Wednesday 15 June 2022

This book sets out the issues that company boards face in the light of climate change and the wider set of factors that fall under the ESG banner, and provides useful advice for boards at all levels. It is clear that climate change, the drive to net zero, and the rapid rise of ESG investing creates many new problems for boards to consider and there is an urgent need to upskill boards to deal with them adequately. All of these factors are also in the context of a fundamental shift away from the shareholder primacy model of capitalism towards a broader model of stakeholder capitalism, the exact forms that this shift takes is not yet totally clear and there may be multiple models.


The book sets out the context and explores specific issues including amongst others; the SDGs, gender diversity; corruption; and managing responsibility in supply chains. As well as setting out the context of each of these the book provides useful examples of how to deal with them and recommendations for action.


My only criticism of the book is that it seems to assume all ESG investing is equally good, even though it is clear that there are degrees of ‘ESG washing’ and not all ESG investors or funds are applying truly rigorous standards. Having said this the direction of travel of the finance sector is clear and the shift towards ESG and impact investing is already having a massive impact on boards of companies of all sizes. As well as the requirements for larger companies to comply with regulations such as the Sustainable Finance Taxonomy, smaller companies are increasingly being asked by customers to demonstrate their ESG performance.


This book is a very useful guidance for board members getting to grips with these increasingly important issues and the work of Helle Bank Jorgensen through Competent Boards is to be commended.


At ep group we are impact led and working hard to integrate consideration of all of our impacts into our decision making. Because we believe in long-term stewardship and the need to re-adjust the relationship of capital to companies as part of the move towards a new form of stakeholder capitalism and enterprise design, we are transitioning to steward ownership. We will certainly use this book in increasing our knowledge and skills.


Dr. Steven Fawkes


Managing Partner


ep group


6th June 2022

Thursday 9 June 2022

The title of this piece comes from a quote by Charles Suckling, who first synthesised halothane, an inhalational anaesthetic in 1951 while working at Imperial Chemical Industries. Charles Suckling went onto various senior roles in different ICI divisions before ending his career as General Manager Research and Technology at the company’s HQ in Millbank, working closely with the board.


He contributed greatly to the recognition of the importance of managing R&D and linking it to the business objectives. After ICI he served on the Royal Commission on Environmental Pollution for 10 years and worked part-time with the University of Stirling where I first encountered his work on R&D management while I was working on my PhD in the Technological Economic Research Unit.


The quote seems relevant to much of the discussion of decarbonization and net zero. We know what the overall objective is, transition to a net zero economy but there still seems to be an issue translating that society wide objective into objectives, and plans within individual companies or buildings. One contribution to this is down to lack of capacity i.e. knowing what to do, but a large part of it comes from excessive focus on the constraints. We know that decarbonization is difficult, but many things are. If we focus on constraints and forget the objective we will never get anywhere.


I have written before about leadership being the short resource and it really is. Leaders need to set the objectives and drive / help / cajole people to overcome the constraints. We see our role at ep group as building capacity and enabling leaders to be able to set clear, sensible decarbonisation objectives and then manage the process to achieve them.


The history of innovation has many cases of leaders focusing on the objectives and pushing through radical change; the Ford V8 engine, the first V8 light and cheap enough to be mass-produced is one example. Many engineers thought Ford was crazy. A more recent automotive example of course could be Tesla, Elon Musk’s focus on the objective and driven behaviour, which I imagine is not always pleasant to be around, has created Tesla, as well as Space-X.


Only by focusing on the objectives can we reach a net zero economy, constraints are always present.


Friday 4 March 2022

I launched ‘Only Eleven Percent’ in 2013 as an outlet to write on energy efficiency, energy services and financing energy efficiency, and share ideas and experience. Since then I have written about 200,000 words across some 200 blogs, mainly focused on energy efficiency and the problems of financing efficiency, but also touching on some of my other interests including management and leadership; innovation; broader sustainability issues including biodiversity; space travel; aviation; and Formula 1.  I have also found it a useful outlet to express myself on a few personal subjects including the death of a dear friend.


Over the Covid period I decided to put together some of the blogs into one volume in order to make them more accessible to both existing and new audiences. It is arranged by subject matter, although there is some overlap, and fully indexed.  It is designed to be dipped into rather than read from beginning to end. I hope that you find it useful and interesting.


