Call to cut energy consumption

Growing businesses in the engineering and manufacturing sector (EM) are not doing enough to control their consumption of energy, according to a new

. The study, released today by accountants and business advisers

, also shows EM companies are largely ignorant of incentives for becoming energy efficient.

PKF surveyed 400 growing businesses, nearly 100 of which were in the engineering and manufacturing industry, in January 2006. The aim was to find how the sector that uses around half of the UK’s business energy is coping with rising prices, the global responsibility to cut emissions, and the need to stay competitive.

While findings suggest 92 per cent of EMs have suffered rising fuel costs in the last 12 months and 58 per cent are finding it impossible to pass all the increase onto customers, nearly half (46 per cent) are not aware of the benefits available to them in becoming energy efficient and 83 per cent have not considered using alternative fuels or power as energy prices rise.

Toby Stephenson, partner for growing businesses at PKF, said, “Energy efficiency is no longer just a green issue but something all businesses should frequently review to curb the ever-increasing energy burden on both their costs and the environment. It is clear from the findings that many businesses could be doing a lot more to reduce their own energy costs and contribute to the national target for reduction in carbon emissions.

“It is worrying to find that, in spite of high levels of anxiety (87 per cent) among engineering and manufacturing businesses about rising fuel costs, 83 per cent have not considered alternative sources and over half are not aware of government targets and benefits available to them in becoming energy efficient.

“Businesses must be encouraged to adopt a much more rigorous and sustainable approach to this issue to stop this ‘frittering away’ of energy.”

Although 89 per cent of EM respondents feel some responsibility to be more energy efficient for climate change rather than commercial reasons, the strongest motivation for improving their businesses’ energy efficiency is the opportunity to reduce costs. Even then, 75 per cent of EM respondents need to be reassured that the benefits would clearly outweigh the initial investment costs and any upheaval of putting energy saving measures in place.

Thirty five percent of respondents would be encouraged to buy energy-efficient items if all small and medium sized businesses were entitled to the lower rates of VAT available for large construction projects.