In association with British Gas Business, MT invited SME bosses and specialists to discuss a subject that, with the challenges of recession and climate-change, has taken on an added urgency.
Andy Saunders: How important is energy efficiency to you as SMEs, and what are the drivers for your energy efficiency motivations? Also, tell us a bit about what you have been doing and how well, or otherwise, it might have worked.
Stuart Hough: For us, energy efficiency is a hugely important topic and one that is growing in importance. As an energy company, we have a big role to play in helping businesses change the way they operate in a low-carbon economy. So my objective is to hear your experiences and understand what you have done already and what you think we should be doing more of to try and help you through that difficult agenda.
Chantal Coady: For a business to take on huge capital expenses that would take years to repay does not make sense. Perhaps much smaller ways within the organisation are better. We do not do company cars. We are going to put in showers so you can cycle to work; we put in the Evans Cycles Ride2Work scheme, where you do it through payroll and get a discount. Those sorts of things, although small, can only be helpful - trying to change the way everyone is living their lives across the organisation.
Martin Fry: It is just the simple things: when a refurbishment is happening, it is making sure that you have the right measures put in, and the controls. A good example: in our village hall, the urinal flushing system just went on and on, and I did daily measurements for a month. If you put a sensor in to manage the controls, it switches off when no-one is using the toilet. It paid for itself in just over a year.
It is straightforward, but if you're refurbishing, do you always make sure these features are in: the lighting controls and the water controls? They are so cheap to put in, and the payback is so short. It is getting the low-hanging fruit.
Chantal Coady: When we did a new shop-fit, our air-conditioning guys said: 'We have this new technology that will recycle the heat and warm up your water. It's not a huge thing, but it is nice to feel that energy is actually being re-used for our hot water.
Martin Fry: There's no doubt oil prices are going to rise. Where you are oil-dependent, it is getting ahead of that, say with oil-dependency audits. They look at businesses and say, 'Suppose the price is x, y or z, what are the implications?' - and try to get ahead of that, rather than be caught out.
Russell Downing: As well as the organic farm, we have an eco conference centre, and we do lots of things there to save energy. We have a water-filtration system where we take it out of the ground and put it back clean; it's done through gravity, there's no mechanics involved. So, we are self-sufficient on the water front.
We are trying to get self-sufficient on electricity, but having green electricity bought in is costing us £5,000 a year more than brown electricity. That is a real dilemma. We'd like to think our morals and ethics were strong enough to say: 'We will spend that money to ensure we have that green supply.'
Paul Lindley: It's very easy with energy questions to make the issues too simplified. One of our manufacturers is in Italy, and has installed solar panels on all its roofs, quite an energy-intensive process; our manufacturing is all done using (purchased) energy. I worry that although that manufacturing is done near the source of the fruit that we use, we have to move it all back to the UK, which 90% of the time will be done by sea but sometimes we have to rush it over by land. My business is about feeding children better; I have a limited amount of time to worry about where it is coming from.
Last year, we were looking at alternative types of packaging. One was compostable pots. It sounds as eco-friendly as you can get, but the plastic, made out of maize, comes from China, is processed in the US and then comes to the UK, so you have all those miles. The Chinese maize is GM, and we are an organic company. You can compost it, but only industrially, and there are no industrial compost places in the UK, but the consumer doesn't know that.
Russell Downing: We have a very ethical and green product. To get that to market in its various forms, we have to use packaging. We have looked to different sources of packaging, some including potato starch, which will hold our raw meat for long enough. But then you are doubling your packaging costs. Can you pass that on? The consumer will not pay for that.
We don't have the food miles, because everything is reared and processed on the farm and then shipped to the shops. But you still have the dilemma of whether we to a plastic tray with a heat seal; do we overwrap it, do we flat-pack it? So, we still have the packaging problem. It is education of people as well, like trying to get our customers to buy four fillets in individually wrapped packs and splitting them for freezing.
