The Sustainable Footprints Team attended the recent CEDREC Roadshows in London and Sheffield, which are great annual events covering legislation updates for both the environment and health and safety. We are regular attenders at these events, as we find them invaluable. For information about CEDREC, see www.cedrec.com.
The 2020’s are being lauded as the decade of significant change for UK environmental legislation. With the government setting the net-zero target of 2050, there is an urgent need for businesses and other institutions to implement more sustainable practices and embrace net-zero for themselves. It has therefore been disappointing to see how little progress there has been in bringing forward a lot of the required legislation, with much of it still in the consultation phase.
Energy Savings Opportunities Scheme (ESOS)
We are currently within the compliance period for ESOS Phase 3 but there is still ongoing consultation about potentially strengthening the ESOS requirements for this phase. The proposed changes include the requirement to report greenhouse gas emissions (GHG); the potential public disclosure of ESOS reporting, to allow more transparency and implementation; and the introduction of further ESOS auditor qualifications.
In addition to this, there is also consultation on further increasing requirements for ESOS Phase 4 (deadline 5th December 2027) by lowering the threshold to medium-sized enterprises (MSE) in order to increase the number of participants. The new eligibility criteria would involve organisations to have 50 or more employees, or a turnover of greater than £10.2m and a balance sheet total greater than £5.1m. We are not yet sure, if this will apply to all MSEs, or only to those that are industrial in nature or have a high energy usage but hopefully this will be confirmed soon. It is also proposed that implementing ESOS recommendations with a payback period of between 3 and 7 years becoming mandatory.
These proposed changes, especially those related to phase 3, which is right around the corner, may have a knock-on effect to organisations already preparing data, as the proposed reporting requirements won’t be announced until a later date. This is why Sustainable Footprints Ltd are already preparing for the new requirements when collecting data on site. However, there is a possibility this could change the compliance deadline due to the proposed last-minute change.
Task Force on Climate Related Financial Disclosures (TCFD)
There have been some significant changes to mandatory climate-related disclosure reporting. As of 6th April 2022, Britain’s largest companies and financial institutions must now report on their climate-related risks and opportunities in alignment with the requirements set out by the Task Force on Climate Related Financial Disclosures (TCFD). TCFD are an industry-led group which aim to help provide transparency to investors.
This new legislation will include many of the UK’s largest banks and insurers, as well as private companies with more than 500 employees and a turnover greater than £500 million. Aspects to include in this new reporting disclosure include climate related risks and opportunities; the time period of these risks; actual/potential impact on business activity; a resilience assessment; and targets and KPIs for the management of risk and resilience.
Moving towards the environmental side, the Environmental Act came out last year and it is the most significant piece of legislation in decades due to the resolutions of Brexit issues and a new framework for environmental controls, such as the Office for Environmental Protection (OEP). Currently, the act is only directed at governments; however, it is likely that this will be directed to the general public through regulations and requirements from the government at a later stage.
The OEP are new independent environmental regulators with the aim of holding local authorities and the government to account if they don’t achieve set environmental targets. However, it looks like a long process for this to happen due to the scope lacking clarity. A ‘public authority’ is described as a person carrying out any function of public nature that is not a devolved or parliamentary function. The scope later explains “the term public function is not defined in the act (or in the Human Rights Act 1998), so it will ultimately be for the courts to determine what constitutes a “public function.” We are now awaiting further clarification of the scope.
Plastic Packaging Tax
The plastic packaging tax came into force from 1st April 2022. Businesses are obligated to register and report (even if not taxable). There is a £200 per tonne charge for plastic packaging manufactured in the UK where over 10 tonnes of plastic are manufactured in either the last 12-months or the next 30 days.
This new piece of legislation is very interesting as, if someone in your supply chain is not paying the tax, you can be held accountable for their non-compliance. Furthermore, there is a lot of confusion over the rules of financial modifications – for example, if you print an expiry date onto a water bottle you are classed as a manufacturer; however, if you put a label onto the product then you aren’t.
Plastic in scope includes transport packaging within the UK used for supply chains and single use consumer packaging. Primary functions such as medical equipment or first aid boxes are exempt.
Environmental Changes to Buildings Regulations
From 15th June 2022, anything greater than 25% of a new or major refurb site’s carbon footprint will be required to include electric vehicle charging infrastructure if they plan on having at least 10 parking spaces. This infrastructure must include at least one charging point and at least 1 in 5 spaces having cable ducting to allow future charging point development for electric cars.
Additionally, in the building sector, the Bill for Minimum Energy Performance has proposed amendments of regulations to introduce new rates. Currently, the rating for domestic buildings is B and non-domestic E. By 2030, it is proposed that all non-domestic rented B and B with milestones in 2025 and 2028 for new and all domestic rented to become B and C.
To conclude, a lot of eligibility criteria for new compliance is open to interpretation, very loosely explained and subject to last minute reviews which will undoubtably cause issues for eligible organisations. It’s therefore important to keep an eye out for any future changes to what has been discussed in this blog, especially due to the fact that a large amount of legislation still remains in the consultation stage. Sustainable Footprints will be keeping you up to date via our social media feeds, bi-monthly newsletters and blogs so watch this space!
We want to thank CEDREC for having us and we look forward to attending your roadshow next year!