Energy Efficiency - August 6, 2018 - By Dominic Barbato
Six steps to efficient sustainability
Energy and sustainability are inherently linked. When businesses work toward improving energy efficiency, they can save on both consumption and costs while decreasing their environmental impact. In fact, the International Energy Agency reports that efficiency programs are one of the best ways to support climate change initiatives and reduce CO2 emissions.
Along with shrinking carbon footprints, integrated efficiency and sustainability efforts have a compounding effect, improving business productivity and providing a greater return on investment. But operating these initiatives in tandem comes with its own set of complexities, especially for businesses with facilities across the globe.
Organizations with global, regional and local teams should anticipate — and plan for — the silo-breaking challenges they will encounter before reaching "efficient sustainability." (Companies with a smaller footprint often encounter similar-but-less-acute obstacles.)
For example, nearly half of the 236 professionals who participated in the recent State of Corporate Energy & Sustainability Programs survey said that lack of coordinated project and strategic planning is one of their largest concerns. But to realize the value of the efficiency-sustainability combination, businesses must collaborate across all parts of an organization and recognize that barriers must come down to create unified, holistic programs.
Here is a six-step approach designed to break down outdated, compartmentalized structures and encourage more collaboration from end-to-end:
- Build a joint governance plan. Every sustainability plan should start with a strategic vision that is communicated throughout an organization. True partnership with a shared vision begins with understanding the correlation between efficiency and sustainability goals, and overall corporate goals. In addition, it’s important to proactively address the difficulty of working across geographies and departments. Some ways to avoid this challenge include appointing strong global process owners who make it their priority to drive collaboration and involving local operation leaders to support the initial plan. These leaders will be tasked with motivating teams to aspire to smart energy and resource use as a company standard.
- Define common and meaningful targets and KPIs. Tracking and reporting should be kept as simple as possible, with four or five KPIs that describe energy and sustainability performance in a sufficient way. It should be noted that calculating total energy use isn’t enough. Consumption must be normalized based on influencing factors such as production, occupant loads, weather and more, and should be tracked as such.
- Incentivize cross-functional staff to work as a team. Once the company-wide targets and KPIs have been decided, it is imperative to assign clear roles and responsibilities, and implement an incentive program that rewards joint progress. Embedding efficiency and sustainability goals into reviews and bonuses, and/or adopting a scorecard to create friendly internal competition are some examples of incentivizing collaboration. Employees should also be encouraged to share best practices and celebrate successes to keep engagement and motivation high. This is where the local operation leader’s role is especially critical to inspire change.
- Implement a single source of data. Global teams should eliminate the data inconsistencies they see across different departments and geographies, such as different currencies, metrics, and units of measure. Global data needs to be concise, consistent and accessible, collected from all facilities, and standardized so it accurately assesses both gains and losses.
- Establish a joint budget for efficiency and sustainability initiatives. A holistic investment strategy that connects efficiency and sustainability initiatives is vital to strategic planning and performance evaluations. Project managers should use a global opportunity matrix to map out project investments, savings, and payback spanning over multiple years to identify funding gaps and bottlenecks that may slow performance. Using easy-to-deploy efficiency measure with quick paybacks can provide capital for projects that come with a larger price tag but deliver long-term value. Companies can also reinvest efficiency savings into onsite renewables, offering immediate progress toward greenhouse gas reduction goals.
- Increase transparency internally and externally. Internal and external communications hold equal value when reporting on sustainability initiatives. Most organizations have external reporting for outside stakeholders down to a science, but there is equal importance for employees to have the same understanding of how these initiatives affect their functions. Business leaders should use their most trusted employees to act as ambassadors for energy conservations and sustainability. Their role is a critical factor in employee engagement, which has lasting impact on the brand, recruitment and business development.
While there may be a few hurdles to overcome in the early stages of planning joint efficiency and sustainability initiatives, better collaboration will fast-track a business toward reduced costs, improved productivity and sustainable operations. The agility and flexibility to strip down silos and coordinate activities will unlock greater opportunities for a more resilient business.
Dominic Barbato leads global strategy for Schneider Electric Energy and Sustainability Services and is responsible for the business’ vision, innovation and growth opportunities. Prior to his current career, Dominic was part of Deloitte’s energy advisory practice, as well as a founding member of a cogeneration-focused startup. He is a certified Project Management Professional and holds an MBA from Indiana University’s Kelley School of Business.