The universal sustainability metric
The problem is that businesses that look at greenhouse gas emissions, kilowatt hours for electricity, BTUs for gas and gallons for water — and then keep them separate — are bound to get confused. What Energy Points does is to use a gallon of gasoline as a baseline. Its algorithms convert all other types of energy — electricity, water, oil, natural gas — into a metric relative to that gallon of gasoline. In that way, a CFO can derive one number to determine his organization's energy use no matter what kind of energy is critical for the business, and track that cost, using it to drive strategic decisions.
With Energy Points' application, what CFOs see is an interpretation generated by that algorithm that is easy for them to understand. "It's like the iPhone," Zik says. "The front is intuitive; the complexity is inside."
Energy Points tracks the actual cost of all the forms of energy a business uses so that the business can allocate its budget accordingly. It also generates a sustainability report based on factors such as consumption, waste and scarcity, which the sustainability officer (more and more often the CFO) can bring straight to the board. "This allows the CFO to determine the budget, decide what projects to pursue, and then track and report the success of the project," Lewis says.
"Say you're a brewery," he says. "That's a very water-intensive business. You'd be more interested in saving water there versus a facility like mine that's electric-intensive. What [Energy Points] has helped us to understand is that if we were to open up a new distribution center, we can look at the universal cost of energy — gas, electric, water and so on — and then look on a map and see where the most sustainable location might be."
For example, the brewery might see that water is particularly costly in Arizona and other parts of the Southwest, and cheaper in places like Idaho and the Pacific Northwest. "It's very intuitive," says Lewis, which is extraordinarily helpful given the complexity of determining energy costs as separate units.
Next page: The CFO's responsibility