9 Keys to Effective Energy Management

mkozhemyakov | February 3, 2014

By Don MacDonald, UL DQS Director of SustainabilityDon Macdonald UL DQS Director of Sustainability

There is no one-size-fits-all solution for achieving organizational alignment on sustainability in general, and specifically, energy management. Each company faces a unique set of challenges and constraints, either internally driven or externally generated. Companies leading the  way in energy management are proactively looking to align their sustainability actions across departments by beginning with a deep dive into organizational sustainability and energy practices.

Here are the 9 key questions that executives seek to answer in their path for effective return on investment for energy resource management:

How does your company define sustainability and energy?

What are the boundaries? Are there multiple groups working on these initiatives? How do quality, environmental and facilities initiatives and strategies interact? Will these integrated initiatives lead to greater effectiveness and reduced internal labor utilization?

Do we have an asset inventory of all the sustainability and energy projects, going on at the company?

You will be surprised who is talking about sustainability and energy or pursuing sustainability and energy initiatives on your company’s behalf. Are there unknown initiatives? Do we know these as well? Are their cross functional teams?

Does our company have a sustainability and energy overall strategy and goals?

What is the overall strategy? Are the initiatives integrated with this wider corporate strategy and directly relevant to business priorities and underlying energy use and consumption to ensure alignment? Random projects (a program here, individual project, or even new efficient equipment there) while well-meaning, can be ineffective or even counterproductive if they don’t align with broader corporate strategy.

Who’s accountable?

Where does the buck stop? Many companies have energy and sustainability teams. Who is empowered and who are the gate keepers? Who owns the training budget, communications budget, etc.? Who is accountable for facilitating cross departmental actions?

Is there a forum our company can use to align and cross-pollinate ideas on sustainability and energy?

How is sustainability and energy coordinated throughout the organization? Is there a sustainability team that convenes cross-functional groups? If someone at your company has an idea related to sustainability or energy, whom do they take it to?

Does our company have management processes in place for incorporating sustainability in decision-making?

Is sustainability a criterion for purchasing and design specification? Do you have a project gating system? Do you have a system to vet energy and sustainability marketing claims to prevent ‘green washing’? Does energy and sustainability factor into your acquisition due diligence process? Do you consider sustainability in your R&D and tech investments?

Financial valuation, do you value these projects and programs the same way?

Do you apply simple payback methodology for certain projects while using Internal Rate of Return (IRR) or other financial measures for others? Are life time benefits of the management systems measured the same way as other investments?

Can everyone articulate the company’s point of view on sustainability and energy?

Does the program educate employees on sustainability and energy? This is particularly important if, say, the company or industry is dealing with high profile energy or environmental issues such as commercial buildings, industrial process where reporting shareholder value is public.

What is the CEO’s relationship to sustainability and energy?

What is your chief executive saying about energy and sustainability? How, if at all, has his or her message changed across the years? Is it aligned with actual performance and future plans? Your CEO can make or break these initiatives and investments, so a little proactivity in preparation goes a long way. Each organization has an opportunity to be great when it comes to sustainability and energy management. In the excitement to keep up with the crowd, it is easy to overlook small discrepancies in energy, sustainability-related actions and messaging not to mention actual performance.