Energy efficiency: The Cinderella of corporate net-zero ambitions?

We are now nearly two years into the Climate Decade, in which we must halve emissions by 2030. Corporates and policymakers are setting net-zero goals at a pace which some argue, as outlined in Oxfam’s recent report, lack any real substance – amounting to little more than greenwashing.

We at Climate Group are working to accelerate climate action among 300 multinational businesses across every major sector. With COP26 on the horizon, and the release of the landmark IPCC report, it is clear that we must act now to avoid the worst impacts of climate change. Leaders and policymakers must urgently align ambitious talk with financial backing, innovation, and action.

Yet what continues to be missing from the conversation – a less glamorous but arguably central factor in decarbonising our global economy – is energy efficiency. Any meaningful and credible decarbonisation strategy must have smart energy use as its foundation. This is because there are not enough resources in the world for everyone to solely switch to renewables or rely on carbon capture technologies. These are not going to be enough.  

Energy efficiency is the low hanging fruit

Energy efficiency improvements can deliver over 40% of the reduction in energy-related greenhouse gas emissions that is needed over the next two decades to meet climate goals, according to the International Energy Agency (IEA). Yet global progress on energy efficiency has continued to slow this year due to the economic impacts of Covid-19.

Short-term trends resulting from the pandemic are slowing progress in energy productivity, meaning that every unit of economic output uses more energy than it would do otherwise.

Many opportunities remain untapped. Through EP100, a global initiative run by Climate Group, over 120 energy smart businesses are showing their leadership in this area and taking energy efficiency from the boiler room to the boardroom.

By integrating ambitious energy targets into business strategy, leading companies are driving innovation in energy efficiency and increasing competitiveness while delivering on emissions reduction goals.

Hybrid working offers ample opportunity

Whilst Covid-19 has been detrimental in many ways, it has also provided the world with an opportunity. Buildings account for up to one-third of global energy emissions, according to IEA, and are therefore a vital part of achieving net-zero by 2050.

Hybrid working is a trend that looks set to stay. This means that many parts of office buildings will not be used at full capacity, whilst homes and other spaces will be used more readily. As employees begin to return to the workplace, companies must look at how they can make their offices and workspaces more energy efficient.

Smart energy measures don’t have to cost the earth. They often come with rapid rates of return on investment and significant financial rewards. The EP100 Progress and Insights Report 2020 found that 21 members of the EP100 initiative, including H&M, Hilton and UltraTech Cement, had collectively saved £93 million, capital that can be reinvested in clean growth.

Aside from the positive impact on the bottom line, doing more with less energy has multiple benefits including increased productivity, employee wellness and increasing investments in energy efficiency technologies and digitalisation.

With only eight years left to halve global emissions, it’s vital that we now step up our efforts and drive more organisations to get on board and set an energy productivity target.