It is now downloadable here: Only Eleven Percent Book 2013_2022 Vol One and on


As always I am happy to engage on any of the blogs or subjects they cover, and ep group continues to work on many of the topics covered.


I will continue to blog as and when I have something to say, so there may be a volume 2 someday.




Thursday 20 January 2022

The start of a new year is always a time of reflection and re-dedication. For me and ep group, 2022 is the year when we really start to multiply our impact in the areas that we care about.


When we consider what those areas are, we all think first about the obvious ones like climate change, the energy transition and the wider, urgent environmental problems such as the threat to biodiversity, all of which are pressing, critical problems.  The other area that is deeply important to us is the way that companies are run and managed, and the linkage between companies and the provision of capital. The dominant model of capitalism, with its emphasis on shareholder primacy, is undoubtedly one of the causes of the environmental problems we face. It is also a cause of problems, both at the social level such as extreme wealth inequality, and the level of individuals such as lack of purpose and sense of worth.


As with the solutions to environmental problems, the solutions to the problems of shareholder primacy capitalism are out there, they are just not widely distributed.  They are, however, growing fast. The rise of the B Corp movement, which we admire and support, is evidence of that.


And it is not just B Corps and other ‘alternatives’.  Blackrock’s Chief Executive Larry Fink recently wrote to CEOs of investee companies and amongst many other things said:


‘Putting your company’s purpose at the foundation of your relationships with your stakeholders is critical to long-term success’


‘we focus on sustainability not because we’re environmentalists, but because we are capitalists and fiduciaries to our clients’


‘our conviction at BlackRock is that companies perform better when they are deliberate about their role in society and act in the interests of their employees, customers, communities, and their shareholders’


Just over a year ago we decided to act on our beliefs around these issues and implement a form of ownership called steward-ownership, one that is not widely known but is more common than is generally appreciated. Steward-ownership is defined as follows:


The concept of “steward-ownership” harnesses the power of entrepreneurial for-profit enterprise while preserving a company’s essential purpose to create products and services that deliver societal value and protecting it from extractive capital.


Steward-ownership represents a viable alternative to shareholder-primacy ownership. In addressing fundamental structural deficiencies of our system, it retools the goals and incentives that guide decision making in companies in the corporate DNA. By doing so it has the power to transform the economy. Steward-owned companies are committed to two principles:


(1) Self-governance — Control remains inside the company with the people directly connected to stewarding its operation and mission. With the control of the company held in a trust, it can no longer be bought or sold


(2) Profits serve purpose — Wealth generated by these businesses cannot be privatized. Instead, profits serve the mission of the company, and are either reinvested in the company, stakeholders, or donated. Investors and founders are fairly compensated with capped returns/ dividends


What does this mean for ep group?


Firstly we are restructuring our various companies into a formal group and secondly we are re-writing the articles of the companies to reflect the principles of steward-ownership.  In parallel with those internal changes we are engaging with SMEs with services that support net zero and the regenerative economy, the kinds of companies that are the ‘picks and shovels’ of the transition, and who like the idea of coming together and building a larger steward-owned business rather than selling to extractive capital. Our intention is to bring these companies into the ep group through acquisition in a way that brings equitable rewards and balances a high degree of autonomy with support in key areas.  By aggregating these SMEs we can bring to SMEs the financial, impact reporting and marketing systems of a bigger company, as well as access to lower cost capital.  Furthermore there can be real synergies between the companies within the group.


In order to execute this strategy we are raising capital for the first time. The investors we want are impact driven investors who are committed to enabling the transition to a net zero and regenerative economy but also recognise that the structure of companies and their relationship to capital has to change.  If that description fits you and you are interested in joining us in this journey by investing please let me know and we will share more details.


Steward-ownership; ep group impact report


Tuesday 30 November 2021

In my third retrospective blog in recent months I wanted to mark the 20th anniversary of Enron’s collapse and draw some lessons for the transition to net zero.


