For many professionals tasked with improving an organization’s environmental performance, the link between wider business profitability and energy efficiency or sustainability is not obvious. Even in the finance department, there may be some awareness of how much the company is spending on energy; however, its potential impact on longer-term business risk may be misunderstood. Siloed decision-making on energy and sustainability projects can result in missed opportunities. Many companies enact initiatives like site audits, efficiency projects or purchase of renewable energy at site or country level, but there is much to be gained when companies take a portfolio approach.
Identifying the most financially competitive energy efficiency and sustainability projects without discussing a wider, long-term energy management plan makes it harder to get programs off the ground. According to a YouGov survey of 760 managers in the UK, the majority of board-level teams do not know what energy is spent on or who is even responsible for its management within the company.
A gap exists between day-to-day activities and how they fit into long-term goals. It’s up to energy and sustainability professionals to contextualize and demonstrate a strategic portfolio approach when creating a business proposal for energy efficiency or sustainability projects. Taking a portfolio approach means looking holistically at all possible opportunities, assessing which will best fit the organization’s broader strategy and then implementing energy efficiency alongside other mechanisms. A global approach to energy and sustainability allows companies to take advantage of the variety of technologies, incentives, and regulatory structures available as these differ widely and are rapidly changing.
Without a clear strategy, even if an investment is cost-competitive with other projects, it still might not get the sign-off when considered as a standalone project due to business priorities. It is for this reason that energy and sustainability topics should be–and are increasingly so–discussed in tandem at a strategic portfolio level rather than project-specific level. Energy and sustainability professionals must work together to demonstrate how an energy efficiency or sustainability program aligns with business aspirations–not just now, but for long-term competitiveness.
A leading medical device manufacturer and Schneider Electric client is a good example of how powerful it can be to align teams along a strategic portfolio approach and share information across organizational silos. After collecting all data on a single platform, the sustainability, energy management and procurement teams at this company were able to holistically look at opportunities for meeting goals. They also improved energy efficiency goals, which led to installation of efficient lighting across all facilities and a reduction in electricity use. All of this data automatically feeds itself into reporting efforts, combing key environmental metrics collected globally to CDP.
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Contributed by: Tom Bardwell, Sustainability Consultant, Schneider Electric Energy & Sustainability Services