High Performance Buildings - EMEIA

1
Unlocking the benefits of energy efficiency An
executive dilemma
Chris Webber Senior Editor The Economist
Intelligence Unit
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Unlocking the benefits of energy efficiency An
executive dilemma

• A report from the Economist Intelligence Unit
• Sponsored by Ingersoll Rand

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UK energy consumption affected by downturn
Source DECC
4
UK fuel mix evolving
Source DECC
5
UK and European CO2 emissions falling slightly
Source World Bank
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but increasing rapidly in US and China
Source World Bank
7
UK industry share of consumption declining
Source DECC
8
UK energy efficiency improving significantly
Source DECC
9
Energy still a rising share of costs for UK
companies
Source DECC
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The EIU survey
In October 2010, the Economist Intelligence Unit
conducted a global survey of business managers
involved in their firms energy efficiency
initiatives
Demographics Demographics
Respondents 278 total
Job titles 32 CEOs, presidents or managing directors 24 represented other c-suite or board member positions All respondents held management roles
Function A range of functions
Industry A range of industries
Company size 51 of respondents firms have revenue over US500m
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Five years from now, will energy efficiency
initiatives be more or less important to your
companys business strategy?
Efficiency becoming more important
77 think its going to become more important
over the next five years
Only 19 think its going to become less important
84 of us think energy efficiency is
strategically important
49 say action on energy efficiency has saved
their company money in the last three years
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Energy efficiency benefits

• Cost savings
• Energy treasure hunts have saved GE 130m
• Estimated 1.6bn per year still being wasted in
  UK alone
• Brand value market differentiation
• Cutting carbon is a great environmental story,
  so customers will reward you for having low
  carbon credentials
• Harry Morrison, Carbon Trust Standard Company
• Carbon emissions
• Cost effective way for firms to cut emissions
• But not a solution for overall emissions
  reduction

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ramme?
Cost savings the main benefit
Cost savings Enhanced brand reputation Market
differentiation Increased revenue Enhanced
ability to hire talented workers Enhanced ability
to raise capital
68
54
43
32
12
9
Question What are the most important reasons for
your organisation taking steps to improve energy
efficiency?
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Reported savings
42
27
16
4
Question how much of your companys annual
energy bill would you estimate has been saved by
energy efficiency initiatives in the past three
years?
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Energy efficiency challenges

• Scarce resources
• Performance contracting
• Green Deal
• Lack of expertise
• Audits from the public or private sectors
• Hire specialist staff or consultants
• Split incentives
• Irresolvable disconnect between landlord and
  tenant interests?

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Funding and ROI are the biggest concerns
Proven return on investment Sufficient
funding/resources Energy efficiency
management External incentives Senior management
support Government policies Internal
incentives Employee consultation
46
42
40
39
38
Question In your opinion, what are the most
important factors in helping to integrate energy
efficiency initiatives into business strategy at
your organisation?
22
21
18
17
More are focused on low-hanging fruit
Improved lighting Government regulations Improved
air conditioning Improved heating Buildings
(e.g. insulation) IT department Plant and
equipment
68
53
47
45
40
35
33
Question What type(s) of tactical and strategic
energy efficiency initiatives has your
organisation undertaken to date?
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Does your organisation do enough to integrate
energy efficiency initiatives into business
strategy?
C-suite disconnect?
C-suite
Non c-suite
Question In your opinion, does your organisation
do enough to integrate energy efficiency
initiatives into business strategy?
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Conclusion

• Energy efficiency is a no brainer. Significant
  cost savings and potential brand benefit
• Businesses already making progress, but clearly
  more money to save (est. 1.6bn in UK alone)
• Environmental rationale questionable, but still a
  clear business case
• Scale of government support (via Green Deal)
  still uncertain

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Chris Webber Senior Editor Economist Intelligence
Unit chris.webber_at_economist.com