Heightened awareness of sustainability and ESG is impacting more than just the boardroom agenda and investor interest, consumers are becoming increasingly concerned about how their purchasing decisions are influencing change and net-zero.
This is driving a growing trend for sustainable socialising where the expectation is that the consumer experience will be reinvented to be more sustainable with a focus on biodegradable products, zero-waste, eco-friendly ingredients, and harnessing renewable energy.
For many operators an easy way of enhancing their sustainability credentials is to switch to renewable energy, and there are several options to consider. The first is switching to a green energy supplier where the energy generated comes from renewable sources such as wind, solar or hydro power. However, some operators may want to go a step further – taking on the design, build, operation and maintenance of their own portfolio of renewable energy assets and depending on the nature of their property portfolio that could be a combination of rooftop solar and energy storage. If that is a step too far, then they may want to look at a concession type arrangement whereby they procure energy services from a third party via private wire generation. For example, the largest soft drink bottling facility in Europe operated by Coca-Cola European Partners, is powered by a 5MW solar farm by a 4,300m long private wire cable to the bottling facility. The final option is to look at a corporate power purchase arrangement with an off-site generator. This option is exemplified by the City of London Corporation that signed a power purchase agreement under which it will buy all the electricity produced by a 49.9Mw new-build solar farm for 15 years, providing over half the City Corporation's electricity needs, powering buildings including its historic Guildhall, three wholesale markets and the Barbican Arts Centre. However, for operators with a diverse portfolio of venues to get the right balance to meet all its energy requirements a combination of solutions may be needed.
Alongside switching to renewable energy offering on-site EV charging is another important consideration, and one which, as the UK moves toward vehicle electrification, may become an expected value add alongside the standard options such as WiFi. A number of leisure operators, particularly those with out-of-town venues with on-site parking, are already starting to install EV charging points. However, this will be much more of an added value that will enhance consumer experience at venues rather than provide additional income. This is often undertaken in conjunction with a charge point operator that will fund, install and operate the chargers across the portfolio. This model provides the operator with expertise they may not have in-house and takes away other considerations such as upfront capex, unpredictable utilisation rates and having to install, operate and maintain complex hardware and software systems. In return the operator adds to its sustainability credentials and its consumer experience. It is worth noting that for EV charging to be really "green" the power for the charger needs to come from renewable energy sources, and therefore operator may wish to consider private wire renewable energy generation options and EV charging as part of the same sustainability package rather than as stand-alone solutions.
Harnessing renewable energy and providing on-site EV charging are only part of a rounded sustainable focus but they could help provide pubs and bars with leading edge at a time when the sector is being impacted by economic uncertainty and changing consumer expectations in terms of a venue's sustainability.
Q&A
Q. I've read that illegal working civil penalties are set to triple next year – what does this mean for me?
Employers employing illegal workers are liable to civil penalties, which are applied on a strict liability basis irrespective of the employer's intent or ignorance of the rules. From January 2024 they are to increase from £15,000 for a first breach and £20,000 for subsequent breaches within 3 years, to £45,000 and £60,000.
Completing Home Office prescribed right to work checks provides a defence to civil penalties, provided you have no knowledge of the illegality. There is no standalone liability for failing to complete compliant right to work checks – but it is very important to do so to safeguard your business.
Q. My patrons are increasingly asking if they can bring their own birthday cakes into the pub. Can I charge for this?
This is more a PR issue than a legal one. Firstly, you are entitled to charge customers for the privilege of bringing any outside food or drink onto your premises. This would be the equivalent of 'corkage' for someone asking to bring their own wines in. However, from an optics point of view, are you losing anything that might hit your bottom line by allowing cakes to be brought in free of charge? If a private party is dining and spending a lot of money, is it worth the reputational risk of customers leaving bad reviews for you being 'tight'? I would suggest considering each situation on its merits.
Read more in Pub & Bar's November 2023 issue: https://www.pubandbar.com/magazine.php?c=issue-nov-2023
This article was first published in Pub & Bar.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
