An energy-efficient ESG strategy can help you reduce your carbon footprint, improve your operations and ultimately boost your bottom line. Here are five best practices to get you started.
1) Strategy on Energy
Energy efficiency is an essential part of every business’s Environmental, Social, and Governance (ESG) strategy. Energy efficiency will also be one of your most significant competitive advantages. According to an NRDC report, Energy efficiency measures that could be implemented at USS industrial plants are estimated to reduce emissions of greenhouse gases by more than 170 million metric tons per year—roughly equivalent to taking over 60 million cars off thU.S.S. roads and highways each year. That said, there’s still room for improvement—and many companies aren’t tapping into their full potential when it comes to energy efficiency strategies. To maximize energy efficiency, you should take a holistic approach: consider low-cost and high-impact changes such as implementing variable speed drive on air compressors or modifying production schedules to shift work hours in lower-cost periods.
2) Portfolio Impact
Having a diverse portfolio is one of the most critical factors in mitigating risk and driving returns. An investment strategy centered on energy efficiency fits into several strategic asset classes, including waste management and infrastructure. This strategy can help drive social value and financial returns, which makes it an ideal addition to any portfolio. Recent research has shown that energy efficiency has grown from 20% of total global power consumption in 1996 to 33% today. Additionally, 1/3rd of greenhouse gas emissions originate from inefficient equipment, buildings, and vehicles.
Nevertheless, companies continue to spend money on building new data centers and extensive facilities without an effective method for operating their systems efficiently or effectively reducing their carbon footprint through clean energy sources. To mitigate risk across your portfolio as well as position yourself ahead of competitors focused on best practices in energy efficiency, consider these 5 ESG bE.S.G. practices:
- Provide transparency into energy performance;
- Implement energy-efficiency programs;
- Obtain certifications related to sustainability;
- Conduct investment analyses that consider environmental impacts;
- Engage with your customers.
3) Climate Change Mitigation
When it comes to climate change, we must act now. That’s why companies are increasingly putting climate change mitigation into their everyday operations—including energy efficiency. By taking small, preventative measures like using more efficient appliances and installing sensors and intelligent lighting systems, companies can ensure that they’re doing their part to reduce their carbon footprint. These investments will often pay off in less time than you might think! Just look at Toyota with its energy action plan: cutting CO2 emissions by half over 20 years.
4) Resource Conservation
It’s difficult to quantify how much energy is wasted every year, but conserving resources is a good idea regardless. While renewable energy is ideal, reducing consumption and using efficient equipment goes long. It has been shown that companies who embrace resource conservation as part of their environmental responsibility can save over 40% in waste reduction costs. At minimal cost, that’s an opportunity any business cannot afford to pass up.
Want to know more about how to embrace ESG best practices effortlessly? See what Findings can do for you.