Sadly the Environment seems to be increasingly one of Westminster’s favoured battlegrounds. A place where the Treasury can show who really is boss while the Department for Energy and Climate Change (led by a Lib-Dem) attempts to grapple with some of the most challenging issues facing our country today.
I say grapple but I could also (again sadly) say fumble or stumble as there has been an alarming amount of dilly dallying at times on the timing and structure of key environmental policies – but that’s the theme for another post. The key point here is that despite all of this political posturing, the green agenda is not going away and nor can it.
We’ve all heard the view that now we are going through the economic wringer, any thoughts of doing something good for the planet have to take a back seat. That is a view fostered in the main by never-knowingly-under-lunched City types who much prefer to assess business on the levers they best understand and to avoid harder to assess, in number terms, contributory factors like social and environmental responsibility. I think they are missing the point and not just because we all need to ‘save the planet’. (A euphemism for ‘save ourselves’, by the way.)
Environmental issues need to be put into a stronger business context because they are just as relevant to many businesses’ balance sheets as the cost of raw materials, payroll or competitive pricing. That might seem a bit of a stretch but this is really not the warped view of the strident environmentalist lobby. Managing energy use in business today is about making your business more competitive.
A number of factors are at work. Here are three of them:
- Firstly, the simple cost of energy. Despite some recent decreases, the general trend is for a steady and inextricable increase in energy costs – to heat the factory, power the machine tools, light the call centre, turn the turbine.
- Then there is an increasing trend towards supply-chain compliance. If you make sandwiches (or trucks for that matter) for a supermarket, the chances are that they will be placing increasingly punitive penalties in place if you don’t cut their environmental mustard. Or they may just choose to work with someone else. While that is a factor already with some clear precedents in the Food & Drink sector, we are seeing signs of other markets adopting this strategy – manufacturing, aviation, entertainment and leisure.
- Also, while there is a lot of carrot in the Government’s approach to encouraging consumers to be more efficient in their energy use, it’s the big stick that is being used increasingly with businesses. The Carbon Reduction Commitment (CRC) is already causing disquiet among the UK’s largest businesses – it’s effectively designed to place an energy tax on the country’s biggest energy users. My colleagues and I believe that this approach will begin to filter down towards SMEs before too long. The basic message being, “if you haven’t got your energy act together then the Government are going to strongly ‘encourage’ you to do so …”
What many businesses are missing is the will to do something about all this. To date, unless you are a power user of energy there has been little compulsion to do anything. It’s simply not been that important. My view is that those businesses, no matter how small, who grasp the concept that good energy management can be good for business, will improve their competiveness and their bottom lines. So green can be made into gold.