Urgent government action needed to improve energy efficiency in commercial buildings

Published:  04 December, 2013

Government must act urgently to help UK businesses improve the energy efficiency of their buildings to avoid missing significant economic and environmental opportunities, a new report has warned.

The report, published jointly by the Westminster Sustainable Business Forum and Carbon Connect last week, argues that benefits such as reduced energy bills, increased competitiveness and improved worker productivity are being missed by UK companies.

The report calls on the Coalition to do more to help companies access low-cost loans, and warns of a widespread lack of understanding of the advantages of increased energy efficiency at senior management level. It further warns of the ‘split incentive’ that dissuades commercial landlords from investing in efficiency improvements and proposes measures to both help and clamp down on landlords failing to undertake upgrades.

The report follows a six-month, cross-party inquiry chaired by Conservative MP Oliver Colvile and Labour’s Lord Whitty. It calls on government to:

  • Use the Green Investment Bank to fund a commercial subsidiary of The Green Deal Finance Company, under guarantee from HM Treasury, to offer low-interest loans to SMEs to stimulate the market for energy efficiency
  • Launch national and ‘street-by-street’ awareness-raising campaigns to communicate the easy availability of government-backed loans for energy-efficiency measures via the non-domestic Green Deal scheme
  • Use Local Enterprise Partnerships (LEPs) to help drive rollout of energy-efficiency measures amongst local businesses, by putting clearer guidance and instruction in future LEP funding streams
  • Improve awareness of energy-efficiency measures in UK boardrooms by forcing senior company executives to sign off the ESOS Assessor’s final report of a company’s energy-efficiency performance
  • Compile a comprehensive database of UK commercial buildings based on their energy efficiency, in order to provide a performance benchmark and help foster a culture of awareness and competition
  • Clamp down on commercial landlords failing to meet minimum energy-efficiency standards by increasing financial penalties for those failing to produce Energy Performance Certificates and Display Energy Certificates for their buildings
  • Help landlords make improvements by extending the length of time a landlord can receive empty property rate relief from local authorities to 12 months – providing energy-efficiency improvements are being made.

Prior to the report’s publication, Mr Colvile said: “The need to increase the resilience of our businesses against the threat of climate change and energy price volatility could not be greater. The obvious cost savings, coupled with improved productivity that can be realised from energy efficiency, makes it quite clear that now is the time to invest on a large scale.

“To do that requires government intervention – to raise awareness, guarantee low-cost loans, stimulate the market and incentivise the landlords. This report lays out clearly how that can be achieved quickly and cost effectively.”

Fellow inquiry co-chair Mr Whitty added: “This report shows a worrying lack of understanding across the UK commercial sector of both the benefits of improved energy efficiency and the ways in which companies can finance and engage in improvements. The government needs to be clearer about all of the non-domestic energy-efficiency programmes available to the commercial sector, and an energy-efficiency ‘hub’ website must be created to guide senior executives through investment in energy efficiency.”

The report can be downloaded here.

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