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19 Industry Reports - How Global Compact Promotes Efficiency

19 Industry Reports – How Global Compact Promotes Efficiency

Energy costs are on the rise. Their increase is so steady that now even the United Nations has established a program to promote energy efficiency in the private sector. Sustainable Energy for All is the newest set of goals for the United Nations Global Compact. The Global Compact claims to be the world’s largest corporate responsibility initiative and its newest set of goals has three objectives for business in 2030. First, universal access to modern energy services is sought. Second, energy efficiency is to be doubled. And third, the aspiration is to double the share of renewable energy.

In order to take a step forward from sketchy letters of intent towards more realistic goals, Global Compact has identified slightly more concrete goals in cooperation with Accenture Sustainability Services, consulting giant Accenture’s sustainability branch. The initiative has published a 36-page PDF document, The Business Opportunity, which lists a summary of “priority actions” for 19 business sectors. When companies long for “driving their business value through sustainable energy actions”, adhering to these priorities is the way to do it.

Energy has been a relatively inexpensive and abundant commodity for years, comprising only a small portion of the overall cost structure of companies. However, with dynamic geopolitical situations and rising energy costs, energy is now a mission-critical commodity for many organizations—and not simply for energy-intensive industries such as mining or chemicals.

So says page 9 of the report. It also names the actual relative cost savings you can expect through improvements in energy efficiency, sector by sector. So compared to others, the mining and chemical sector can reach relatively moderate 10-15 percent in annual energy spending reductions, whereas portfolios of buildings can reduce energy and building maintenance costs by 25-35 percent. However, even a 10 percent lower energy bill is worth some considerable thought. According to the report, the retail sector can achieve 15-20 percent reductions and utilities 20-25 percent. How is that possible? Even though the report’s recommendations for action in each industry remain rather vague, the efficiency improvement repertoire is broad, as knowtheflow readers are aware.

Still kind of vague, but at the Global Compact web site you can download individual “industry-focused reports” that have some illustrative examples drawn from practice. The examples from the automobile industry include a zero-carbon Renault-Nissan automobile manufacturing plant in Morocco and Daimler’s car2go car-sharing program. The former sources its electrical energy from wind and hydro power and uses olive stones and eucalyptus wood to generate thermal energy for all its processes.

Not Only Energy, but also Operational Efficiency

Apart from energy efficiency improvements, Sustainable Energy for All: The Business Opportunity promotes improvements in operational efficiency. The number one easy-to-replace source of inefficiency is usually hidden somewhere in either heating, ventilation, and air conditioning (HVAC) or lightning. Retrofits in these areas, especially for lightning, are the least complicated measures to take. What’s even more effective, but sometimes also more difficult to integrate in the process structure, are measures to capture the energy in waste streams. These measures are a way to drastically increase overall efficiency, as the report illustrates on page 9:

Also important is the reuse of waste streams through techniques such as combined heat and power. While the conventional method of producing usable heat and power separately has a typical combined efficiency of 45 percent, combined heat and power systems can operate at levels as high as 80 percent, representing a significant potential for bottom-line benefits.

In reference to the practice, a chemical industry report (that you can also download at Global Compact) names 16 co-generation plants run by BASF globally.

Hidden Renewable Benefit: No Exposure to Oil Price Fluctuations

Did you know that switching to renewable energy can improve your company’s risk management? It may be astonishing at first sight, since renewable energy generation itself fluctuates. However, given that the costs for fuel and other fossil energies underlie unpredictable price fluctuations and nobody knows how expensive emission certificates might become once the economy has gotten beyond the global crisis, investing in renewables does reduce your company’s financial risk. Long-term contracts with renewable energy suppliers are one option, self-generation another. See Why and How the Manufacturing Industry Should Go 100% Renewable Now for details.

Five Priority Actions for All Industries

What stays constant for all industries are five priority actions. As The Business Opportunity states, these actions were identified through research and discussions with related companies across all sectors. Here are the actions, as listed on page 13:

1. Increase the energy efficiency of operations.
2. Increase the use of renewable energy to power operations.
3. Provide for energy efficiency through products and services.
4. Identify ways to beneficially reuse waste streams.
5. Educate stakeholders on how to achieve energy efficiency.

Pages 16-34 review goals, actions, business value levers and engagement modalities for all major industry branches. Actions in the category “stakeholder engagement for brand enhancement”, for instance, are broken down into suitable actions for each industry. An example of this, to increase energy efficiency in the automobile industry, is to educate consumers about driving more fuel-efficiently. The same action in the construction industry translates to “[promoting] energy-efficient building codes and regulatory incentives for more energy-efficient building projects”. For the financial industry, two actions are identified for this goal: first, “support [of] microfinance institutions that work on energy access, energy efficiency, and renewable energy”. Second, “support [of] policy frameworks that drive investment in energy access, renewable energy and energy efficiency”. The methodology seems pretty straight-forward. However, since all these goals and actions for 19 industry and business sectors were identified after interviewing 70 different companies, you should at least be aware of them. Sustainable Energy for All summarizes the 21st century business mainstream consensus for sustainable action. It is the minimum your company should put into effect to stay competitive.

Further Reading

Article image CC by USACE Europe District. It shows a cogeneration plant in Italy.

moritzbuehner

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