For the modern enterprise, energy is more than a cost to be managed.
With global warming, climate regulations, rapidly dwindling natural resources, and growing social expectations for eco-conscious corporate values and policies, energy is making its way to the c-suite. By viewing energy management as a strategic initiative with the power to mitigate risk, increase value, generate branding benefits, and lessen the environmental impact of their usage and carbon emissions, companies can differentiate themselves in the marketplace and become more appealing to both consumers and investors.
As businesses come to terms with the growing importance of energy, they’re adjusting their corporate strategies accordingly. PWC surveyed leading commercial and industrial companies headquartered in the U.S. and found that 72% are actively pursuing new renewable energy purchases because they want to reduce their emissions (85%), generate an attractive ROI (76%), and limit the risks associated with energy price variability (59%).
Clearly, corporate energy is becoming a top priority in the enterprise. As such, companies in all industries – and especially those with large energy footprints – are advised to adopt a c-suite strategy for energy management built around the following key pillars:
1. Establish energy management as a central c-suite priority.
If energy is to receive the attention it demands to make an impact, its importance needs to be communicated from the top down. That will require the CEO establishing energy management as one of the company’s central priorities, and putting the COO, CFO, or another executive in charge of developing strategy and driving its execution.
2. Embrace renewables and other alternative technologies.
Advancements in technology combined with government incentives have caused the cost of clean energy to plummet. For example, the cost of LED lights, solar energy, wind energy, and the batteries that support intermittent renewables have dropped in recent years, making these technologies more affordable than ever.
This is important, because alternative energy technologies can deliver immense benefits to the enterprise – preparing them for future regulations, allowing them to maintain operations in the event of a power outage, and improving their image as an eco-conscious brand (for CRE, this includes attracting tenants and commanding higher rent). As such, any corporate energy management strategy should include a mandate to take advantage of every opportunity to embrace renewables and alternative energy sources.
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3. Use risk and opportunity to compose an effective strategy.
The enterprise’s energy management strategy should be based on the risks and opportunities associated with their sourcing and consumption. This will require a holistic understanding of what energy is currently costing the company, and what improvements will likely occur with change. To that end, when developing an energy management strategy, enterprises should consider how they can:
- Quantify and reduce variable energy costs.
- Adjust energy costs to increase value and lower prices.
- Improve their use of renewable energy sources.
- Reduce their carbon footprint.
- Work with suppliers that demonstrate a commitment to eco-conscious practices.
- Integrate energy strategy into the company’s vision and operations.
- Create a public plan to meet aggressive emissions and energy usage targets.
Once the strategy is created, executives will need to get employees on board. Establishing targets and incentives will ensure that the company meets its goals, while communicating the corporation’s priorities and commitment to investors and the public.