Roughly five million people work in Business Services sites across the UK and, when they get home at the end of the day, they will be acutely aware of the need to manage high household energy costs.
Yet when it comes to the financial impact of heating, lighting, and servicing these workspaces, how many of their employers are as switched on to this supply and demand energy challenge? How often are city centre or industrial park office blocks still lit up overnight when most of their workers have gone home, for example?
Our Energy Survey reports that even when facing supply costs that are c.50% more than the UK industry average, energy is not high enough on the agenda for Business Services firms. While these costs remain susceptible to geopolitical shocks, it’s a challenge they must switch on to – and fast.
A lack of visibility is the single biggest barrier to mitigating high energy costs for three in five firms, with only 6% able to analyse usage and bills with up-to-date site information using an online portal. Most simply don’t have a clear or consistent view of where their energy spend is going, or what is driving this high consumption. That makes driving energy efficiency, or reducing their carbon footprint, even tougher.
Harnessing the power of technology
This sector is already tuned into the benefits of technology, such as AI, cloud technologies and data tools, to help analyse productivity, develop its competitive offer, enhance workforce performance, or improve purchasing power.
As organisations build their tech infrastructure, it’s crucial they incorporate energy consumption to drive efficiencies. Our research shows running cloud applications rather than in-house storage data can generate an 80% cut in energy usage.
Digital analytics can also improve their understanding of their energy landscape and help them build short and longer-term strategies to cut costs, drive efficiencies and lower emission levels.
The survey does reveal a desire to address this cost-carbon challenge over the next two years with a 10% rise in firms prioritising long-term certainty and emissions reductions when purchasing energy. It’s also encouraging to see that 80% of firms are reviewing IT spend as a priority with 68% acknowledging digital transformation as a key factor in countering the business impact of high energy costs.
Tackling high energy costs
High energy costs are undoubtedly stalling progress. Despite more than half of businesses reporting regulatory and investor pressure to decarbonise their operations, this sector is making slow progress. Businesses are less likely than the UK industry average to have incorporated Scope 1, 2 or 3 emissions reduction targets in their energy strategies or to sign a renewable energy supply agreement to cut emissions.
Many in the Business Services sector operate on relatively low margins, with little or no protection against rising energy costs. But even small steps can reap a wealth of cost-carbon benefits as well as greater energy security. Implementing energy efficiency measures and encouraging behavioural changes around energy in offices could reduce energy bills by up to 25% according to the Energy Saving Trust. For instance, small changes such as simply replacing incandescent bulbs with LED lights in offices and operational sites can reduce electricity consumption by 75%.
Those Business Services firms that can pick up the pace in their decarbonisation activities and net zero commitments, alongside targeted measures to reduce energy costs, will be in a stronger position to successfully weather future economic storms.
Download our UK Energy Survey 2024 for more of our findings.
Author Mark Anderson is supply chain and operations leader for PwC United Kingdom. Related: Read more PwC guest blogs here.
