The focus on sustainability – on how the resources of the planet are affected by the conduct of business, and how business can survive or even thrive in a resource-constrained future – is a healthy development. At the same time, in the real world of companies and organizations, this shift of focus produces new opportunities for personal ambition, departmental rivalry and other nonproductive behavior. This battle for sustainability high ground might hinder your deployment of breakthrough energy-management programs.
Energy has significant and multiple effects on business viability. Rising and volatile energy prices threaten future profitability and stability. Energy supply reliability could clearly jeopardize business. As the main cause of manmade greenhouse gases, energy use is usually the defining factor of the company’s carbon footprint.
Managing waste energy consumes vast quantities of cooling water, affecting water tables and waste-management systems. Using energy creates multiple polluting byproducts in addition to greenhouse gases, both directly and indirectly. Last, but certainly not least, markets also are affected by the changing energy scene, producing new threats and opportunities for the company’s products and services.
Historically, energy management has been low in most manufacturers’ priorities, with operations heavily focused on reliability and meeting demand. Energy occasionally made it to the tabletop during price spikes with procurement pressured to find a better deal, or, more often, punished for bad forecasting. Once in a while, a senior manager would see the long-term operational and environmental benefits of energy efficiency, and there would be a flurry of conservation programs. Inevitably, energy management was seen either as a buying issue or an environmental issue, and not really a core operational issue.
Typically, buying energy and conserving energy were viewed as two distinct functions with little or no linkage. Energy management was synonymous with energy conservation and put in the orbit of the environmental group. This has been by far the most common picture, and, with some notable exceptions, this usually hasn’t been the organizational concept that delivered energy productivity breakthroughs. Breakthroughs come when operations, procurement and environmental departments work together to maximize energy productivity, usually led by a fully empowered senior corporate energy manager.
Moving into today’s changing reality, sustainability is the new, hot career path with high levels of organizational visibility, a situation that doesn’t always bring out the best in people. At the same time, to many people, the word “sustainability” still sounds a lot like the “environmental” of old. This is especially true of the manufacturing and operational teams that still have to meet the daily pressure of today’s delivery.
These perceptions set up a playground for mischief. Sustainability might become the new battleground for inappropriate ambition, and the company might lack the deep and committed engagement of its procurement, manufacturing and operational side. Effective energy management will suffer if this happens. If energy management suffers, then the company’s greenhouse gas performance inevitably worsens. The risks for many businesses are too great for such an outcome.
The tools to avoid this risk are well documented and widely available. The U.S. EPA’s Energy Star Industrial program has simple and effective management tools that allow a company to assess its readiness to deliver energy productivity breakthroughs. Recently, Energy Star has looked further into the uncertain future and developed a valuable guide for senior management. “Energy Strategy for the Road Ahead,” guides management through the minefield of the possible scenarios they might face concerning energy and climate change. In addition, organizations such as the California Climate Action Registry, among others, have a wealth of experience and advice about the links between energy sourcing and efficiency, and carbon footprint.
Senior management needs to be alert and watch for the early warning signs of what really are old turf battles among procurement, operations and environmental all struggling to control the energy and climate agenda for political reasons. In the 21st century, deep and effective sustainability management is core to a thriving competitive business and is far too important to be left to yesterday’s departmental skirmishes.
Peter Garforth is principal of Garforth International LLC, Toledo, Ohio. E-mail him at [email protected].