Turning the lens around: Using energy co-benefits as a prioritization tool

Thinking in Systems

Turning the lens around: Using energy co-benefits as a prioritization tool

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No matter how important energy efficiency is to the green community, energy expenditures rarely make up much more than 1 percent of a company’s operating budget. The climate change conversation has raised awareness within the executive ranks, propelling some investments, but nowhere near enough. Given how tightly coupled energy and carbon issues are, it would seem that any carbon-conscious executive would invest heavily into avoiding carbon emissions by reducing demand as well as clean supply. 

Unfortunately, clean energy is rarely a company’s No. 1 concern — running a business is. Frequently, this gets simplified to "profit" motives — which is true in many cases. 

However, I have yet to run into someone whose life mission is to ruin the environment. 

Most business owners and division heads are proud to provide jobs, support the fabric of the local community and contribute to society in a positive manner. Each business does so in a different way, part of its strategic positioning to differentiate itself in a crowded market. Usually, other daily headaches are far greater than their energy management regimes.

Today, there are no tools to help a manager understand the energy and carbon impacts of their decisions, whether operational, managerial or investment. Different environmental reporting systems have different definitions of sustainability and materiality. This is because the founding principles of an organization (investor relations, environmental activism, etc.) influence these definitions. Decision makers, therefore, seek information based on these definitions. These impacts are also global in nature — carbon, water, energy, sustainability — making it easier to look at the broad swath but less optimal for division-level decision making. 

We frequently think of energy management as a universally applicable solution, but instead, it must be custom-tailored to support each strategy. For instance, a business that focuses on fast food delivery will need different solutions from one focusing on a relaxed family experience. 

On the other hand, to overcome these challenges, frequently, energy experts will turn to the "co-benefits" argument to convince an executive to invest. For example, an energy-efficient air conditioner will reduce costs, improve resiliency, cause less air pollution, improve health and productivity of tenants, and provide for myriad other benefits. That’s a pretty good business case, right? Although true, this argument still resides on the assumption that the decision-maker is thinking from an energy lens. 

I propose that we flip that. Rather than argue that energy results have co-benefits of a business outcome, we should treat energy as the co-benefits to help prioritize other, often more relatable, attributes.

For instance, in 2012, the American Health Association published a list of 44 recommendations to improve lifestyle and public health. Of these recommendations, 11 happened to be related to energy infrastructure. Six recommendations were related to transportation, three to urban planning policy and two to building design.

I’ve seen this method work from large organizations to small. Every team and each manager has their own headaches that they are trying to address which take up the bulk of their mental cycles. Adding a new issue to their list of concerns is an uphill battle. Instead, explain how an energy solution will solve the problem they are already facing, and the chances of adoption of an energy solution improve. 

When asking a team to list their issues, it’s not uncommon to generate a list of 30 to 50 action items. Yet these disparate needs usually can be grouped into administrative oversight, data fidelity, equipment failures, tenant management, technology selection and incentive management. Now, the energy expert can offer three to five solutions that can address a category of concern, removing operational headaches that also reduce energy consumption, instead of being perceived as a distraction from important day-to-day operations. 

The general three-step process is:

  1. Generate a list of headaches and issues the organization is facing

  2. Categorize them based on similar attributes

  3. Seek energy-based solutions that solve multiple issues

This method has another benefit — giving peace of mind to the executive in charge. Frequently, energy consumption is considered to be an inevitable, unpredictable and uncontrollable cost. Energy efficiency is perceived to be a "spend now, save later" strategy with those inherent risks. On the other hand, using co-benefits in this way, energy efficiency also can be used as a prioritization factor that solves present-day headaches. This makes energy efficiency the hero, too.