Adapting to the shifting energy landscape resulting from COVID-19 and the economic instability it has left behind presents difficult questions for today’s energy and sustainability leaders: How can a global business find a right-sized approach to meet long-range sustainability goals when resources are constrained? How can these investments become a lever—versus a cost-center – for profit and low-carbon growth? How can we move fast in this uncertain environment?
Change, including the type of disruptive change posed by COVID-19, is only accelerating and it’s no longer the fittest companies that survive; it’s the most responsive and resilient. When it comes to meeting sustainability goals during a period of disruption, that response must be holistic and enterprise-wide to fully take advantage of the opportunities that change presents.
A Plan is Not Enough
Take, for example, one global automotive manufacturer. Despite global targets, the company was struggling to drive consistent energy and carbon reduction across its 74 facilities in 19 countries. Global policies were being ignored or inconsistently enacted, and there was limited collaboration and accountability among sites. No one was driving the effort to align and improve efficiency, and there was no way to share knowledge of what was working. Consequently, sites were missing targets and experiencing long deployment cycles.
Why does this happen?
Most sites have significant independence when it comes to energy management and sustainability initiatives, including their own budget. This independence can produce results at the local level, but rarely is enough to reach corporate ambitions. Corporate leaders recognize the importance of site buy-in, but size and complexity of many organizations, especially across a heterogeneous site profile, make this difficult in practice, and even more difficult during disruption.
Particularly when resources are tight and in a state of flux, it’s not uncommon for local management to defer maintenance or deprioritize resource conservation measures over other business priorities. And, when energy or CO2 reduction is not made part of core business strategy and metrics, investing in solutions like onsite renewables or resource conservation measures become conflicting priorities. This is exacerbated in a period of economic uncertainty.
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Inconsistent technological capabilities and lack of expertise across sites can also widen the sustainability performance gap. Energy and sustainability teams need access to both facility- and portfolio-level data. Data such as how much energy is consumed, from what source, and at what price, can be used to find improvement opportunities, set goals, and internally or externally report progress and key indicators.
As organizations plan their recovery from the COVID-19 pandemic, many will be looking for the means to build back in a more resilient way. Now is an ideal time to invest in scenario planning for future disruption, while exploring enterprise-wide data solutions like Resource Advisor™.
Think globally, act locally
Key stakeholders, from top floor to shop floor, must be aligned and committed to achieving sustainability goals for them to succeed. This can be especially challenging in a time of economic constraint or uncertainty, when literally keeping the lights on may be of utmost importance.
The organizational coordination required during the COVID-19 recovery period can afford business the opportunity to develop institutional alignment to keep moving forward on its sustainability goals. This means assessing the hurdles and obstacles for success at the ground level, designing the right collaboration and governance structures to ensure progress is recognized and rewarded at all levels, and showing site-level stakeholders how those efforts tie into core business goals. This alignment can help drive success; BlackRock found that during the recent market downturn, sustainable indices outperformed their market peers.
For the automotive manufacturer mentioned above, this took form of energy efficiency workshops at six sites, along with a renewable energy analysis to identify PPA and self-generation opportunities. In a matter of months, the company was able to identify up to 20 percent in energy savings—equal to $4 million—on multiple projects with just two-year paybacks. Along the way, the team secured site buy-in on performance targets that would allow the company to meet their public sustainability commitments on time.
Putting sustainability benefits into bottom-line language can have a huge impact on site-level buy-in and driving consistent performance over the long run. Rather than talking about watts saved or metric tons reduced, focusing on cash flow benefits from energy savings can perk up the ears of executives looking for wins, especially when resources are constrained, and reputations are on the line.
Learnings from early pilots can also be industrialized at the enterprise-level to drive performance at scale. This builds resiliency into a corporate sustainability program so it can weather disruptive changes in the business or energy markets, allowing these investments to translate into long-term growth for the organization.
While COVID-19 is one of the most extraordinary disruptions businesses have faced, it certainly won’t be the last. Now is the time to consider your organization’s long-term strategy for future resilience. For more stories on managing energy and sustainability performance in times of disruption, download this ebook.