How environmental managers can make the business case for energy management

Subscribe to Business Support blog feeds

Published

Eager to understand and reduce their company’s energy use and associated taxes as well as achieve standards such as ISO50001, environmental managers are increasingly looking to implement a comprehensive energy management programme. However, as with any new programme, buy-in from the senior leadership team is essential. So how can HSCE professionals make the business case for energy management?  Three approaches are suggested below.

 

Tie in company goals

When it comes to energy management, there tend to be three main business drivers – as we identified in our recent energy strategy whitepaper. Identifying which of these motivations most effectively addresses your company’s current goals will help you make the case to your business leaders.

For example, if your company wants to do business with another business that requires suppliers to adhere to certain environmental credentials, such as Marks & Spencer, then demonstrating you understand your energy use and have a strategy in place to make reductions is vital to procurement success.

rollerdoors 

Push back on the ROI

Speak the language of management by explaining the payback for any expenditures to show you understand and respect the business’ bottom line.

Often environmental upgrades get nixed because of the initial cost they represent. However, when all benefits are included in the ROI, a rosier (or greener) picture is painted. For example, the benefit of replacing lighting with a more energy-efficient option (such as LEDS) isn’t just the reduced energy bill, but also the reduced maintenance time (and health and safety hazards) and costs associated with regularly replacing burned out lighting. Additionally, the new lighting could impact important issues, such as employee wellbeing, safety and productivity with improved quality of light.

Case Study: I recently worked with an injection moulding manufacturer who was able to successfully apply for an EU grant that pays for 45% of their new energy-efficient moulding machine and low-pressure vacuum dryer. The new equipment is predicted to reduce the company’s energy bills by around 35% per annum simply because the dryer is 50% more energy efficient than its predecessor and as its more effective at doing its job it only needs to be switched-on for 30% of the time.  Furthermore, savings on the injection moulding machine were from replacing two older machines with one new energy efficient machine and reduced maintenance costs and down time. 

I helped the company select the proper upgrades, demonstrate the predicted payback which was 3 years with the grant support and assemble the application and associated materials.

Sometimes selling an environmental solution up the ladder means re-examining outdated policies that require a simple 2-year payback period to ensure valuable solutions aren’t dismissed offhand. Generally, environmental upgrades have a payback period of 2-5 years, so a more future-focused approach is sometimes needed.

 

Enlist independent advice and advocacy

Ensuring your ROI is accurate is a common challenge for environmental managers. In addition, convincing management that your recommendations are best practice and realistic can be a stumbling block. Bringing in an independent adviser to partner on implementing an energy management programme from proposal to project installations can be invaluable in ensuring success.

Whatever partner is chosen should also be willing to help you present the recommended solution and progress reports to senior management in order to field questions and challenges.

Despite the effort needed to ‘sell’ energy management to your leadership team, it is a worthwhile endeavour. For example, I worked with a manufacturer on an energy management programme where one of the recommendations was to install a sensor on the top of their roller top bay door so that when the door was open, the heating in that area of the facility was switched off automatically. This was a simple solution that cost about £500, but the payback was under a month.

EEF provides energy management consulting for businesses of all sizes across the UK. Get in touch to arrange a diagnostic call or visit to discuss your particular energy management challenges.

Author

This person has now left EEF. Please contact us on 0808 168 1874 or email us at enquiries@eef.org.uk if you have any questions.

Other articles from this author >
Presentationsmall Must-have training courses for 14001

Ensure everyone from line managers to internal auditors has the skills to succeed.

Read more >
Esos What to do after your ESOS audit

We have put together a three-step guide to getting started on you ESOS energy audit recommendations.

Read more >
IEMAmembershipchangesthumb IEMA membership introduced a new practitioner level membership

Find out how this affects your current study.

Read more >
Online payments are not supported by your browser. Please choose an alternative browser or make payments through the 'Other payment options' on step 3.