Every operation has slightly different business priorities. Things like production, cost cutting or dealing with capital constraints. The key thing you can do is to identify those priorities and then start to mould the business case for your project around them. If you can do that you are half way there because you can have people interested in working with you and not against you.
- Bryan Williams - Principal Advisor Climate Change & Energy Efficiency, Newmont Asia Pacific
Energy efficiency can deliver significant energy savings and other business benefits. However, if the benefits are not clearly communicated and well understood, then you may find it hard to get the support that you need. Managers deal with many competing priorities and may not want to see time and effort put into projects that don’t deliver on current business priorities.
In this section
- Drivers of energy efficiency
- Tips for aligning with business priorities
- Tools and resources you might find useful
- Case studies that you might find helpful
Drivers of energy efficiency
In June/July 2010 80 interviews were conducted with senior managers of organisations across a range of industries (Ogilvy Earth, 2010). This report was commissioned by the Department of Resources, Energy and Tourism. It was aimed specifically at senior level executives (so called “C-level” executives) to gain their perspectives on the drivers for energy efficiency, the profile of energy efficiency issues within corporations and the best forum to engage C-level executives in energy efficiency.
‘Financial/cost management’ was the issue most likely to be identified by senior managers as playing a ‘very important’ role in their business’s efforts to improve energy efficiency (68%). This was followed by the interest of their boards (61%), the policy agenda of government and regulators (state and federal) (53%) and brand reputation (51%).
Figure 2.2 summarises their responses to a question about the role of business drivers for energy efficiency.
Although the research did not cover an exhaustive list of possible business drivers for energy efficiency it does highlight the importance of being aware of the business drivers that are specific to your organisation. Financial and cost management is essential, but in many organisations the interests of the board, the government policy agenda and brand reputation may be just as important.
When you are developing your business case proposal take the time to understand the needs of your site/organisation and the issues that might influence interest in energy efficiency. These might include energy efficiency’s influence on:
- the energy profile of the site (where is most energy used) and the extent to which your project will contribute to overall reduction
- energy contracts and whether there are additional financial benefits achieved through energy efficiency such as reducing peak load electricity
- the availability of capital
- the extent to which the site has operational or financial control over energy
- safety records and targets since some energy efficiency projects can also deliver safety benefits
- Customer, investor or employee expectations regarding energy and greenhouse performance
- Legislative requirements
- Local community concerns
- Maintenance, reliability or other operational issues.
Tips for aligning with business priorities
Opportunities to align energy efficiency projects with current business priorities:
- Align the project with other organisational goals, targets and programs – piggyback on whatever is ‘hot’ within the business right now
- It may be effective to use compliance requirements to bring a new focus on energy efficiency
- Solve an existing problem through an energy efficiency project, e.g. identify opportunities that will increase production throughput as well as deliver an energy saving
- Develop your business case for low and no-cost initiatives when capital is difficult to access and there is a focus on cost savings
- Use a site expansion project to ‘design in’ energy efficiency
- Look for the most efficient options when procuring new equipment
- Research energy efficient equipment prior to equipment breakdown
- Implement projects during maintenance shut-downs
- Build energy efficiency into practices and procedures, e.g. for operation, maintenance or staff remuneration
- Attach an energy efficiency project to another project. For example, if equipment is due for replacement then this may be the main focus of the business case proposal with the energy efficiency outcomes acting as a co-benefit
- Review existing business plans and priorities and discuss your organisation’s energy and/or greenhouse policy with the personnel involved in developing the policy to better understand the priorities and associated strategies
Tools and resources you might find useful
- Talk to the people who might be involved in or influence development of the project. Find out what is important to them. You can conduct a Stakeholder analysis using this worksheet to identify the key people that you should talk to.
- Work through the Energy efficiency benefits checklist to identify ways in which you might communicate the links between your project and existing business priorities.
- If there has been a presentation to site or corporate management on the strategic business case for energy efficiency then get hold of the presentation or run one yourself – refer to the section Regularly brief management on energy-related risks and opportunities
Case studies that you might find helpful
Highlighting the role that energy metering could play in reducing production downtime was an important factor in justifying investment in this $600,000 metering project.
The business case for this project highlighted its contribution to achieving the company’s energy efficiency target and reduced carbon footprint.
The sustainability manager used a non-quantitative measure (‘decline’, ‘maintain’ or ‘improve’) to show how each option for an upgrade of 530 Collins Street related to business priorities.