Communication skills crucial for energy managers to deliver efficiency programmes, say experts
Advances in technology have created a viable and economic business case for companies to implement energy efficiency programmes, but those programmes will only be successfully delivered if the business benefits are effectively translated to the boardroom and staff.
That was the overarching view of a group of energy experts from telecoms firm BT, retailer Marks & Spencer (M&S), property company Land Securities and high-tech polymer producer Covestro, who convened in London on Monday (21 November) to provide a cross-sector insight into energy management at an event hosted by The Crowd.
The panel agreed that low-carbon technology has accelerated to the point where energy efficiency projects no longer require long pay-back periods, but that the message about the myriad benefits these projects can bring isn’t being relayed to boardrooms often enough.
“Payback times are going down so dramatically as new technologies come to the floor, but at a senior level there is still the perception that this costs quite a bit more than it actually does,” Land Securities’ head of sustainability Caroline Hill told delegates at the XEnergy event.
“We joined the RE100 renewable energy scheme last year, but there’s still a perception that sourcing your energy from renewables must be very expensive. In our experience, that change had a less than 1% effect on our costs.”
Hill told delegates that Land Securities’ recent energy efficiency work with engineering company NG Bailey on six London buildings had not only reduced energy use by 9% across that particular portfolio, but has done so in a “cost-neutral” manner for Land Securities’ customers.
The rest of the panel agreed that payback times for energy efficiency programmes have been shrinking, and that persuading senior board members such as the chief financial officer (CFO) to invest in energy efficiency requires a certain tact.
BT’s head of energy and environment Scott Balloch explained that conversations with CFOs regarding core business strategies that revolve around sustainability still ultimately entail a financial aspect.
“Something a CFO wants to do less than spend money is waste money,” Balloch said. “At the heart of our business strategy is making the world a better place, but when you talk to the CFO that’s not the pitch that you go in with. I show them rising energy costs and models that show that our underlying growth is not delivering energy savings.”
According to Balloch, BT – which recently secured top spot among the FTSE 100 for carbon management – has taken around £220m of annualised costs out of the business because of energy efficiency improvements – a feat that has been highlighted in order to resonate with the board. BT has utilised a range of energy efficiency improvements, from water-based cooling systems to integrated “smart” monitoring systems, Balloch said.
The panel discussion went onto focus on the evolution of ‘smart’ energy systems – ranging from Internet of Things (IoT) through to Google’s use of Artificial Intelligence – and the rapid development of technology in general, which has driven down installation costs for businesses.
M&S is one company that has been at the forefront of energy efficiency for some time. Since 2012, the company has sourced 100% of its energy for its UK and Ireland facilities from renewable sources, but for M&S’s head of Plan A and facilities management Munish Datta, technology has been redefined in terms of affordability.
“You need to make sure you’ve got some robust information at hand, and you have to take evidence-based savings to your CFO,” Datta said. “10 years on from when we introduced efficiency measures, people still use the language of ‘low-hanging fruit’, but I’d actually say that the fruit is getting heavier and the tree is leaning further down. It’s easier to pluck. It just might not be the same things you were picking seven or eight years ago.”
M&S wants to build on “the most comprehensive, wide-ranging sustainability plan in retail” by fitting out its entire UK estate with LED lighting by 2025. However, Datta noted that it is easy to get “seduced” by some low-carbon technologies but companies will still need the right workforce in order to enhance efficiencies further. He suggested that around 25-30% of the benefit that M&S sees from its efficiency deployments could be accounted to “training people to use them properly”.
The panel unanimously agreed with Datta’s point. Hill revealed that Land Securities has spent much of 2016 engaging its entire workforce on entry level sustainability training, which she claimed was “critical” to making a step change in energy efficiency. For Balloch, meanwhile, the rise of the IoT and ‘big data’ has meant that BT will have to evaluate the types of skillsets that will be necessary for staff in the future. While Balloch claimed that traditional roles will still be valuable, those with a “more data centric” approach could become core workers in the business.
For Covestro’s chief sustainability officer Richard Northcote, a rollout of new, ambitious energy management targets has created an air of uncertainty as to how the company will improve on an already impressive track-record. Covestro became the first European country to sign-up to the EP100 – aimed at accelerating the transition to a clean economy – pledging to halve its energy consumption by 2030.
While Northcote wasn’t sure how the company would reach this goal, Covestro has had to reset CO2 reduction targets for 2020 three times since 2005 due to hitting the goal early. With a 50% CO2 reduction now in place for 2025, Northcote noted that technological advancements and engaging staff on sustainability had been catalysed by an enabling environment – largely driven by the United Nation’s Sustainable Development Goals (SDGs).
“I sat watching the SDGs being unveiled in New York, and what struck me was that this company touches 13 of those 17 goals in our day-to-day operations,” Northcote said. “All of a sudden, it became very apparent that this set of constraints and issues were going to be the growth markets of the future.
“The whole opportunity being thrown at us today by a low-carbon economy and SDGs is a fantastic place if companies can really focus their attentions and drive their businesses to address new challenges.
“The EP100 is a target that we don’t know how we are going to achieve – which is how all targets should be. It’s a scary target but it really does drive the energy efficiency agenda and it keeps our mechanical engineers on their toes.”
edie’s sustainability skills month and workshop
The month of November sees edie shift the editorial spotlight from green building to sustainability skills, ahead of the edie Skills Workshop on 30 November in London (find out more and register to attend here).
From presentation skills and building the business case to the power of influence and persuasion, this month of exclusive videos, features and podcasts will pro-actively address the sustainability skills gaps and lay the foundations for businesses to take the next steps in their sustainability journey.