Sustainability and the Bottom Line
Sustainability and Energy executives gathered at MassTLC member EnerNOC last Thursday, January 24th to talk about how Energy Management is evolving from a Facilities task to a CFO tracked budget item. This seminar entitled, Energy and the Bottom Line – Tracking and managing energy costs to a better business advantage featured a panel of experts including: moderator, Paul Sereiko from the NECEC Institute; Ernest Agresti, Jr., VP Administration, Cummings Properties; Cynthia Curtis, Chief Sustainability Officer, CA Technologies; Laurie Giandomenico, Vice President of Marketing and Communications, EnerNOC; John Messervy, Director of Capital and Facilities Planning for Partners' Healthcare; Roy Stein, Co-Founder and COO, Zik Energy Points Inc.
Paul Sereiko started the conversation talking about the NECEC Institute, whose mission is to accelerate innovation with the cleantech sector. This is mainly done through their CleanzoNE initiative.
Paul shared some data pulled from the internet on Energy consumption in Commercial buildings which is still a leading contributor to energy consumption in the US. Lighting and HVAC are the two biggest contributors, but with the ROI of LED lighting almost 10 years with little return, it can still be a hard sell. Interestingly, overall energy consumption per dollar GDP is declining and is projected to continue to decline through 2035. This is due to the decline of manufacturing in the United States. Manufacturing processes have a very high energy consumption rate.
Cynthia Curtis talked about the difference between the CSO and Facilities Management which work closely together and share information, but her position also includes employee engagement, reporting and metrics. John Messervy concurred that Sustainability can be very broad and at Partners it includes food, water and chemicals used in its hospitals. Small items like medical tubing, can make an impact on health based on the chemicals used in it.
So is this movement of Sustainability new? We have been hearing the term but what is new is the scope and impact of it on a company. CEO’s and employees are becoming engaged in the Sustainability of a company which benefits the overall morale and culture and plays into talent acquisition.
There is also a growing trend of CFO’s aligning their reporting with Sustainability reporting. At Cummings the CFO is asking its employees to take advantage of incentive programs. Partner’s CFO has challenged their hospitals to look for ROI’s of 12% in Energy and Sustainability projects.
Dashboards and the standardization of metrics with tools like that of Energy Points also gives visibility to Energy savings potential and creates new incentives within a company to do better. Roy Stein gave the example of a typical IT department that is not as concerned about Energy conservation as it is about its downtime. With normalized reporting, IT will be incented to take ownership and work with Facilities to conserve Energy.
What about utility incentives? Laura Giandomenico talked about how these can reduce the ROI on projects. Ernie Agresti added that most conservation initiatives would not be possible without the tax and utility incentives. Cummings has even used these incentives in very creative ways. Since the lessees are responsible for upgrading their premises, they may not be willing to make a long term investment on a short term property lease. So when Cummings acted as the contractor, they were able to implement energy saving initiatives and pass the saving on to their tenents.
With Energy Management technologies, reporting software and benchmarking technologies out there, Sustainability initiatives are gaining traction at the top levels of management. This will continue to impact the way we look at Energy conservation as part of business as usual and hopefully make a positive impact on our environment along the way.