C&W Perspectives

In recent years legislation has been brought in to encourage companies to focus on their energy consumption and to force them to disclose relevant ESG information to the market. Often the same data can be used in both voluntary and mandatory reporting schemes. This has required the implementation of new data gathering processes across portfolios and is altering the expectation of managing agents. One example of legislation in this area is a new reporting directive which, from April 2019 – and regardless of Brexit – requires ‘large’ UK organisations to report certain ESG data within their annual reports. Data will need to include both direct and indirect emissions from energy and transport. This legislation is expected to capture around 12,000 companies in the UK – a substantial increase on those already legally required to record and report on this data. Another example is the “Energy Savings Opportunity Scheme (ESOS)” which requires companies to conduct energy audits on sites and transport covering 90% of their overall carbon emissions. The deadline for compliance is December 2019. Given these requirements – and the potential cost savings available – many organisations are investing in automated metering programmes. These will provide both compliance data and site energy performance analytics which can be used to identify and address poor site performance and unexpected peaks in energy consumption. Enforcement is expected to continue to be strict for these schemes moving forward. In Phase 1 of ESOS the Environment Agency issued approximately 600 enforcement notices and various civil penalties for non-compliance. Using data to ensure compliance In Phase 1 of ESOS the Environment Agency issued approximately 600 enforcement notices and various civil penalties for non-compliance Legislative changes are anticipated in this area in future. ‘Streamlined Energy and Carbon Reporting’ was recently announced as the UK’s main reporting scheme from 2020 and is likely to be developed to include wider ESG data reporting, together with various elements of ESOS. Robust portfolio wide processes to centrally gather ESG data will better allow organisations to respond to these changes. CUSHMAN & WAKEFIELD 05 LEAD STORY