Thursday, January 10, 2013

Public GHG Reduction Goals Drive Energy Accountability

In our travels and client work, we note material differences in energy accountability in organizations with public GHG reduction goals compared to ones without public goals. Examples abound but include Applied Materials, City of Boston, Harvard University, and Sanofi to name just a few. Energy and sustainability leaders need to leverage these public goals when they have them and to advocate for public goals if their organization lacks one. 

These public and often BHAG (Big Hairy Audacious Goals from the Collins and Porras book, Built to Last) reduction goals provide many tactical benefits and drive energy accountability and reduction. Here are some examples of specific behavior changes driven by public goals that we have seen in the last six months:
  • A yearly review of the GHG goal and energy reduction plans by the Board of Directors at a large company. Before establishment of the GHG reduction goal, the Board did not review energy reduction plans.
  • Corporate-level tracking of energy projects to ensure coordination and achievement. Previously, energy projects were considered "maintenance" and were only of concern at the local level.
  • An invigorated cross-functional, Energy Governance Committee to monitor quarterly progress against energy goals and to guarantee accurate and timely energy data distribution to budget owners.
  • Senior management at one Fortune 500 company established a goal to stay in the top quartile of their industry in two well known sustainability ratings. This reputational goal strengthened the business case for investment in energy projects.
  • At a food manufacturer, the account team that sells to Walmart now reviews energy efficiency projects for the upcoming year so they can demonstrate operational improvements to Walmart and other large customers committed to a greener and leaner supply chain. While not directly a public GHG reduction goal, meeting customer expectations for GHG and energy improvements provides similar organizational benefit. 
  • In response to a BHAG GHG reduction goal at a major U.S. city, the city's leadership team including the Mayor invested in a comprehensive energy management program (additional staff, projects and technology). The City previously did not systematically focus on energy reduction.
  • A multinational combined corporate staff responsibility for energy procurement, energy consumption and GHG reduction into one team for better cross department coordination and senior management visibility.
Conversely, organizations lacking a public GHG reduction goal often see energy management efforts atrophy. Two instances:
  • At a large manufacturer, the sustainability team was reduced to one person and folded into the EHS team as energy and GHG reduction became less of a priority for senior management as public discussion waned. 
  • The highly successful energy and sustainability team at one company is disbanded after the company was acquired by a larger company that did not have a public GHG or energy goal.
In short, public goal GHG goals are effective tools. While not easy to secure, these goals drive operational improvements in energy use. More management teams and Boards need to establish and support them.

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