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An effective energy and carbon management strategy requires commitment and action from an organisation’s senior leadership. For many organisations, formalising the process can represent a significant cultural change; employees on any level in organisation hierarchy might not appreciate the scale of wasted energy, or the financial and environmental implications of energy use.

It is, therefore, important for an energy and carbon manager to develop a strong and persuasive business case which will help an organisation’s senior leaders understand the importance of energy and carbon management and how it can support business resilience against volatile energy prices, among other benefits.

It should be based on the following business drivers:

Regulatory compliance and reporting:

One of the key priorities of an energy and carbon manager is to ensure that all relevant laws, regulations and industry-specific standards are complied with. Some organisations are subject to international, national or other energy policies and regulations. For example, in the UK these might include the Energy Savings Opportunity Scheme (ESOS) or Streamlined Energy and Carbon Reporting (SECR), Building Regulations (especially Part L), Global net zero commitments or national energy efficiency performance standards and/or energy labels.

As governments continue to introduce legislation and regulations to address climate change, early adoption of energy and carbon management can mitigate against future climate-related risks and take advantage of related business opportunities. Unless an organisation is obliged under specific legislation, the public disclosure of energy use or carbon footprint is usually optional. However, there are tangible business benefits to be gained from disclosure and public reporting, such as improved customer trust or boosted competitive advantage.

Cost saving:

The rise of energy prices, and their increasing volatility, may significantly impact a company’s financial position. Another critical role for an energy and carbon manager is to buy energy effectively and use it efficiently. This can minimise an organisation’s exposure to energy cost-related risks and control utility bills.

The Carbon Trust has estimated that most organisations can save 20% on their energy bills by managing use and investing in cost-effective energy efficiency measures. 5-10% can still be saved if they limit their programmes to low/no cost measures, such as staff awareness training, changing habits or simple automation.

Additionally, reducing emissions can limit operational costs. Some companies capitalise on emissions by putting an internal price on carbon. It places a monetary value on GHGs emissions, which they can then factor into investment decisions and business operations. The use of internal carbon pricing is to achieve one or more of three key objectives: driving low-carbon investment, improving energy efficiency, and changing internal behaviour in an organisation. According to CDP (formerly the Carbon Disclosure Project), as of 2020 more than 2,000 companies worldwide are either using or planning to use an internal carbon price.

Improved property value:

Numerous studies show that compared to typical buildings, energy efficient buildings demonstrate higher asset value (sale prices from 1% to 31% higher ), higher rent (rental premiums 3% to 16% higher) and higher occupancy rate (occupancy levels up to 10% higher).

Boosted reputation:

A strong energy and carbon management system could be one of the best ways to incorporate ESG (environmental, social, governance) factors into an organisation’s strategy. As ESG increasingly influences capital expenditure and operations, a system that manages energy use and emissions reduction demonstrates good practice to both customers and shareholders. It can benefit the wider reputation of an organisation, raise its profile, and help the organisation gain a competitive advantage in the market.

Involving people:

An energy efficient and carbon concerned organisational culture can help enhance an organisation’s reputation not only in the eyes of customers and stakeholders, but also its employees. Staff engagement is an important task for energy and carbon managers. Behavioural change among employees is a key way to achieve an organisation’s sustainability targets. It may also increase employees’ work satisfaction and attract new talent.  

By identifying energy-ineffective practices and equipment, and adjusting accordingly, an organisation can also improve non-energy aspects of its operations, such as productivity levels, health and safety, and equipment performance. For instance, a review of office building lighting can reduce energy consumption whilst also improving light quality. This leads to better working conditions, which can increase employee productivity.

Want to know more? More detailed information is available in our online training course, Level 1, Certificate in Energy Management Essentials. To learn more, visit Energy Management Training | Energy Institute