Next-generation energy management and performance is an emerging corporate best practice that offers multiple benefits to an organization’s bottom line. By transforming its corporate real estate portfolio energy use through measures like deep energy retrofits, an organization can, in addition to energy cost savings, reap other—and more financially valuable—benefits such as greater employee productivity and engagement, reduced absenteeism, and improved employee retention and attraction. In other words, energy efficiency is not just about energy.
Rocky Mountain Institute (RMI) and CoreNet Global recently announced a new multi-phased research and industry-engagement collaboration to further corporate next-generation energy management. “We believe that with a unified voice, CoreNet Global and RMI are well-positioned to have a significant impact on the ways that corporations think about energy use,” says Angela Cain, CEO of CoreNet Global. “Energy management is not just a sustainable business practice, it is fiscally advantageous.”
The Many Benefits of Energy Management and Performance
To bring to life the idea of superior energy performance providing multiple benefits, let’s take a look at Coca-Cola moving its Canadian headquarters from the suburbs to downtown Toronto.
This move, while not a project that fits squarely into an energy management program per se, helps the company reduce its energy use and resulting carbon footprint in several ways. Coca-Cola’s work-from-home policy and offering of hoteling stations help reduce the amount of square feet needed in the office and emissions from employees’ commutes. For those who come to the office, the location of the office in an urban setting presents employees with greater access to alternative means of transportation. The office space uses daylighting from floor-to-ceiling windows and an open layout, complemented by low-wattage lighting equipped with motion sensors, which contribute to an expected LEED Silver certification. Moreover, renovating an existing building rather than building a new one reduced the amount of raw materials and embodied energy of those materials needed to accommodate this move.
This new office that saves energy in multiple ways will help the company meet the demands of its emerging young workforce, the “millennial” generation who represent one-third of today’s workforce and will represent about three-fourths of the workforce by 2025. Deloitte’s Millennial Survey 2013 found that millennials want to work for companies that—more than anything else, including profit generation—help improve society, citing environmental challenges as the most important issue demanding business attention. An office building that has a lower carbon footprint can thus be a selling point for millennials. Furthermore, they believe that a better physical office workplace environment with daylighting and other features affects their ability to think creatively and collaborate. Millennials also tend to live in cities.
To attract and retain talent, it is therefore becoming increasingly important for businesses to signal a commitment to address the challenges that will improve society and offer office spaces that millennials seek.
Stakeholder demand for sustainability and trends in workplace transformation each contributed to Coca-Cola’s thoughtful move to downtown Toronto; these among other market drivers are making robust and integrative plans for enhancing sustainability and energy performance of greater importance and value.
As part of our first phase of research, RMI and CoreNet Global identified nine key drivers—highlighted in the April 2014 report Next Generation Energy Management: A Roadmap to the Next Level of Performance—that enable and create an increasing demand for next-generation energy management and performance:
- Energy Cost Savings
- Sustainability Measurement
- Stakeholder Demand for Sustainability
- Capital Availability
- Risk Mitigation and Management
- Workplace Transformation
- Smart Building Technology
- Healthy Buildings
- Electricity Grid Evolution
During RMI and CoreNet’s next phase of research, to be completed later this year, we will expand our assessment of key drivers of energy efficiency and renewable energy investment, clarify obstacles to market and organizational change, and develop a refined and expanded set of corporate energy management solutions.
Significant Business Value Being Left on the Table
Corporations have made progress in energy management and performance since 2007, when RMI and CoreNet Global published The Energy Challenge: A New Agenda for Corporate Real Estate. However, research presented in the RMI-CoreNet April 2014 report suggests that many corporate executives believe sustainability efforts have reached a plateau, with efforts creating incremental impact and little change to sustainability metrics.
Corporate real estate is no exception. It is also missing out on a vast opportunity to increase profits, reduce risks, and make even stronger contributions to society. Investments in next generation energy management and performance—through measures like deep energy retrofits—are not only doable but also valuable. Given recent market trends, they make more and more sense since they offer multiple benefits for business beyond energy cost savings. RMI’s Deep Retrofit Value guide shows that the non-energy benefits of next-generation energy management and performance—such as increases in productivity, fewer sick days among employees, and greater attraction and retention of existing ones—are not ‘soft’ but in fact real opportunities for significant, quantifiable business value.
This article also appeared on Greenbiz as part of RMI’s monthly Institutional Acupuncture column.
Photo courtesy of Figure 3, by Steve Tsai Photography. Used with permission.