Ready to take the next step in your ESG journey?
Take the ESG Maturity Index to see how your perceived ESG maturity compares with the relevant businesses in our 800-strong sample.
It will take about 30 minutes to complete. You'll receive a report based on your answers, a maturity score and a visual comparison of how other business leaders rate their own ESG maturity. The benchmarking is available by job profile, industry and size.