Wednesday, August 19, 2009

A Snapshot of Corporate Energy Management in 2009

A superlative study of energy management as practiced by 48 U.S. corporations was released in April 2009 by the Pew Center on Global Climate Change. Their survey, conducted in early 2009, provides insight on how companies from a cross-section of industry formulate and implement energy cost-control strategies. While the survey includes both manufacturing and non-manufacturing companies, the sample frame was designed to purposely focus on the results of companies that have declared a proactive focus on improved energy performance. For this reason, the survey presumably captures “best practices” as opposed to “average” practices. The survey highlights a number of lessons-learned:

• The motivations for pursuing energy management vary. The most frequent reason cited by survey respondents was to contribute to the reduction of their company’s carbon footprint. This was followed by (2) need to offset rising energy prices, (3) demonstration of social responsibility, and (4) to leverage energy efficiency as a way to boost productivity innovation and growth. Additional reasons are cited.

• Corporate energy programs are led by a variety of professionals. Per this survey, plant or facility managers, environmental health/safety officers, and operations directors (when counted collectively) are cited as the energy champion more than twice as often as a senior corporate officer.

• Widespread engagement of all personnel. Almost 90 percent of all companies surveyed conduct outreach to engage and inform their employees with respect to energy use and its impact on business as well as in their homes.

• Moving from reactive to proactive. To varying degrees, all survey participants anticipate increasing energy prices and the onset of climate change regulation that will impact their operations. Forty-nine percent of respondents indicate that energy performance is integral to their job performance and career advancement.

• Strategic planning. Most corporations set their own internal targets and timelines for improved energy performance. The average base year for benchmarking is 2003 while the average target year for goal achievement is 2013. The average annual energy savings goal among respondents is approximately 2.2 percent. The modal value of energy reduction goals is 25 percent savings. Forty-eight percent of respondents indicate that they are meeting or exceeding their goals.

• Spin-off impacts and benefits. Energy managers cite a variety of positive impacts from their efforts. These include increased employee engagement; better communications across business units; and support, recognition, and awards from management.

• Energy management is not without challenges. These vary across companies, but often include limited capital availability, limited management leadership and support, competing priorities and resources, and lagging momentum and employee interest.

• Networking and recognition. Most companies participate in government-sponsored support programs and reference materials, such as the U.S. EPA’s Energy Star, the U.S. Department of Energy’s Manufacturing Energy Consumption Survey, the Carbon Disclosure Project, and other networks.

• Lessons learned. Companies applied corrective actions as they gained experience. These included increased use of energy audits to inventory and evaluate their potential improvements, team-building to enhance accountability and effectiveness, development of employee feedback mechanisms, capital fund set-asides strictly for energy, and securing upper management endorsement.



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