Nick Greenall: Around 2.6 million tomatoes end up in landfill every year and the supermarkets get a lot of credit for publicising little bits of eco-friendliness. But, if you think of 'buy one, get one free', how many times have you been in the queue at the supermarket, where you are buying something, and they give you a chicken you did not ask for? That chicken might end up in the dustbin. The energy that has gone into it; the packaging, the shipping ...
Stuart Hough: There are two things here: the ethical debate around what is good in the community, and whether people in business need to take a leadership stance on that. Perhaps we do. But using less energy saves money. That is where I think there is a real part for us to play, inasmuch as there are some no-brainers that save business considerable sums of money.
David Caro: A lot of small businesses are trying to do everything with limited management resources. You hear a lot about the costs of energy increasing, environmental legislation coming. New small businesses are frightened about how much this is going to cost. The Government and the energy bodies have to change the emphasis and say: 'This can be a benefit to you. Do not be frightened by it: embrace it.'
The latest thing is smart metering. Utilities are saying: 'We are going to bring in smart metering - and charge you for putting it in place.' A lot of small businesses are thinking: 'Why are we paying for something that is going to save money for the energy companies?' Why can the Government not use the climate-change levy that it's putting onto our energy bills to pay for these meters?
Martin Fry: It is not clear businesses are paying. They're putting smart meters into all new homes and developments, but I think cost is on the tariff, is it not? It's not a major impact. One of the issues with a lot of utility bills is that they're often misestimated or wrong. With meters, you get rid of that problem. But you can now get clip-on electricity meters that some utilities give away - I paid £20 for one. You just clip it on to your supply and it tells you what you're using. This whole concept of smart metering information is inexpensive.
Stuart Hough: The data you get from a smart meter is very sophisticated and you can use it in a very clever way.
David Caro: That needs to be publicised more. All business is seeing is: 'Smart meters are coming out, you are going to have to pay.'
Andrew Saunders: I'm sure your businesses are focused on managing costs at the moment, so you can sell these as good for your carbon footprint. But you are also going to save money. That is a pretty compelling statement.
Russell Downing: There's an element of greenwashing, though. In my industry, the fact that a conference centre was sustainable, ethical and green used to be the number one priority when looking for meeting space. In the credit crunch, it has dropped to number six. We do quite a lot in terms of sustainability, but we have people in our industry who have a recycle bin in the room and (on the strength of that) claim to be a green or ethical conference centre or hotel.
We need to make people aware that being green can be more expensive, but does not have to be. Just doing the simple things, or aligning your brand with someone who is already doing it and sharing the workload, is much easier than turning your back on it when times are bad.
Nick Greenall: You can make money with your waste if you look for an opportunity. We have 30 tonnes of wood dust a week from a factory we built 12 years ago. All of our waste used to go to a landfill. We researched and we got a relationship with Yorkshire Water, which uses it for composting the sewage beds. For years, we gave it that for free, because, prior to that, it cost £30,000 to get rid of it.
Latterly, we found - and this is where it comes down to education - there are people who reprocess it into biomass fuel. They pay us so much per tonne to take it away; we used to pay, and they take it for free and pay us for it.
Yet it is hugely difficult to get our suppliers into that chain. They cannot get their heads around it. People will not do it, even though they can save money straight away.
Alastair McCracken: Biofuel has caused a cost increase, because we use palm oil - palm, coconut and castor. And because a lot of palm oil plantations are now going to manufacture biofuel, palm oil has gone up in price, in line with mineral oil. All the others went up as well.
Andrew Saunders: A lot of what we are hearing around the table is about grabbing small, quick wins. What is your attitude to longer-term investment in energy efficiency? Is that on your radar?
Alastar McCracken: It is too far out for us. It is more of a long-term thing. We are not thinking about it all that much, but that may change.
Gloria Daniels: I did ask whether we could use solar power, and the consultant said: 'We would need 1,100, so it would cover the whole of Stoke.' He did add, however, that we were a bit green: we could toast oatcakes in the kilns.