I was only in Enron for the last 18 months of its existence but it was quite a ride.  When I first joined the London office it was a major shock as up until that point, I had largely worked for small organisations so walking onto what was the largest trading floor in Europe at the time was quite intimidating.  Truth be known I had no idea what was going on for the first few weeks at least! It was only when I got involved in developing a project covering a portfolio of several hundred buildings that I got fully engaged.  My experience in Strathclyde (see earlier blog) was helpful here, though in the end that particular project fell at the last hurdle.


Then the prospect of a project with the Guinness Park Royal brewery arrived which was perfect for me as I had spent most of my PhD working on energy efficiency in industry with a focus on brewing, malting and distilling, (it was tough being a student and visiting dozens of breweries and distilleries but someone had to do it).  The vision for the Guinness project was the purchase of all on-site utility plant and provision of all utilities on an ‘as a service’ basis, and after a long and complex development and negotiation process we were able to implement it, only for it to fall away a few months later when Enron went into administration. Fortunately I was able to save the deal and the team by pivoting it into RWE and we then repeated it twice more in Guinness breweries in 15 year term deals.  The Park Royal project turned the highly inefficient brewery to the best in class, reducing specific energy from 200 MJ/hl to 110 MJ/hl (the standard measurement in the UK brewing industry).


The innovative approaches pioneered by Enron included: bundling of energy supply and investment into infrastructure to reduce energy use and operational costs; right sizing of equipment of all types, risk assessment of energy efficiency measures, and aggregating loads for demand response.  The time has come to apply many of them at scale.  All of our legacy energy and utilities infrastructure, both in the energy grids and behind the meter in industry and buildings, is completely inappropriate for the new realities of climate change and the world of low-cost renewables, large-scale heat pumps, energy storage (power and thermal), flexibility and convergence of technologies.


Rather than tweak systems with marginal improvements we need to mobilize institutional capital in large-scale, multi-utility, integrated upgrades behind the meters of large industry and commerce. These kinds of investment can make the returns demanded by infrastructure investors, or better, and bring about significant reductions in emissions and multiple other benefits.  They will however require risk sharing in the development phase and in the long-term operation.


So what are the lessons from Enron?


  • Organisations need to think big – really get behind their net zero targets and go for radical change to infrastructure and go for portfolios not just individual sites. The time for tweaking around the edges and small-scale pilots is over. This requires leadership pushing for ambitious targets and not accepting the established solutions.
  • You need creative engineering and systems thinking – look for integration and right sizing opportunities and don’t just accept the standard solutions on offer from vendors and contractors.
  • Look at the entire energy cost picture. Energy costs are more than just the cost of energy itself, they include O&M costs, capital requirements, compliance costs as well as the often hidden costs on people, working environment etc. All the costs and all the benefits need to be considered in the business case which needs to be linked to the organisation’s strategic goals and commitment to emissions reduction.
  • Think long-term, these are long-term investments and need long deals, 10 or 15 years with the risks that entails. Net zero targets help here – aim for projects that meet or exceed 2030 and even 2040 targets as infrastructure installed in the next couple of years is likely to be still around at least into the 2030s.


What would an Enron-esque organisation be doing today for large corporates?  It would be a bespoke service company using a standardised process, and technical solutions would likely include offsite PV with private wires, energy storage, hybrid and integrated power and thermal systems, potentially becoming an energy hub for the neighbourhood, right-sizing, provision of grid services, and lots of connectivity and data providing carbon and wider impact reporting.  It would also have ready access to institutional, infrastructure type capital and packages of behind the meter utility infrastructure, beyond just roof-top solar and batteries, a potential new asset class for investors keen to invest in ways that support the transition to net zero. Finally of course it would need sound accounting practices, a lot more humility and a purpose / impact driven corporate culture.


We are starting to see more organizations look for this kind of service and growing interest from investors. Individual suppliers and contractors can provide parts of the solution but the missing pieces are often the development skills and risk capital, and the ability to integrate and stand behind the risks.


At ep group, if you want to explore these kinds of solutions we’d be happy to talk about our approach to enabling them and how we can assist.  For more information please go to: or you can contact us here.


We look forward to starting the conversation.


Dr Steven Fawkes

Welcome to my blog on energy efficiency and energy efficiency financing. The first question people ask is why my blog is called 'only eleven percent' - the answer is here. I look forward to engaging with you!

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