Reduce climate change pressures and business costs by focusing on energy efficiencies

This Article was posted on 17.05.11 in Growth and Managing

Most people are aware of climate change and the impact it could have on our lives. Using cleaner, renewable energy sources is a much touted solution supported by our Emissions Trading Scheme, as is the need to adapt and respond to the challenges presented by changing climatic conditions – but the need to use energy more efficiently is often overlooked.

The role of energy efficiencies

The quickest and easiest way to reduce carbon emissions is to make our appliances, cars, office and other buildings more energy efficient.

What is energy efficiency?

Energy efficiency aims to produce the same output using less energy and is a simple way to reduce the impact we have on the planet. If we’re more efficient in the energy we use, we can start to reduce our carbon footprint immediately. This efficiency also means your business makes more profit because you spend less on your energy bills.

Energy efficiency is seen as one of the primary ways to meet global climate change goals and the growing energy needs of an expanding world population. In addition, it is an immediately accessible option that is easy to implement, and has an added financial benefit of reducing overheads or input costs for businesses.

Does it really work?

The European Union (EU) improved its energy efficiency between 1990 and 2006 to achieve an average 40% reduction in final energy consumption per unit of Gross Domestic Product – an impressive contribution to energy saving and emission reductions.

The World Energy Council estimates that if the rest of the world had the same energy efficiency performance as the EU, we’d save a total of 420 million tonnes of oil equivalent in fuel, or 8.2 billion tonnes of carbon dioxide emissions, per year.

So yes, energy saving really does have the potential to reduce emissions and reduce input costs.

If energy efficiency is so easy and beneficial, why aren’t businesses being more proactive?

The relative ease of implementation and benefits are well known – enough for 70% of countries worldwide to have introduced energy efficiency targets and policies. But despite being known as climate change’s “low-hanging fruit”, the world has been slow to follow Europe’s example and put the efficiency theory into practice.

“Energy efficiency measures are still not being implemented at scale, indicating a significant opportunity is being missed,” says Roberto Bocca, the World Economic Forum’s (WEF’s) Head of Energy Industries. He notes that despite the widespread acknowledgment of the potential of energy efficiency, there are implementation challenges and barriers to overcome.

WEF research found that reasons for this ranged from market failures such as insufficient economic incentives to encourage efficient energy use, to institutional failures including a lack of common metrics and standards to enable the measurement and reporting of energy efficiency.

In addition, the pricing structure used by most power utilities is geared towards encouraging more use, not less, and fails to reward or encourage the use of energy efficiency or low-carbon technologies.

To effectively bring about change, the WEF says we need to scale-up the use of energy-efficient technologies, and remove institutional and regulatory barriers.

Introducing efficiencies in your business

Given that using energy more efficiently is clearly a win–win situation for both the environment and business, let’s look at how you can make your business more energy efficient.

Build an energy saving culture

Encourage your employees to save energy by building an energy saving culture in your company. Explain the importance of energy saving to your staff so that they can help to reduce climate change and improve business efficiencies too. Start with simple things and outline how they can save energy by:

  • Switching off lights in rooms that aren’t occupied and making sure lights and office equipment are switched off at night.
  • Driving more efficiently and planning delivery routes or other trips to make more efficient use of fuel. For example, by avoiding driving during rush hour, reducing the number of trips made, and planning the most efficient route to all the places you need to drive to.
  • Buying energy-efficient options, such as energy saving light bulbs and rechargeable batteries.
  • Putting up a suggestion box so that your staff can contribute ideas. Consider rewarding good ideas by giving recognition or a token gift.

Monitor your various energy bills, such as your power and fuel bills, and report back on these so that staff can see how their efforts are reducing costs. Explore ways of reporting efficiencies to keep staff motivated. You can use this information to report back to your customers too.

Encourage energy saving champions

If you have staff who are knowledgeable about energy saving, or employees who are keen to learn more, encourage them to become energy saving champions. They can make useful suggestions and motivate other staff to become more actively involved.

Consider energy-efficient buildings

The next time you expand or relocate, consider renting or investing in an energy-efficient building – or look for ways to increase the energy efficiency of your existing building. Can you make more use of natural light, or open doors and windows to reduce the amount of cooling your premises needs? Can you improve the insulation to reduce your heating bill in winter?

Support energy efficiency in your purchasing decisions

In much the same way as you need to encourage a culture of energy saving in your staff, you should look to do the same with your suppliers. This reduces the overall carbon footprint of your products or services and encourages a wider acceptance of the important role energy efficiency has to play.

If, for example, a restaurant can get similar produce from two different suppliers at a competitive price, but one is locally produced and one is transported half way across New Zealand, or half way across the world, the restaurant should buy from the local supplier unless there is another compelling financial or energy-saving benefit to buying from a more distant supplier.

Look for technologies that will allow you to work smarter

Keep up-to-date with technological developments and keep a look out for technologies that allow you to work more efficiently. It might not be economically viable for a factory to retool to take advantage of new technologies as they become available. However, by staying abreast of developments, you’ll be able to introduce the efficiencies that are economically viable in the short-term, and develop longer-term plans to convert your operation to take advantage of the gains for both the environment and your bottom line that energy efficiencies can present.

Keep up-to-date with developments

Apart from keeping up with technology, you should also keep up-to-date with any proposals or changes to laws and standard accounting practices. In the longer term, businesses might be required to achieve certain energy efficiencies or report on these. Even if it does not become a legal requirement, finding a way to measure and report on your energy efficiencies and reduction in carbon footprint can be used to market your business to customers who are environmentally conscious.

Next Steps

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