My Lords, I declare an interest as CEO of SECR Reporting Ltd and as CEO of the Energy Managers’ Association, which represents about 5,000 energy professionals whose front-line job is to reduce the amount of energy used in the business sector. Its standing has been recently promoted by many companies declaring a climate emergency, which is a great thing to do, except that most companies in this country have not the ability or the understanding of how to reduce significantly the amount of energy they are using, which will be a problem.
I will take a different tack from many noble Lords and instead of lambasting the Government I will say that they are a world leader and, if they follow this route, will be seen at COP 26 as one of the premier Governments in dealing with climate change reduction. The reason for that is due to George Osborne. I do not think anyone has ever seen him as much of a climate champion, but back in 2016 when David Cameron was reported to say, “Let’s get rid of all this green crap”, what it meant was reducing the different energy subsidies such as FIT, RHI, CCAs and the CCL and replacing them with one taxation, the CCL, which came into effect in April 2019.
Linked to that was a report that 10,000 of the largest companies in the country will have to undertake in their financial year. The first tranche will have to start reporting in April 2020 when they lodge their report. The amazing thing about this report is that it sets out the road map for those companies to declare publicly what energy and carbon they are using, then set out quite clearly in a document that will be lodged with Companies House, if it is not in their own report, exactly what they are doing. For any shareholder, stake- holder or NGO that wants to look at that report, it will be totally clear to see what actions are being undertaken.
What have the Government actually mandated large companies to do? First, they have to record all their energy usage: electricity, gas and transport fuels. A lot of companies do not understand the amount of emissions they undertake on transport fuels. They have to report that in kilowatt hours. Then they have to report all the carbon in scope 1 and scope 2, and voluntarily in scope 3. They must then put in an intensity metric, which, because this report is coming out year on year, will show whether companies are going forwards or backwards. Obviously, it does not matter whether they grow or shrink, but it is a science-based target.
Interestingly, they must then say which methodology they have used to get to this—the EMA has written a handy methodology which can be used—because the next bit, which is fantastic, is that the companies must state the principal energy efficiency measures that they have undertaken. The Government have not set out what a PEEM—sorry, the Government are not great at acronyms—is, so in the EMA methodology we have set it out quite clearly. A company should state what policy and strategy it has for energy reduction, and who in the company is responsible. It should say what capex it is spending as a company and what opex it is undertaking, what contracts it is taking out with its FM providers, or what internal and external maintenance contracts, to ensure that it is doing things in a more energy-efficient manner going forward. Companies should look at their transport—which, of course, means electrification—and behaviour change.
This report must be lodged with Companies House. I will ask a couple of questions if I have time, but we have been talking to large companies, and it could be exciting if, by the time of COP 26 in Glasgow, the 10,000 companies are well on their way to publicly declaring this information, which is not replicated anywhere in the world. The really exciting part is that we are now discussing with large companies getting their supply chain to undertake SECR. They can do it very cheaply and lodge it for free on Companies House. Any company can then check its supply chain just by going to Companies House.
I finish with two questions. Will the Minister agree to a meeting with his excellent BEIS officials, who have written a fantastic programme, to see how this can be made part of the COP 26 process? Will he discuss with Companies House enforcing this as an electronic report that should then be available to all? Currently it is paper-based.