As business becomes more sensitive to the cost of energy and the effects of climate change become ever-more apparent, the need to take steps to become energy efficient and reduce carbon emissions has never been greater. Business alone contributes almost half of the UK’s total carbon emissions and spends £6bn on energy alone.

But it’s not just the large and most energy-intensive companies that need to cut back on their energy spend to help curb the impact of carbon emissions on our environment. In fact, companies with fewer than 250 employees account for nearly half of annual carbon emissions from business.

Reducing carbon emissions also makes business sense. Businesses are very sensitive to the costs associated with energy consumption. Reducing energy use can save up to 20% on energy bills. Such initiatives can also boost a company’s reputation among customers, suppliers and potential employees. Research has shown that, as consumers become more aware of the issue of climate change, organisations which fail to make efforts to tackle this problem run the risk of losing customers.

A recent survey by the Carbon Trust also found that more than three-quarters of employees consider it important to work for a company that has an active policy of reducing its carbon emissions. The reality was that less than a fifth worked for organisations that actively ran programmes to help employees become more energy efficient. These findings clearly demonstrate that employees want to make a difference in their organisations but they lack the guidance from management on how to tackle the issue of energy efficiency effectively.

However, the good news is that businesses can quickly cut their energy bills by engaging staff and implementing a number of straightforward low or no cost energy measures. For example, most office equipment has energy-saving features and enabling these options can significantly reduce energy consumption. Heating and lighting are also areas in which significant energy savings can easily be made. Although heating can account for up to 60% of a non-air conditioned office’s total energy costs, reducing the temperature by just one degree can cut an organisation’s annual energy bill by up to 10%.

A further 10% reduction can be achieved by implementing energy-efficient measures that require some initial investment. Experience gained through working with thousands of small companies shows that the payback time for upfront spend can be as little as two or three years and that any future savings go straight to a firm’s bottom line.

Awareness programmes that engage and involve employees in making decisions, implementing measures and communicating the results are also likely to produce great gains. Energy management at work is largely about developing good habits and communicating the benefits to everyone in the organisation. By seeing the impact of the steps that are being taken, employees are more likely to maintain energy-efficient practices long after awareness programmes have finished.

There is also financial support available for businesses looking to reduce the amount of energy they use. For example, the Carbon Trust also runs an interest-free energy-efficiency loans scheme specifically designed for small firms. These loans can help businesses save money by helping them to replace existing equipment with more energy-efficient versions. Businesses can be awarded a loan of between £5,000 and £100,000 to fund the entire or part purchase of equipment such as lighting, boilers or insulation. To be eligible companies must be able to save at least £1,000 per year of their energy use and show demonstrable carbon savings.

The following case studies illustrate how three companies have benefited from adopting more energy-efficient work practices:

Beverley Veneers
Based in Beverley in East Yorkshire, Beverley Veneers is a manufacturing firm that specialises in the production of veneered sets used to make coffins. The company was incurring large energy bills owing to two inefficient air extractor systems that were used to remove and collect airborne dust.

The Carbon Trust recommended installing a wood-waste burner fuelled by excess sawdust, which would also produce hot air that could be used to heat the main building. The majority of the £111,000 cost of the project was covered by an interest free Carbon Trust loan of £100,000. Beverley Veneers will reduce its energy expenditure by approximately £40,000 per year, while also cutting its carbon emissions by more than 59,000kg a year.

“Installing the new wood-burner has enabled us to significantly reduce our energy bills, even in the light of rising prices,” claims Philip Shepherd, director of Beverley Veneers.

Oxford Plastic Systems
Oxford Plastics Systems has been manufacturing plastic mouldings for the construction and traffic safety industries for over 20 years. The company employs 85 people and is located in North Oxfordshire, near Chipping Norton. One of its main products is the feet used for temporary construction fencing (fence feet).

To produce fence feet the company used a moulding process, which involved extruding recycled plastic into a tray mould and pressing it into shape. The overspill was manually trimmed and the waste material granulated to be re-used. However, this waste accounted for 15% of extruded material.

Oxford Plastics Systems applied for an energy-efficiency loan from the Carbon Trust to buy new plastic moulding machines for its fence feet manufacturing process. The company was offered an interest-free loan of £50,000 to purchase and install three new machines, which eliminated the need to trim the fence feet manually.

“The loan enabled us to introduce three new production lines that have the same output as our five previous extruders, generating energy cost savings of about £27,000 per annum,” says David McGee, operations director at Oxford Plastics Systems.

SWJ Group
Based in Gloucester, the SWJ Group manufactures furniture for courtrooms, hotels and even parliament buildings. Occupying a site of over 4,000 square metres and employing 75 employees, the SWJ Group has a turnover of £3m and energy bills of over £25,000 a year.

The Carbon Trust identified a key area where the SWJ Group could cut energy expenditure and save significant costs. SWJ had been saving energy by powering its heating system with a wood-waste burner but this had reached the end of its shelf life and SWJ was planning to revert to fossil fuels.

However, an interest-free loan from the Carbon Trust allowed the company to purchase a new wood-waste burner that would save over £10,000 in energy bills a year. Though the new system cost over £50,000, the Carbon Trust’s interest-free loan means that the company will be able to pay it back in five years through the money saved in energy bills.

“Initially, we hadn’t budgeted for the cost of replacing the wood-waste burner,” says Jeremy Keck, chairman of the SWJ Group. “Without the loan, the cost of this would have certainly meant greater losses on the annual profit.”

Hugh Jones is a manager at the Carbon Trust

Small businesses interested in reducing their energy use and spend should visit the Carbon Trust website on www.carbontrust.co.uk/energy or call the free helpline on 0800 085 2005