The Corporate Energy Efficiency Project was launched by the Pew Center on Global Climate Change with generous funding from Toyota. Particular emphasis is given to management approaches that companies have implemented to improve their energy performance across five categories: Internal Operations; Buildings; Supply Chains; Products and Services; and Cross-cutting Issues.
Project activities include a survey on corporate energy efficiency strategies, workshops, a comprehensive report, major conference, and a web portal to continuously inform on corporate energy efficiency strategies. To help guide the overall research effort, the Pew Center assembled an 11-member expert advisory committee.
With unprecedented energy price volatility and looming climate regulations, businesses face a new and complex energy paradigm that few are fully prepared to manage. While individual approaches will vary by sector and company, new research from the Pew Center on Global Climate Change shows a growing number of companies recognize that energy efficiency must form the backbone of any corporate strategy to address the new energy frontier. Properly executed, a robust corporate energy efficiency strategy can reduce costs, manage risks, ease environmental compliance, boost employee morale, and open doors to greater innovation and productivity. Most of these benefits have been well understood for some time, yet energy efficiency performance continues to be highly uneven throughout the corporate community. In short, some companies clearly outclass others when it comes to energy management.
Over the last 14 months, the Pew Center has closely studied leading companies to try to identify key attributes that separate the most efficient companies from the rest of the pack. The research effort aims to document best practices in internal operations, the supply chain, products and services, and cross-cutting issues that can be emulated by other companies seeking to develop new and stronger efficiency strategies.
While analysis of the information generated by these various streams continues, some preliminary insights, drawn primarily from the survey, include: • Firms recognize the energy paradigm is changing rapidly. Over 50 percent of the survey respondents expect energy prices will exceed the equivalent of $100 per barrel of oil by 2014. Additionally, almost all respondents project that Congress will soon pass national climate legislation that mandates carbon reductions; 57 percent believe such legislation will pass before 2010. • Companies are responding by establishing corporate-wide energy efficiency targets. Voluntary goals have proliferated over the last decade, and while different companies use different metrics and timelines, the average target among our sample was an annual 2.2 percent improvement in energy intensity. Primary motivations for pursuing efficiency strategies were somewhat split between environmental concerns and cost control reasons, although many companies cited both drivers. • Senior management support is critical in the development and implementation of energy efficiency programs. The CEO and senior management team were most frequently identified as the key champions of corporate efficiency programs, ranking higher than facility managers, and environmental health and safety staff. • The most common challenge companies face in pursuing efficiency gains are resource constraints, especially limits on capital. Companies have overcome this hurdle by focusing on low-cost operational improvements, and in some cases, giving privileged status to energy efficiency investments. Examples include setting aside special pools of capital, relaxing payback requirements for projects that accomplish sustainability goals, and factoring in some of the less tangible co-benefits of energy efficiency investments, such as enhanced corporate reputation, improved employee morale, and higher worker productivity. • Employee engagement is an effective, but possibly underutilized strategy for improving energy efficiency. Energy is pervasive within a corporation; almost every employee has the ability to make an impact to reduce its use. Recognizing this, many companies have launched programs to educate and engage employees in energy saving programs. Some have established innovative programs that reward employees for energy savings, and others have made progress toward efficiency goals a standard component of their employee review process. Still, while our survey respondents noted that these programs often yield surprisingly positive responses, they also reported that employee engagement receives the least financial and staff resources relative to other efficiency program elements.
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