2015 ESOS Guidelines Chapter 3 to 5 ? The ESOS Assessment

ESOS operates in tandem with the ISO 50001 (Energy Management) system that encourages continual improvement in the efficient use of energy. Any UK enterprise qualifying for ESOS that has current ISO 50001 certification on the compliance date by an approved body (and that covers the entire UK corporate group) may present this as evidence of having completed its ESOS assessment. It does however still require board-level certification, following which it must notify the Environment Agency accordingly.

The Alternate ESOS Route

In the absence of an ISO 50001 energy management certificate addressing comprehensive energy use, a qualifying UK enterprise must:

  1. Measure Total Energy Consumption in either kWh or energy spend in pounds sterling, and across the entire operation including buildings, industrial processes and transport.
  2. Identify Areas of Significant Energy Consumption that account for at least 90% of the total. The balance falls into a de minimis group that is officially too trivial to merit consideration.
  1. Consider Available Routes to Compliance. These could include ISO 500001 part-certification, display energy certificates, green deal assessments, ESOS compliant energy audits, self-audits and independent assessments
  1. Do an Internal Review to make sure that you have covered every area of significant consumption. This is an important strategic step to avoid the possibility of failing to comply completely.
  1. Appoint an Approved Lead Assessor who may be internal or external to your enterprise, but must have ESOS approval. This person confirms you have met all ESOS requirements (unless you have no de minimis exceptions).
  1. Obtain Internal Certification by one of more board-level directors. They must certify they are satisfied with the veracity of the reports. They must also confirm that the enterprise is compliant with the scheme.
  1. Notify the Environment Agency of Compliance within the deadline using the online notification system as soon as the enterprise believes is fully compliant.
  1. Assemble your ESOS Evidential Pack and back it up in a safe place. Remember, it is your responsibility to provide proof of the above. Unearthing evidence a year later it not something to look forward to.

The ESOS assessment process is largely self-regulatory, although there are checks and balances in place including lead assessor and board-level certifications. As you work through what may seem to be a nuisance remember the primary objectives. These are saving money and reducing carbon emissions. Contact ecoVaro if we can assist in any way.

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Why Spreadsheets can send the Pillars of Solvency II Crashing Down


Solvency II is now fast approaching and while it may provide added protection to policy holders, its impact on the insurance industry is not all a bed of roses. Expect insurance companies to restructure, increase manpower, and raise spending on actuarial operations and risk management initiatives. Those that cannot, will have to go. But what have spreadsheets got to do with all these?

Well, spreadsheets aren’t really the main casts in this blockbuster of a regulatory exercise but they certainly have a significant supporting role to play. Pillar I of Solvency II, which calls for improved supervision on internal control, risk management, and corporate governance, and Pillar II, which tackles supervisory reporting and public disclosure of financial and other relevant information, both affect systems that have high-reliance on spreadsheets.

A little background about spreadsheets might help.

Who needs an IT solution when you can have spreadsheets?

Everyone in any organisation just love spreadsheets; from the office clerk to the CEO. Because they’re so easy to use (not to mention they’re a staple in office computers), people employ them for processing numbers and as an all-around tool for planning, forecasting, reporting, complex modelling, market data analysis, and so on. They make such tasks faster and easier. Really?

You probably haven’t heard of spreadsheet hell

Unfortunately, spreadsheets do have certain shortcomings. Due to their inherent structure and lack of controls, it is so easy to commit simple errors like an accidental copy paste, an omission of a negative sign, an incorrect data input, or an unintentional deletion. Such shortcomings may seem harmless until your shareholders discover a multi-million discrepancy in your financial report.

And because spreadsheet errors can go undetected for a long time, they are constant targets of fraudsters. In other words, spreadsheets are high risk applications.

Solvency II Impact on Spreadsheet-based Financial and IT Systems

Regulations like Solvency II, are aimed at reducing risks to manageable levels. Basically, Solvency II is a risk-based system wherein a company?s capital requirements will depend on its measured riskiness. If companies want to avoid facing onerous capital requirements, they have to comply.

The three pillars of Solvency II have to be in place. Now, since spreadsheets (also known as User Developed Applications or UDAs) are high-risk applications with weak control features and prone to produce inaccurate reports, companies will have a lot of work to do to establish Pillars II and III.

There are at least 8 articles that impact spreadsheets in the directive. Article 82, for example, which requires firms to ensure a high level of data quality and accuracy, strikes at the very core of spreadsheets? weakness.

A whitepaper by Raymond Panko entitled ?Spreadsheets and Sarbanes-Oxley: Regulations, Risks, and Control Frameworks? mentioned that 94% of audited real world operational spreadsheets that were included in his study were found to have errors and that an average of 5.2% of all cells in the audited spreadsheets had errors.

