Survey Reveals Importance of Energy Efficiency to Businesses

IN A GLOBAL executive study on energy efficiency half of executives stated it has improved their organisation’s bottom line and will play a more important role in the future.

Ingersoll-Rand plc together with the Economist Intelligence Unit announced yesterday the results of the global C-level executive study on energy efficiency and sustainability.

The survey calls out the gap in perception between CEOs and other senior executives in their organisations. Respondents beneath the C-suite are significantly more likely (61 percent vs. 49 percent) to say that their organisations do not do enough to integrate energy efficiency initiatives into business strategy. This is critical as funding, implementation and prioritisation require executive level support. Lack of support can mean lack of progress.

Findings from the study indicate the dilemma faced by executives in maximising the effectiveness of their sustainability programs, especially with regards to energy efficiency. These include:

  • Firms find it difficult to assess their energy use and make progress in reducing it. Only 26 percent of respondents say their organisation has conducted an energy audit; some 22 percent do no measurement at all. Although experts agree that the best efficiency strategies need to cut across functional lines, at present few companies outside the largest organisations have a chief energy officer coordinating such initiatives.
  • Firms’ supply chains are too often overlooked when assessing energy efficiency initiatives. For many companies, particularly retailers and those who outsource their manufacturing, total energy consumption occurs mostly in the supply chain. Yet the survey shows that most firms tend to focus internally, with few looking outside their direct operations to their supply chain. Just 8 percent said energy efficiency was a priority for suppliers, and only 4 percent said they had worked with suppliers in this area.

The incentives for energy efficiency vary significantly by global region. Payback times and the price of electricity are key considerations determining the willingness to invest. In Europe the business case for saving energy is particularly clear, since taxes are applied to electricity sales. This is reflected in the survey, with more Europeans (almost 90 percent) than North Americans (77 percent) citing cost savings as the biggest benefit of energy efficiency

“We conducted this research to better understand the gap between C-level executives and other senior executives about the effectiveness of energy efficiency and sustainability programs,” stated John W. Conover IV, senior vice president, Ingersoll Rand and Chairman of the Ingersoll Rand Sustainability Council.

“Understanding what it will take to bridge the gap is critical to make the business case for change. In fact, investing in energy efficiency programs is a best bet for executives looking for paybacks that are fast, may deliver up to a 7-to-1 return on investment, and engage employees at the same time.”

Picture by infomatique

Tuesday 15th March 2011

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