This tip sheet offers facility and corporate energy managers a road map for launching and promoting an energy management and performance improvement program that has the full commitment and support of senior management. The information below can help energy managers win management support by demonstrating that energy management and investments in energy performance projects are long-term sources of revenue for the company.
Energy managers must understand what motivates senior management decision-making and be able to speak their language. Towards that end, the energy manager should:
Proposals made to senior management to establish an energy management program must have specific savings goals measured in dollars. Clearly stating goals demonstrates the energy manager’s objective of lowering operating costs and improving profitability for the company.
Speak the language of company officers when explaining the program. Use financial metrics such as net present value (NPV), simple payback, internal rate of return, and hurdle rate. Also consider that the risk of energy performance projects may be lower than that of competing investment alternatives. ENERGY STAR’s Financial Value Calculator can help with developing financial metrics.
Usually the funding of company projects is based on first cost rather than lifecycle cost. Additionally, at many manufacturing sites, investments in process improvements take priority over energy investments. By focusing on internal rates of return (IRR), the energy manager can demonstrate that energy projects may be better investment alternatives than capital allocated for process improvements. ENERGY STAR’s Financial Value Calculator can help with determining IRR.
Credibility can be gained by providing evidence to support targeted savings, such as results from a pilot energy management program implemented at a company facility. Pilot programs can demonstrate the relatively short payback periods of energy performance projects and their significant savings. Financial professionals are good resources to help calculate the economic returns from an energy management program.
Use benchmarking data to compare the company’s energy performance relative to similar companies. This will appeal to management’s desire to achieve a competitive edge. ENERGY STAR has tools and resources that can help your company track and benchmark energy performance.
Explain how investing in technologies and practices that reduce energy can impact the company’s energy security and help insulate the company from risks associated with supply and price uncertainties in a deregulated market.
One of the best ways to demonstrate executive support for energy management is to have the CEO approve and sign a broad policy statement on energy management. An approved corporate policy confirms support for the energy management program and establishes the program’s legitimacy. Joining ENERGY STAR can also help secure CEO support.
To further ensure program stability, make sure there is a line item for energy in the budget.
Implementing a Strategic Energy Management System helps to formally establish a process for benchmarking, setting goals, developing action plans and tracking program results. The ability to track and measure program success is critical to continuous improvement, communicating results and ensuring the program’s positive impact on the organization.
To ensure program success, it is important to continuously maintain and build on the original foundation once an energy management program is off the ground.
The smart energy manager seeks to improve the energy management program by actively searching for new savings opportunities and tracking project results.
It is important for the energy manager to attend business meetings and make sure that the energy program is consistent with the company’s business plan and supports corporate goals and objectives.
The energy manager must make sure that everyone involved shares credit for program successes. This practice avoids “ownership” struggles and can increase program participation as “everyone wants to be part of a winning effort.”
Awards and Certificates of Excellence to employees from senior managers in recognition of their contributions to the company can boost employee morale and retain loyalty to the program.
ENERGY STAR partners should consider applying for the annual ENERGY STAR Award recognizing top performing companies for their superior efforts in energy management. The award provides winners national recognition and can be used to encourage further achievement in the future.
More people can be drawn into the energy management program through active training and education. The greatest achievements can be gained by involving everyone in the organization. Consider opportunities for professional certification.
Increase top management’s visibility in the program by inviting corporate officers to accept awards and present accomplishments at high profile industry and government conferences. This effort creates a sense of ownership for the corporate officer. Additionally, they can use the program to create media attention and positive PR for the company. The energy manager also profits by gaining a corporate champion who can further publicize program benefits among peers as well as a bigger internal audience.
Publicizing the results of the energy management program helps to integrate it into the corporate culture and foster company pride.
The energy manager and the energy management team must develop indicators that measure the financial and environmental benefits, as well as productivity improvements of the program that are understandable to everyone in the company. Program savings can be expressed using equivalent metrics. For example, energy savings can be presented as an equivalent amount of company product that would have to be sold to get the same financial gains (net profits). You can also measure the impact of the program by its effect on company earnings and shareholder value. ENERGY STAR provides a financial value calculator to help measure this impact.
Benchmarking energy performance can provide easily understandable metrics that can be shared throughout an organization. ENERGY STAR has tools and resources that can help a company track and benchmark energy performance and then communicate the results both internally and externally.
Use periodic reports to publicize the full benefits of the program to senior management.
Establish a unique identity for the program by developing a “brand name,” logo, stationery, etc. Consider developing awards that can be used “on the spot” for recognizing individual efforts.
Promote the program at a grass roots level by educating employees about ENERGY STAR and your company’s partnership with the U.S. EPA. You may also consider demonstrating basic energy technologies (e.g. compact fluorescent lamps) at company-sponsored family events, such as “Bring your sons and daughters to work day” and encourage employees to be more energy efficient at home. Often educating employees about energy efficiency actions they can take at home will have a carry-over effect at the workplace.
Communicate program results and successes through company newsletters and in the annual report. The energy manager may also wish to use business publications to showcase the results of the energy management program on a larger scale.
Active participation in industry and energy focused associations can provide a way to share program experiences and results, as well as learn from others. Speaking engagements at industry events also are a good way to share your company successes and motivate others to improve energy performance within their organizations.
Participation in ENERGY STAR presents an excellent opportunity for a company to benchmark itself against peers, reduce costs, polish its public image and gain recognition for its voluntary energy-efficiency activities.
ENERGY STAR ’s approach to energy performance and its unique communications opportunities allows program results to be easily rolled into corporate PR, community outreach, and EHS programs.
ENERGY STAR brings credibility to the company and its energy management program. Once a company wins an ENERGY STAR Buildings Label or an ENERGY STAR Award, it becomes an unquestionable symbol of their commitment to achieving excellence in energy performance.
ENERGY STAR can help an energy manager work with a team to create an energy management program that the entire company can be proud of. The energy manager will gain company recognition and win the respect of management. Winning support for innovative ideas in the future will be much easier.