The dreaded word ‘compliance’ for many business owners conjures up thoughts of constraints and costs – unnecessary red tape that can become a burden to their businesses. But compliance does not have to be a mere exercise in ticking checkboxes; at Beyond Green, we aim to create real business value from compliance work by facilitating a wider perspective of ‘compliance’. Through a curious mindset we can find ways for compliance requirements to also improve profitability, reduce other business risks, and help you future proof your business against changing expectations.
What is compliance?
The word ‘compliance’ is rather complex – it encompasses statutory regulations enforced by the government, but also voluntary agreements with various stakeholders (customers, membership bodies etc) as well as a general assurance that internal processes are adhered to to manage risks. Let’s break it down and use real examples as to what this means in practice.
Energy Efficiency and Carbon Regulations
When it comes to statutory regulations, two that spring to mind immediately are the Energy Saving Opportunity Scheme (ESOS) and the Streamline Energy and Carbon Reporting (SECR) regulation. These primarily apply to bigger businesses.
Some may consider these regulations to be mere admin tasks, but we take the view that critically engaging with them and asking yourself what each regulation is asking you to consider and why can lead to further business benefits.
We now view ESOS and SECR as drivers to improve energy efficiency and reduce carbon emissions, as well as tools to communicate energy and carbon impacts to stakeholders. Approaching compliance with an open mindset allows you to find hidden cost savings, improve profitability, and enhance your reputation through a reduced carbon footprint. Our energy related compliance work has identified annual cost savings of £501,259 with an average payback of 0.9 years, and is helping businesses on their Net Zero journey.
As a small company, you may not be impacted by the statutory regulations like ESOS and SECR – but the large companies who are often require their supply chain to comply with voluntary requirements. This means that if you do work with bigger companies as a small business, you need to be prepared to provide evidence of your environmental policies.
Typically, SMEs need to be certified to ISO14001:2015, Archillies, etc to demonstrate responsible environmental management. But there is also a move towards needing to provide more detail now: our clients have needed to outline their environmental risk management, improvement targets and performance for tenders; in the case of Scottish Water, they have even needed to prepare a net zero carbon strategy to 2045. It is no longer enough to tick the box and dust off last year’s environmental policy. To grow your business and win tenders, you will need evidence to show how you are tackling climate change.
In addition to the above, compliance work can also be a tool to test whether a business’s internal systems and data are robust and reliable. This internal assurance is crucial to being able to monitor and improve business performance, as well as to respond to tenders with the confidence that you can deliver on your commitments.
An internal assurance with a business improvement mindset rather than compliance focus can really add value. The value created includes
- identifying large cost savings from monitoring resource use, such as identifying a waste of up to 50% energy spend outwith operational hours;
- using internal audits as an opportunity to empower people working on the frontline to make changes and share good practices;
- winning prestigious awards by substantiating claims with real evidence
We’ve supported clients in using compliance work to meet a number of different goals. For example, Paterson Arran have won a number of awards backed up with the assurance of the data. For Castle Group Scotland, our assurance of the risk of weather events enables them to effectively reduce project risks, and substantially improve profitability. For IOM, their EMS system ensured that they could meet the requirements of an unexpected regulatory audit of their solar PV system.
Projecting Regulatory Pathway
Compliance can be more than an exercise in ticking checkboxes if approached with a curious mindset. We believe that with the right focus, compliance requirements can deliver business value – potentially improving profitability or reducing operational and commercial risks. By adopting a positive and proactive attitude towards voluntary requirements, you can also set your business apart by showing customers and employees how you are working towards the Sustainable Development Goals and preparing for a Net Zero Future. We can help you start on your compliance work; you can get in touch here for more information.