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Green is the money

Flooring, by virtue of involving a manufacturing process, is a consumptive industry. Whether it’s raw materials in the form of chemicals or wood, utilities such as power and water, or fuel used to transport goods, flooring needs to consider its position and take a stand, says Adam.

WHILE some decry the concept of climate change, the reality – no matter what is happening – is that there is but one Earth and we have a duty to protect it as best as we can. There is, very simply, no Plan B.

Flooring, by virtue of involving a manufacturing process, is a consumptive industry. Whether it’s raw materials in the form of chemicals or wood, utilities such as power and water, or fuel used to transport goods, flooring needs to consider its position and take a stand.

Reducing waste
From raw material through to disposal, products have an environmental impact over their life cycle. Chemicals require care, landfill carries cost, and the harmful effects of waste plastic are only now being understood.

While it’s obvious, reducing waste is a sure fire and effective way to increase profit. And one of the best techniques a firm can deploy to pursue this goal is to engage all employees in improvements; waste is not mostly caused by wilful carelessness, but instead, by ignorance and inadequate administrative and production procedures. One solution is to make sure that everyone knows the impact of waste and the financial strength of the business – all while seeking employee input for areas to target.

Laura Timlin, director at the Carbon Trust, knows that every business is affected by climate change through revised regulation, energy cost changes, supply chain effects and new customer preferences. She says: ‘Businesses should benefit as a result of decarbonising… making simple changes could reduce a business’s energy costs by 5%-10%.’

She emphasises that changes made should not be ‘one-off, but rather, part of a comprehensive plan.’ She adds that ‘it is vital that companies communicate their environmental management plan to employees at every stage, as effective environmental management relies on everyone playing their part.’

A function of this is an environmental policy that is pushed by senior management to underline its importance. At the same time, reduction targets should be set to motivate employees to think about where resources are consumed and how reductions can be made. As Timlin explains, ‘simple communication or labels on energy-using technologies helps to guide employees on actions they can take to save energy while clear guidance helps to improve recycling rates.’

But it’s the simplest of measures that are so effective. Here Timlin calls for ‘sustainability walk-arounds’ to help identify wasted resources – lights left on in meeting rooms, spaces or toilets that aren’t in use; photocopiers, monitors and printers left on standby when not in use; and doors and windows left open during colder weather.

There are a number of technologies that can help and Stuart Pearce, managing director of SMARTech energy, is aware of them all. They include LED lighting, power quality improvement, power factor correction and voltage optimisation, energy efficient heating and cooling, as well as renewables like solar PV, ground source heat pumps and combined cooling heat and power.

As he tells, ‘some of these technologies are low-cost to supply and install with low to medium payback periods. In contrast, renewable energy technologies like solar PV should be considered long-term due to their long payback periods and high initial capital outlay.’

Naturally, some might be tempted with new equipment. Pearce recognises that this ‘can provide improvement in energy savings due to more efficient parts.’

However, he warns that ‘the investment in new equipment should be evaluated against the payback period because this capital can instead be used to reduce carbon footprint by installing in other technologies with quicker payback periods.’

It’s of interest that earlier this year (2020), the Carbon Trust published the results of a survey of 564 SMEs which asked about attitudes toward sustainability and actions they’ve taken to reduce their energy consumption.

More than 80% had taken action to increase their energy efficiency and 51% said they want to do more. What was fascinating to Timlin was that ‘more than 60% were very or fairly concerned about their energy spend – up from 46% when we conducted a similar survey of SMEs in 2016.’

Carbon emissions
The government, being in a position of overarching power, has the ability to drive change. Global warming is said to be a function of increased carbon dioxide in the atmosphere. One incentive to improve environmental performance in terms of carbon emissions are Climate Change Agreements (CCAs).

These agreements allow sites to claim significant discounts off the Climate Change Levy that appears on their energy bills. In return for this discount a site is required to meet energy efficiency targets, for which it is measured every two years. It’s notable that the current scheme has been extended to 2025.

Back to the present, its logical minds are focused on the pandemic, but environmental concerns are featuring much more prominently in the minds of the industry’s customers, particularly those high-profile customers, who will not only demand to know the carbon footprint of a job, but who will expect that impact to have been offset.

There is another element of regulation to consider – the relatively recently launched Streamlined Energy and Carbon Reporting. It requires large unquoted companies to prepare and file energy and carbon information in their director’s report in their financial years starting on or after 1st April 2019. This process means a company will need to convert its energy use into carbon emissions.

Other financial incentives
With the government being in the driving seat it’s sensible to ask what help there is for firms to go green? The response is that there really isn’t a lot out there at the moment. The April 2020 consultation document on the future of CCAs after 2025 asked industry what sort of projects they would like to see, but government emphasis seemed to be on ‘energy-intensive sectors’, under which category the flooring doesn’t qualify.

