The benchmark was undertaken by carbon management group Carbon Statement, which chairs the Hospitality Carbon Reduction Forum. The restaurant and bar groups involved in the assessment represent 80 per cent of managed outlets in the UK, including names like Whitbread, Pizza Express and J D Wetherspoon.
Key points the benchmark identified were:
- There is a two per cent difference identified in net profits driven by energy consumption
- Industry leaders are investing nine per cent of their annual energy spend in efficiency initiatives
- Energy is the second highest controllable cost factor for businesses in the industry after labour
Helping profits
The assessment showed that leading managing outlets are investing in efficiency initiatives and recognising that it can save them money in the long run. It recognised that energy is the second highest controllable cost factor which suggests that those who address the issue by choosing to be efficient now will benefit later when energy prices rise.
Carbon Statement’s director Mark Chapman said: “What we can see from the results is that companies which are further along into their energy efficiency plans have seen an impact on their profitability. If energy prices increase or double over the next five to ten years those operators that are efficient with their energy consumption will have a profit advantage against those that aren’t.
“We saw that the difference between the worst and best performing operators was a two per cent increase in operating profits. In a sector that makes anywhere between zero and twelve per cent profit a year, to make two per cent just from being energy efficient is a pretty major impact.
“Some of our forum members also forecast that within two or three years energy efficiency will become the first highest controllable cost factor and overtake labour costs, if energy prices do what they are expected to.”
Whitbread Group’s head of Energy & Environment Chris George said: “We are committed to reducing our environmental footprint both to support our business performance and as part of our obligations as a responsible company. The industry benchmarking exercise enables us to identify the key areas where we can improve, to share and adopt best practice across our industry.”
The Green Paper
The benchmark from the Hospitality Carbon Reduction Forum is not the only sign that the hospitality industry is going greener lately. The fourth Green Paper was released at this year’s Hotelympia last week, offering results from research into sustainability within the UK foodservice industry commissioned by energy efficient refrigeration supplier, Gram.
The results showed that more operators and chefs now believe themselves to be ‘green’ compared to when the report was first launched in 2008. Not having the budget to invest in sustainablilty was stated in the paper as the main reason for not doing so, though green organisations like the Carbon Trust believe in the long run it will save businesses money.
The Carbon Trust’s associate director Dominic Burbridge said: “Being green means being more efficient. Over the ten-year lifespan of your kitchen equipment, more than 80 per cent of your money is spent on energy consumed and less than 20 per cent on the equipment itself.
“Energy prices continue to go up year after year so investing a bit more upfront in energy efficient equipment is a no-brainer for any business no matter your size.”