UK firms lack knowledge of energy expenditure
Many businesses in the UK are unaware of their energy spending and the costs involved, according to new research.
A poll by E.ON found that two thirds of senior managers had no understanding of how their business purchases energy, or even who buys it.
Some 46% said they have a ‘limited understanding’ of usage costs while 53% of those questioned suggested that their management board has a negative approach to energy strategy.
Less than half of firms also said there is a need for a short-term energy strategy, suggesting they are unaware of the costs that may be involved.
Numerous reasons were stated for this perceived lack of interest, including a lack of time, resources, funds and knowledge, named by 43%, 39%, 37% and 36% of key decision makers respectively.
Senior leadership may lack knowledge of energy by 68% of large businesses and 42% of smaller ones did one an individual that is responsible for energy.
However, three quarters of these decision makers were planning to reduce their energy usage, while 68% have compliance and legislation in place.
Signing off plans is proving tricky though, as those at board level often need to approve strategies and this can delay or even impede proceedings.
Where not acted upon, it can cost businesses as they overspend or pay for energy that is not actually used, pushing their operational costs up.
E.ON for Business director of customer solutions Phil Gilbert explained that the energy outlook is changing, as businesses will increasingly have more control.
This should enable firms to reduce costs, find more efficient means of operating and improve sustainability.
However, businesses that fail to devote time to understanding how energy processes work could continually waste finances that could be better spent elsewhere.
Energy spending is just one aspect of overall operational costs for a business and can be scrutinised through an independent business review.
Such actions should identify a strategy that can support a financially secure future in instances where there are cash flow issues, a need to refinance or if a firm is threatened with insolvency.
By Phil Smith