Worse, the government ended Enhanced Capital Allowances in April 2020, other than in Enterprise Zones, in favour of an Industrial Energy Transformation Fund which does not include flooring.

Beyond that, the Carbon Trust points to the government’s Energy Technology List which details energy efficient plant and machinery (manufacturer details along with product references) that firms could consider acquiring.

There are some Carbon Trust loans, but they are only available to SMEs in certain parts of the UK. SMEs in Wales can apply for an interest-free loan of between £3,000 and £200,000 with the Carbon Trust through the Energy Efficiency Loan Fund where they are replacing existing equipment that will result in energy savings. The same applies to SME’s in Scotland with an interest-free loan, from £1,000 up to £100,000 through Zero Waste Scotland.

The trust offers more information on financing energy efficiency projects. It also has a number of online tools to help firms assess their position – SME Energy Benchmark Tool, SME Carbon Footprint Calculator and a Lighting Business Case Tool.

But despite the trust’s activity firms looking for financial support for environmental improvements might actually be best off contacting their local authorities to see what incentives they may have on offer, but with Brexit impacting on European funding this is likely to be limited.

But there is an alternative – one that’s found in the world of software – where energy technologies are seen as a service rather than as a tangible purchase, and it’s something that SMARTech energy is involved in. Termed Energy Efficiency as a Service, or EEaaS, instead of purchasing energy saving technologies, firms can implement projects without capital expenditure, finance leasing or risk. Effectively, SMARTech uses a diverse portfolio of more than 33 energy saving solutions and seeks to identify areas where energy efficient technologies can reduce consumption (that are guaranteed to be between 20%-50%) and invests in the technology, materials, installation and maintenance – all while monitoring performance to validate the claimed energy savings.

The payback for SMARTech energy is a share of verified cost savings over the length of the contract; with a typical 1/3 split between the client and SMARTech energy.

Pearce says EEaaS is suitable for all firms ‘but the size and scale of the energy conservation measure dictates the viability of an EEaaS undertaking.’ This is because the process of measuring, quantifying and validating savings can be expensive for small energy saving situations.

Even so, some should benefit from EEaaS he claims. He cites the benefits that have accrued to one distributor, albeit in the food sector. It is forecast to spend around £1.95m over a seven-year period, but with energy savings through deploying EEaas expected at more than £490,000 – and with carbon savings of more than 900 tonnes. As Pearce comments, ‘SMARTech energy’s EEaaS offering has effectively enabled our client to increase overall profits on their bottom line – without the need to increase sales.’

And in another example, Clamason Industries, a manufacturer of precision pressings and stampings, was using around 3 million kWh in electricity and gas per year. Following an energy audit SMARTech energy claims that it could save the company around 53 percent on electricity and 5 percent on gas – all through the installation of various energy efficiency technologies.

As Pearce notes, ‘if these savings had been identified and implemented five years ago, the site would have avoided a bill of more than £500k in utility charges.’

Other options
We all know that low- or no-cost measures can be implemented at home to achieve significant reductions on energy bills. But Timlin says the same applies to businesses who should check their bills and usage. ‘By analysing energy consumption,’ says Timlin, ‘companies can identify where energy wastage can be minimised and can improve their overall decision making on energy usage.’

A smart meter is central to this as it can provide vital information on what is consuming the most energy. Allied to this, Timlin says ‘switching to a green tariff is a simple step that organisations can take to reduce their impact quickly.’

On vehicles, firms with their own fleet can make savings through driver training programmes, route planning and switching to electric vehicles. The Carbon Trust has a guide on its website to help businesses invest in low carbon transport.

In relation to this, Pearce details two technologies specifically designed to improve the fuel efficiency of vehicles that his firm is involved in, namely SMARTdrive and Hydrogen Retrofitting: ‘Both of these technologies,’ he says, ‘are quick to retrofit and do not cause excessive downtime on the fleet. They can deliver more than 80% reduction in NOx and fuel savings of 10-20%.’

Another option is to identify those suppliers that have the largest impact and those with which it has the most influence. The solution may come through tighter tenders and contracts or via new processes and logistics and by emphasising to clients that slower could be greener.

An adjunct to this, from Pearce’s perspective, ‘is to only source materials from suppliers who guarantee a certain level of sustainable operations. This includes the use of vegetable-based eco-solvent inks.’ Made from soybeans, they don’t produce volatile organic compounds and are easier to recycle. And then there’s the elephant in the room, paper recycling.

It should be very obvious that making a move to environmental friendliness is not only good for the planet, it’s also good for business. And as the march to environmental awareness hastens, firms that don’t join the movement will be left behind or will fail.

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