Energy efficiency is really about energy productivity—and that’s about the bottom line

March 21, 2019 Rachel Bannon-Godfrey

As we adopt the language of revenue growth, designers and engineers can use metrics to connect with clients where it matters to them most

 

We need to rethink the language we use to describe energy efficiency. When designers and engineers explain building energy efficiency in the industry jargon of EUI, pEUI, and “percent better than code,” we lose half the audience. If we dive into the nuanced metrics of site energy, source energy, and carbon emissions factors we’re likely to lose a portion of the other half.

What’s missing from the current language we use to talk about energy?

Relatable, desirable metrics.

Efficiency evokes strategies for cost-cutting, downsizing. More importantly, describing energy consumption on a per-unit-floor-area-per-year basis sends a message to our clients that it is a space-related, fixed-cost issue. It suggests that the conversation is about overhead instead of an opportunity for revenue growth.

Energy productivity, on the other hand, evokes opportunities for value-creation. Energy productivity quantifies a company’s economic output for every unit of energy consumed. Instead of conventional metrics of energy consumed per unit area of a maintenance building, data center, or office space, with energy productivity we look at number of buses serviced, units of data traffic, or hours billed in a consulting firm per unit of energy consumed. We capture and express energy performance and economic performance in one metric.

 

Zero carbon buildings are one of the EP100 commitment pathways.

 

Instead of the traditional method of selling the benefits of an HVAC system upgrade on the basis of “percent savings in units of energy consumed per unit floor area per year,” we can use the lens of energy productivity to talk about the increase in billed hours of consulting services per unit of energy consumed in an office; higher volume of buses cleaned and repaired per unit of energy consumed in a vehicle maintenance facility; or greater number of passengers served per unit of energy consumed in a transit terminal.

Energy productivity quantifies the amount of service provided, or useful work produced, per unit of energy. It’s an indication of the financial value created by every unit of energy.

 

Giving energy efficient a louder voice

This is not to say that we can ignore the critical role energy efficiency and building performance plays in both mitigating, and adapting to, the climate crisis. To achieve the high-level goals of energy productivity, organizations will likely first need to invest in a full suite of energy-efficiency strategies. By aligning energy use goals with the C-Suite’s financial metrics—such as product output, worker productivity, or customers served—we give energy efficiency a louder voice, and a more defined role, in a company’s business model.

 

Revenue-friendly mindset

When we use the language of a company’s specific revenue and services to quantify the benefits of energy efficiency, we not only make a more tangible and compelling argument for the investment but we help decouple energy efficiency from economic revenue. This is not just an exercise in semantics.

_q_tweetable:By reframing the metrics of energy efficiency in the metrics of business investments and revenue growth, we help our clients better identify opportunities for value creation._q_Recent innovations in systems-thinking and circular economy thinking have shown us that energy efficiency and economic growth are not in opposition but are rather goals that can be achieved simultaneously. Companies can reduce their energy footprint and continue to grow company revenue at the same time. They will do well to move beyond simply looking at energy consumption and utility bills, to also consider the impact of typical energy-efficiency strategies on worker health and well-being. A workplace environment that features quality daylight, operable windows, and broader temperature ranges has been shown to boost staff health and well-being and a company’s personnel costs. On the logistics side, many strategies aimed at increasing energy efficiency also decrease a company’s operating and capital costs, again improving their bottom line.

When we factor the holistic, direct and indirect benefits of efficiency into the equation, energy productivity proves that a company can simultaneously consume less energy and increase revenue. Rather than being mutually exclusive, energy efficiency and company profitability have been proven time and again to be interdependent. 

Energy productivity is not a new concept. The EP100 campaign, a partnership between the °Climate Group and the Alliance to Save Energy, has grown to 39 member companies across the world, including H&M, Hilton, Salesforce, and Swiss RE . To become a member, companies commit to one or more of three pathways for using energy more productively within defined timeframes:

  • Doubling economic output from every unit of energy consumed within 25 years from a 2005 baseline.
  • Cutting energy waste by implementing a smart energy management system within 10 years.
  • Owning, occupying or developing buildings that operate at net zero carbon by 2030.

According to the °Climate Group if 100 companies doubled their energy productivity by 2030 the potential avoided emissions would be equivalent to taking 37 million cars off the road for a year.

 

Evolv1 in Waterloo, Ontario, is Canada's first building to receive a Zero Carbon Design Certification. 

 

“Help me identify opportunities and find value”

The time is right for language that more directly addresses the value proposition for clients. At the recent GreenBiz19 conference in Phoenix, a key message coming from the CEOs and CSOs of companies large and small was that companies are moving beyond sustainability as a risk-management strategy—help me protect my assets—towards setting sustainability goals for their potential value creation—help me identify opportunities and find value. At the same time, the scope and definition of ‘value’ is changing rapidly across different sectors and geographies.

By reframing the metrics of energy efficiency in the metrics of business investments and revenue growth, we help our clients better identify opportunities for value creation. As we continue to raise the bar for excellence in building performance, energy efficiency, and management, there is a growing need to create stronger alliances within the business community. Alliances are stronger when we can all speak the same language—let’s adopt the language of energy productivity.

About the Author

Rachel Bannon-Godfrey

Rachel Bannon-Godfrey has more than 15 years of experience in the design, construction, and analysis of high-performance and net-zero energy buildings, along with energy efficient and renewable energy technologies. She is our sustainability team leader.

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