Commercial, Demand Management, Energy Efficiency, GHG Emissions - February 15, 2016 - By Liz Delaney
Top-down AND bottom-up: How companies can use multiple approaches to improve energy management
Companies today employ a wide array of energy reduction strategies, including energy efficiency, renewable energy and the utilization of data management systems. But how can companies simultaneously improve these distinct facets of energy management and ultimately scale them? Increasingly, companies that show excellence in comprehensive, strategic energy management are able to employ both top-down and bottom-up management approaches, and infuse data into all levels of their work. This approach to driving progress has proven successful in many corporate energy management programs and is responsible for an increasing number of gains in the space over the last few years.
When it comes to energy efficiency, companies often take a bottom-up approach to establishing their programs. Despite being a clear win-win for a company’s bottom line and the environment, energy efficiency is fraught with challenges that make implementation at scale challenging. It is highly technical in nature, has dispersed ownership among many stakeholders, often relies on large capital outlays, and is generally considered outside the core business of most companies. Because of these barriers and others, energy managers often have to demonstrate the value of energy efficiency projects through small initiatives before receiving the support necessary to scale up their work. While this approach may be frustrating to energy managers who innately understand the potential of their projects to generate large-scale reductions, time and time again it has proven to be an effective catalyst for increased energy efficiency adoption down the road.
AT&T is an example of a company that has built year-upon-year progress into a vibrant and robust energy management program that now operates at scale. The types of lighting projects that the company investigated in 2010 were far simpler than the larger, more comprehensive energy and water work they were doing just a few years later, and their bottom-up successes have paved the way for the establishment of public greenhouse gas reduction goals . Many companies like AT&T have leveraged their small-scale successes to inspire executives to set organization-wide goals, enabling them to scale energy efficiency across their entire operations.
Renewables projects, in contrast, have typically gotten their start at the top of an organization. Goals set at the executive level have sent signals to sustainability and energy managers to identify ways to generate or procure clean energy. The competitive spirit amongst company leaders has also inspired many others to set their own renewables goals (e.g. RE100), often leaving staff on the ground scrambling to get projects and plans in place. The barriers to deploying renewable energy are quite different than the ones faced by energy efficiency. Here, regional variation in energy markets and regulations, as well as unfamiliarity with new financing models and financial transactions make it tough for companies to gradually integrate renewables into their energy mixes. The power of executive-level goals and engagement has helped many companies overcome these sizable barriers.
Nestlé Waters has done a good job capitalizing on the momentum generated by corporate renewable energy goals to explore large- scale virtual power purchase agreements. Their work responding to the top-down goal will lock in sizable amounts of clean, renewable power for their company for years to come. And, as the cost of on-site renewable generation increasingly becomes competitive with fossil fuels, it opens the door for Nestlé Waters and other Nestlé subsidiaries to investigate smaller, grassroots projects that could eventually scale, potentially reducing even more corporate emissions.
This conversation would be incomplete without a mention of the power of data to drive strategic energy management by connecting the dots between upper and lower levels of management. At all levels of operations, data can be used to optimize operations, inform decision making, and facilitate conversations between different stakeholders. Sustainability managers have increasingly found themselves playing the role of data interpreter, whether it is rolling up building energy consumption into high-level progress reports, or breaking down executive level goals into site-specific energy reduction targets. Data management tools provide constructive ways to bridge the gaps between the top and the bottom of an organization, and drive improvement at all levels.
Starwood Hotels has been able to successfully leverage data-driven tools to translate executive-level sustainability and energy goals into dispersed action on the ground. Their performance measurement tool for displaying energy and water use engages their franchises in conservation measures, enabling each property around the world to understand its unique footprint, take steps towards reducing its consumption, and help meet their aggressive corporate goals.
It’s clear that energy management programs take different shapes and forms depending upon the company, the initiative, and the management approach. While energy efficiency projects often begin with smaller, grassroots initiatives, renewables projects often find their start in executive goals and top-down management. However, there are great rewards for those that combine both the top-down and bottom-up approaches to realize more rapid and comprehensive energy management improvements, and often the key to achieving this can come through leveraging the power of data. By employing multiple management approaches, leaders can ensure that the solutions fit the problems, and successfully move their energy initiatives forward, saving money and helping the environment at the same time.
Liz Delaney is the program director for EDF Climate Corps, a program that embeds trained graduate students in organizations to help meet their energy goals by accelerating clean energy projects in their facilities. By working with more than 350 organizations, Climate Corps has uncovered nearly $1.5 billion in energy savings — simultaneously improving the organization’s bottom line and environmental impact.
Twitter: @lizdelaneylobo, @EDFBiz