How Energy Management is Leading Corporate Sustainability Conversations

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How Energy Management is Leading Corporate Sustainability Conversations

Before the 2010’s, investors paid little attention to ESG and Sustainability data. The story in the 2020’s is very different. Today’s investors are hungry for data on your company’s environmental impact, labor policies, energy efficiency, board composition, and more. 

The Real World Business Value of ESG

Strong performance on Environmental, Social, and Corporate Governance metrics are key to keeping capital costs low and improving your firm’s valuation in the market. In other words, a better carbon footprint can literally increase your access to large pools of investor capital. 

George Serafeim, a Harvard Professor and chairman of Greece’s National Corporate Governance Council is an internationally recognized authority on ESG investing. He and his research colleages found that this pattern — ESG positives opening doors to capital — was not unique to equity markets, “but also in loan markets, where some banks are linking interest rates on loans to ESG performance.” One bank (ING) loaned $1.2 billion to Philips, the health tech company, in 2017 on the back of excellent ESG metrics.

Energy Management Talks Are Heating Up

Harvard Business Review opines that “energy is climbing up the corporate agenda” in recent years, in part due to the revolutionary changes in global carbon regulation, rising expectations about corporate sustainability, and the plumetting costs of renewable energy. Trends like these have made it possible to create value and reduce costs in entirely new ways. Moreover, they help companies to avoid negative impacts from bad press and the mounting pressures of a more ESG-conscious public.

The same HBR piece shares the example of Microsoft, which became the target (among other cloud-computing leaders) of a Greenpeace offensive against “dirty data” and Silicon valley companies with poor environmental performance. This pressure — coupled with the advent of cost-effective clean-energy alternatives — convinced Microsoft to push energy management to the top of the agenda. Over a decade (from 2011 to the early 2020s), Microsoft endeavored to source 60% of all energy for its data centers from renewable sources: wind, solar, and hydroelectric power.

Other giant firms have followed suit, including Kellogg’s, which has already achieved an 8% reduction in absolute energy use (with ambitious plans for a 65% reduction in emissions by 2050).

Tracking Is a Cornerstone of the C-Suite Conversation

Many executives who take a newfound interest in energy management and sustainability are shocked to discover that their companies are unable to report on ESG metrics with any certainty. Most of these things have been sparsely tracked for decades, if at all. Firms often don’t have a clear picture of how much energy they use, how much CO2 or refrigerant they’re sending into the atmosphere, or how much they’re really spending on energy. 

The truth is that beyond the most energy-intensive industries, the majority of companies have viewed energy as a simple, ubiquitous, and largely invisible commodity. You flip a switch, and systems come on. This is a perspective that is beginning to change as data continues to prove the tangible profit in purposeful, responsible energy management.

ESG software that simplifies energy, emissions, and refrigerant management can turn the tables and arm you with Investor Quality Data. When you have the tracking tools to report and manage sustainability metrics like energy consumption or refrigerant leaks, you can prove the value of ESG efforts to investors and save incredible sums of money in the process.

Supermarkets, for example, have an average refrigerant leak rate of 25%.  With careful tracking and management of emissions, a reduction to a 10% leak rate is a real possibility. Such an improvement would save:

  • $360,000.00 in refrigerant costs
  • $10,000.00 in extra labor costs
  • $730,000.00 in lost energy efficiency

Figures like that are pushing energy and emissions management into corporate sustainability conversations. They could also open a supermarket up to prestigious recognitions such as GreenChill certification.

Track Performance, Improve Sustainability, Achieve ROI

If you’re wondering how much of a difference efficient energy management can make for your corporate ESG strategy — and your bottom line — get in touch with Trakref. We invite you to schedule a free 15-minute conversation with one of our refrigerant geeks and learn more about the ROI of accurate record-keeping and reporting with Trakref.

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