Energy and Sustainability’s Impact on the Bottom Line

January 23, 2018 Jin Park

Energy and Sustainability’s Impact on the Bottom Line

Efficiency and sustainability activities have a direct impact on a company’s bottom line. Successful businesses understand the connection between efficiency and profitability. By leveraging this knowledge many companies are achieving significant business acceleration through improved growth, profit and brand value.

Findings from the 2016 CDP Report show a strong correlation between efficiency and sustainability and revenue. Over a five-year period, 62 companies collectively reduced GHG by 26% while increasing revenue by 29%. In contrast, companies that increased emissions by 6% saw a decrease in revenue by the same margin.

Today, there are three trends driving the business relevance of efficiency and sustainability:

  1. The digital world makes ACCOUNTABILITY mandatory; not just to satisfy customers and shareholders, but society at large. The days of growth without trust and responsibility are over, trust must be earned through corporate actions
  2. PROFITABILITY in today’s global economy is dependent on stringent enterprise-wide cost management. These savings are funding investments in growth.
  3. There is no future-proofing a SUPPLY CHAIN without sustainability.

It’s no wonder why CFO’s are now adding sustainability to their core business KPIs. Going beyond Total Shareholder Return, sustainability indicators and targets are highly predictive of a company’s future competitiveness.

Read: 3 Things to do to make the CDP “A” List (or How to Avoid an “F”)

responding to change in times of uncertaintyDespite the clear connection, many businesses are struggling to achieve their ambitious targets. The journey from understanding the relevance of a comprehensive energy management program to achieving results from it seems to be challenging, especially for large and complex global organizations.

A survey of 74 energy managers during a September 2017 webinar details how difficult this effort can be. Asked about their greatest challenges to achieving efficiency targets, more than 60% indicated that complex decision making, meaning conflicting priorities or insufficient budgets, followed by a lack of centralized data are key obstacles to making progress.

Embracing the Energy Unknown 1

But what companies don’t realize is that the most difficult barriers to success are organizational, not technical. Before a company even considers a tactical plan of what software to buy or what ECMs to implement, a programmatic approach to top-down energy management must be established to drive efficiency throughout the entire organization. Without that, most efficiency plans have limited impact, or worse, never get off the ground.

To learn more about how an enterprise-wide efficiency and sustainability program can accelerate the financial health of your company, watch our on-demand webinar on Building a Business Case for Efficiency.  In it, you’ll learn:

  • What KPIs and messages drive executive decision making
  • How various ECMs influence your payback schedule
  • The importance of portfolio-wide benchmarking and target setting
  • How to drive corporate governance that accelerates implementation

 

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