David Caro: The Government does need to look at models elsewhere, especially in Europe, to see how they have introduced measures and involved their populations. It's something we don't seem to be able to do in this country.
Andrew Saunders: The orthodoxy for the past 30 years has been a laissez-faire approach, that the market will prevail. In many ways, it does. But there is clearly a vacuum at the centre of policy, and perhaps that is starting belatedly to be an issue.
Scott Martin: We are not an 'ethical' company, but there is an inefficiency. We have 30 million disposable cups flying around the country, being thrown out of car windows, and you lose control of that. But there is something we can do there with regard to our brand building, about whether our cups are recyclable - which they are. We go to great lengths to source them from appropriate locations, but if you throw them out of the window, they will not biodegrade. So we're trying to see what we can do to put stations in motorway service areas where cups can be disposed of. And, actually, it's an investment we make, but it has an ethical element. We buy equipment from 7,000 miles away in the US, which is an inefficient way of buying. There is no manufacturer of espresso machines in the UK. The nearest is Italy, and they are a bit unreliable.
David Caro: One of the things I would like to throw in is the law of unintended consequences in relation to the waste regulations that the Government brought in. The collection of waste was so broadly banded that you need a waste collection licence. But it stops the recycling guy from going to the electronic store where they have TVs returned, because he needs a waste-collection licence. And take fly tipping: you have a local guy who comes in to do rewiring or plastering in your house; he cannot take the rubbish away because he needs a waste collection licence. If somebody has all this rubbish and cannot dump it, they are going to fly-tip it. Then you get your environmental consequences in the countryside.
Gloria Daniels: They have a weigh-in at recycling places, and they weigh your vehicle and give you £1 for the stuff you're bringing in. I recently did up my flat, and it was good fun to go to the recycling centre and split everything up. Actually, it is really good for you to sit there and break everything down and realise what you are creating.
Chantal Coady: Scott, what do you do with your coffee grinds?
Scott Martin: If anyone wants them, we give them away, otherwise we throw them away. It is one of those difficult things to communicate; we have not got a shop. Some Starbucks shops in London put up a little sign, saying: 'Take our grinds away, they are good for your roses.' That is difficult when we have 400 tonnes of spent coffee grinds.
Chantal Coady: There's no way of putting them into a biodigester?
Scott Martin: No, because we are so disparately distributed across the country.
Chantal Coady: That is something that would be very simple for every local authority to have: a big bin for biodigestible things, such as a local compost bin that everyone would be able to put their waste into.
David Caro: But then you go back to the other problem. One of our members is trying to get a biodigester built in the Brecon Beacons. Because they are inside the national park, they cannot get permission. The Government is saying they can have it, but the planning authorities reject it because there are a couple of objectors, even though nobody can see it. So you have this double force: the Government saying, 'do it', and the council saying, 'not in our back yard'. It goes back to the local authority: it could have a local agreement with your coffee shop and then collect the grinds.
Russell Downing: In our farm, we had a composting system in place. We took all the green waste and compostable waste from West Berkshire. We also used all the local racecourse stable waste, and we had a field dedicated to this composting process. But the local council said we needed to put a concrete screed down - a £250,000 investment - because it would run off into the field. Well, even if we put the concrete down, it is still going to run off. That is what we are up against. So we were not prepared to do that, and the waste now just goes into landfill. It's bureaucracy gone mad.
Andrew Saunders, deputy editor, MT
Alastair McCracken, Droyt Products
Gloria Daniels, Big Tomato Company
Paul Lindley, Ella's Kitchen
Nick Greenall, Rixonway Kitchens
Stuart Hough, British Gas Business
Russell Downing, Sheepdrove Organic Farm
Scott Martin, Coffee Nation
Chantal Coady, Rococo Chocolates
Professor Martin Fry, City University
David Caro, Federation of Small Businesses