Most corporate statements on sustainability or energy include what appear to be general statements of principle in terms of desired outcomes or behavior. It is not always obvious how these are translated into the daily operating and investment decisions. Too often they become sidelined as “aspirational visions,” unrelated to the daily business reality. Is there a way for principles to have a tangible and direct impact on the normal course of business?
One way of looking at principles is as “eternal goals” and a basis for calculating targets. This is not as squishy as it seems! How would a typical energy-efficiency principle such as “We will operate all our facilities at global best-practice levels of energy efficiency” translate into the real world?
As an “eternal goal,” this principle will be interpreted differently depending on when it is being applied, eliminating endless discussions on the “right” target. At the simplest level, a company with sites around the world can internally benchmark their efficiencies, making the minimal interpretation of this principle that all sites should assign resources to perform at levels approaching the company’s most-efficient facilities.
However, this principle really says the benchmark should be the most efficient comparable facility, irrespective of where it is and who owns it. This raises the bar on the homework needed before operating targets are locked down and site energy plans and processes are put in place. Even if the company operates in only one region, the principle requires a global understanding to set local targets. As a collateral benefit, this research may even help a company identify new opportunities or avoid being blindsided by competitors.
The power of principles to drive decisions grows when principles are the basis for setting goals for deep renovation of existing facilities or the building of new ones. Typically, this will result in the support of a principle such as, “We are committed to support efforts to slow climate change by reducing our carbon footprint in line with the Paris Agreement.” How would this principle be applied to decision-making around a major new facility?
The first step is to translate “in line with the Paris Agreement” into a greenhouse-gas performance target. Broadly it calls for an absolute 80% reduction from 1990 levels by 2050, irrespective of any increase in activity. In one interpretation, this would call for a major new facility to add no new carbon emissions! In another, it would call for the plant to create no more than 20% of the emissions a comparable facility would have created in 1990. The latter is probably the most generous interpretation of the principle.
Before setting a firm emissions target, there will have to be alignment on what will be counted. Energy and process emissions from the site operations are a given and are relatively easy to scope and estimate. Less obvious but potentially significant are emissions caused by employee transportation. An aspect often overlooked is any possible land-use impacts unrelated to energy and process. There is no right or wrong answer, but alignment is essential.
The steps from the principle to the detailed scope lead to a greenhouse gas target that will be part of the final design and ongoing operations. This requires site energy, emissions, and cost simulations under various operating conditions to be as much a part of the final design as the construction drawings. We are finding that creating these integrated simulations is a growing aspect of our energy planning requests.
The idea of the principle as an “eternal goal” naturally affects regular target-setting exercises. If the principle calls for adhering to global best practice, then the practice must be researched before a local target can be finally approved. Recognizing that best practices tend to improve and be updated, the quantification should be regularly updated, too – a five-year interval for doing so is not a bad rule of thumb.
Interpreting sustainability principles as visionary aspirations strips them of their power to create transformational change. Treating them as quantifiable “eternal goals” driving all aspects of the design and operational management of our facilities creates sustainable competitive businesses. They are a powerful weapon in the energy manager’s armory to drive cost-effective energy productivity.