Increasingly companies are setting public energy reduction goals as senior management teams better recognize the link between reduced energy consumption, cost savings and an improved company carbon footprint.
During this recession and with energy prices starting to rise, sustainability leaders who do not have a formal energy reduction goal should establish one this year to take advantage of the benefits not fulfilled by an emissions reduction goal.
In the past five years, leading companies set public carbon dioxide (CO2) emissions reduction goals and reviewed and reported progress annually. The process of achieving these goals demonstrated to organizations the power of energy reduction. A lighting upgrade project that was previously "deferred maintenance," for instance, is now a project with strategic benefits and a strong financial payback.
Energy reduction is often measured as a ratio of energy use to revenue, energy use per product shipped (e.g. an automobile or barrel of beer) or energy use per square foot of facility space. Goals can also be measured by the absolute amount of energy consumed.
Many leading companies, such as Clorox, Johnson & Johnson, Ingersoll Rand, PPG and Toyota, have publicly set energy reduction goals. Owens Corning has an energy intensity goal of a 25 percent reduction against its baseline year of 2002. Kimberly Clark plans to improve energy efficiency by 15 percent. Starwoods Hotels and Resorts announced last year plans to reduce energy use by 30 percent in each of its hotels.
Companies also intend to reduce energy intensity in their supply chains. Procter & Gamble specifically asks suppliers about energy use in its Supplier Environmental Sustainability Scorecard, while other large companies are doing the same with their own supplier scorecard programs.
Establishing an energy reduction goal offers benefits that carbon reduction goals do not in today's business climate. Energy reduction directly translates to dollar savings, which is easier to sell internally, especially to line managers and board members who are skeptical about climate change. Reduced energy use is straightforward to understand by many in the company, as energy reduction sounds less technical than greenhouse gas abatement.
Instituting an energy reduction goal is straightforward but requires internal education and CEO support before making it a publicly stated goal. The EPA Energy Star program has good resources to help energy and sustainability teams set goals.
Goals can be set as either as absolute or intensity targets. Many energy and sustainability teams track both measures because both are useful in understanding changes and trends in company energy usage.
Investing the time to secure CEO and board support for a public energy reduction goal is well worth it. Energy visibility and accountability within most companies is diffuse and nonexistent. A publicly stated energy reduction target powerfully focuses the company to execute on the reduction opportunity. This public commitment galvanizes accountability, support and process improvements.
ClimateGate, a lack of carbon regulation legislation and the recession have clouded support for some sustainability efforts, but progress need not be sacrificed. Energy reduction has broad, organizational support, fits in with the need for companies to be operationally lean during a recession, and reduces the company's environmental impact. When announced and tracked publicly, corporate energy reduction goals save the company money and ensure progress toward environmental objectives.