ESOS Facts on a Page

The UK?s ESOS energy saving program stands for ?Energy Savings Opportunity Scheme?. Its purpose is to reduce demand – and hence fossil-based pollution at both ends of the supply chain. It currently applies to large UK companies only. However its guidelines are also valuable input to smaller firms voluntarily going greener.

The program threshold is 250 employees and / or turnover or at least ?UK50 million. This affects approximately 9,000 UK firms, with others below the threshold wondering whether the government plans to lower it. In essence, ESOS requires that qualifying businesses complete comprehensive audits of energy use and opportunities at least every fourth year.

The plan is carrot and stick. Compliant companies will probably uncover significant savings when they stop and measure. They may even unearth carbon credits they can sometime exchange for cash. Reactionary firms who try to duck the issue will feel Her Majesty?s wrath through stiff penalties. In time, they may find it harder to attract investors. If ESOS affects your company, then the wise thing could be complying by the first deadline of 5 December 2015.

To do so, you must conduct an energy audit and report it to the UK Environment Agency. This comprises

  1. Measuring total energy use across processes, transport and facilities
  2. Pie charting 90% of this to identify areas that are energy intensive
  3. Singling out cost-effective energy-saving projects in high use areas
  4. Submitting your report to the Environment Agency ahead of the deadline

ecoVaro recommends affected companies do not leave this to the last minute. While having ISO 50001 may exempt some from ESOS, the regulations are far from straightforward and it will take months to reach complete clarification. We would like to suggest a more balanced approach.

ESOS is a wonderful incentive to save energy costs while contributing to a better future for the kids. The Energy Savings Opportunity Scheme is precisely that. The cost of energy has crept up on us to the extent that we have to do something, government or no government.

Measuring energy consumption is as simple as installing meters at critical points in the flow, and you probably have many of them anyway. Once you have your data you no longer have to crunch the numbers. ecoVaro can do this for you and return the result in the form of handy graphs and spreadsheets.

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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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How Ventura Bus Lines cleaned up its Act

Melbourne?s Ventura Bus Lines grew from a single bus in 1924 to a mega 308-vehicle fleet by the start of 2014. The family-owned provider has always been community centric; when climate-change became an issue it took quick and urgent action. As a result it now stands head and shoulders above many others. Let’s take a closer look at some of its decisions that made the difference.

The Important Things to Focus On

Ethanol Buses ? Ventura is the only Australian company that uses ethanol power produced from sugar cane for experimental public transport. It compares emissions within its fleet, and knows that these produce significantly less CO2 while also creating jobs for locals.

Electric Buses ? The company has been operating electric buses since 2009. These carry 42 seated among a total 68 passengers. The ride is smooth thanks to twin battery banks kept charged by braking and forward momentum. When required, a two-litre VW engine kicks in automatically.

Ongoing Driver Training ? Ventura provides regular retraining sessions emphasising safe, environmentally-friending operations. Drivers are able to see their fuel consumption and carbon emissions online and experiment with ways to improve these.

Bus U-Turns ? The capacity to measure throughput convinced the company to abandon the principle that buses don’t do U-Turns for safety?s sake. Road re-engineering made this possible in a busy downtown street. This reduced emissions equivalent to 4,000 cars and reduced vehicle downtime for servicing.

Increased Business – These initiatives allowed Ventura Bus Lines to improve its service as customers experience it. This led to an uptake in patronage and a corresponding downturn in the number of passenger car hours. The pleasure of travelling green no doubt contributed to this.

How Measuring Made the Difference

Ventura Bus Lines is big business. Its 308 buses operate out of 5 depots, cover 31% of the metropole, and transport close to 70,000 passengers on average daily which is no minor task. The ability to track, measure and analyse carbon emissions throughout the area has earned it compliance with National Greenhouse Energy Reporting Threshold 1 legislation.

It also uses the data to re-engineer bus routes to further reduce fuel consumption, energy consumption and operating costs. It’s amazing how measuring is affecting its bottom line, and the health of the Melbourne community at large.

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Telemetry and the Survival of the Human Species

Without moisture, plants die. Without fodder, the animal food chain collapses. This is why climate change is the greatest threat humankind faces. Crop management needs timely information regarding ambient conditions, and also in the soil itself. In dry areas, online knowledge of trends in rainfall, sunlight, wind speed, leaf moisture, air temperature, relative humidity and solar radiation are indicators of soil stress that can be deadly for plants, and everything that relies on them.

As climate change bites, the need to find solutions accelerates. Drones swoop across to monitor ambient conditions, while probes sunk into plants and the earth in which they grow transmit information to big data repositories for feedback to administrators. In Australia, a remarkable cattle farmer is applying the same approach to his herds.

Nuffield scholar Rob Cook has always been on the edgy side of things. He lost his mobility in a helicopter crash in 2008 patrolling farmland but that has not deterred him. If anything, it has freed his mind to explore the potential that telemetry offers farmers in Australia. He shared this potential with the young beef producers in Roma Australia recently, and here is a summary what he said.

Being wheelchair bound he had to shift from herding with cattle dogs to a more scientific approach. He bought a farm 230 miles / 370 kilometres inland from Brisbane in a warm, temperate climate with significant rainfall even in the driest months. He uses observant software that reports on critical issues like water levels indicating animal consumption, and supplementary water flows from a central irrigation channel.

He also monitors fodder sources for dryer months, and moisture levels in food stocks. Rob is committed to making every blade of grass count. ?We even have the ability to take a photo of the cattle when they are taking a drink of water,? he explains, and that provides valuable information regarding tick and fly infestation and overall condition.

None of this would be possible for Rob Cook without telemetry, which is the process of collecting data at remote points and transmitting it to receiving equipment for analysis. Independent farmers do not have equipment to fund these analytic resources on their own, and use big data resources in a cloud to obtain reports. ecoVaro is on top of current trends. Please speak to us when you need independent advice.

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