Furthermore, many articles in the directive call for the enforcement of better documentation. This is one thing that’s very tedious and almost unrealistic to do with spreadsheets because just about anyone uses them. Besides, with different ‘versions? of the same data existing in different workstations throughout the organisation, it would be extremely difficult to keep track of them all.

Because of spreadsheets you now need an IT solution

It is clear that, with the growing number of regulations and the mounting complexity of tasks needed for compliance, spreadsheets no longer belong in this era. What you need is a server-based solution that allows for seamless collaboration, data reliability, data consistency, increased security, automatic consolidation, and all the other features that make regulation compliance more doable.

One important ingredient for achieving Solvency II compliance is sound data risk management. Sad to say, the ubiquitous spreadsheet will only expose your data to more risks.

More Spreadsheet Blogs


Spreadsheet Risks in Banks


Top 10 Disadvantages of Spreadsheets


Disadvantages of Spreadsheets – obstacles to compliance in the Healthcare Industry


How Internal Auditors can win the War against Spreadsheet Fraud


Spreadsheet Reporting – No Room in your company in an age of Business Intelligence


Still looking for a Way to Consolidate Excel Spreadsheets?


Disadvantages of Spreadsheets


Spreadsheet woes – ill equipped for an Agile Business Environment


Spreadsheet Fraud


Spreadsheet Woes – Limited features for easy adoption of a control framework


Spreadsheet woes – Burden in SOX Compliance and other Regulations


Spreadsheet Risk Issues


Server Application Solutions – Don’t let Spreadsheets hold your Business back


Why Spreadsheets can send the pillars of Solvency II crashing down

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Align IT Investments With Organization Goals

While some organisation leaders loathe spending on IT, a growing number are already convinced of the necessity of investing in it. Unfortunately, a substantial fraction of those convinced to pursue IT investments are misguided as to which initiatives are really contributory to reaching their organisation’s goals.

In the end, many of their purchases either end up underutilised or become white elephants altogether. There are also those difficult to spot – IT purchases that do become integrated into daily operations but have little effect on the organisation’s growth, positioning, profitability, or efficiency.

If a purchase is to cost your company a fortune, then its positive impact on established company objectives should reflect accordingly. But how would you know it would? You can’t hope to foresee all its benefits especially if the IT solution is still quite new to you.

Our job is not only to identify the strengths of an IT system but also to determine whether these strengths are at all useful to your organisation’s thrusts.

Basically, here’s what we’ll do:

  • Conduct a rigorous analysis of your organisation to determine the specific and overall impact of certain IT solutions. We’ll be looking for areas where the effects of IT can result in the most rapid reduction of costs and, at the same time, drive the organisation in the direction of its established goals.
  • Propose cohesive best-of-breed solutions in line with the results of our analysis. Our familiarity with the IT landscape and our extensive selection of contacts in the industry will allow us to conduct insightful picks from a vast field of choices.
  • Establish best practices to make sure IT investments are optimally utilised.
  • Perform periodic reviews to ensure practices and processes are still in line with the established goals.

Find out how we can increase your efficiency even more:

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Shared Services ? Are They A Good Idea

Things happen fast in business and we need to stay on top. It does not seem long ago that some enterprises were still hands-on traders or artisans with a few youngsters to help out. People like that did not do admin and their accounting was a matter of making sure there was enough money in the jar.

When Wal-Mart’s Sam Walton took over his first shop in 1945 things had moved on from there, although he did still deal directly with his customers. When he died his legacy was 380,000 jobs, and a business larger than most economies. So there?s plenty we can learn from how he grew his business.

One of Sam?s secrets was his capacity to centralise what needed gathering together, while empowering store managers to think independently when it came to local conditions. His regional warehouses had individual outlets clustered around them within one day?s drive each. This shared service eliminated 90% of safety stock and released capital for expansion.

Wal-Mart took sharing services a step further in February 2006, when it centralised accounts payable, accounts receivable, general accounting and human resources administration at Wal-Mart Stores and Sam?s Clubs in the U.S. and Puerto Rico. The objective was to bring costs down, while allowing local managers more time to focus on their business plans and other initiatives. As a further spin-off, Wal-Mart was able to integrate its data on a single SAP platform and eliminate significant roadblocks.

This is an excellent example of sharing services by creating own centres of excellence.? Of course, this is not the only business possibility. Other corporates have successfully completely outsourced their support activities, and Wal-Mart has no doubt had a variety of similar offers too. But, is the Wal-Mart picture entirely rosy, or is there a catch?

The Association of Chartered Certified Accountants has indicated that top talent may be the loser globally. This is because the Wal-Mart model removes many challenges through standardisation, and offers less scope for internal promotion as a result. Language and cultural differences may also have a long-term detrimental effect on the way the departments work well together.

Local outsourcing ? this is the business model where several firms engage a shared service provider independently- may hence prove to be a more malleable option for smaller companies. It often makes more sense to hunt down made-to-order services. Offerings such as the professional support we offer on this site.

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