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Can organisations keep energy costs manageable while still reducing carbon levels?

In this post, we summarise a report, Finding a Cost-effective Path to Net Zero by Centrica Business Solutions which examines if it is possible for businesses to keep energy costs manageable while still achieving their decarbonisation goals.

 Who are Centrica Business Solutions?

Extract from Centrica’s the website “We’re supporting the journey to net zero, with energy services and supply options that help organisations to balance the demands of planet and profit. We’re also building our own grid scale solar farms and battery storage assets” and “Centrica Business Solutions is part of Centrica plc, an international FTSE 100 listed energy services and solutions  company that’s focused on helping businesses and households to live sustainably, simply and affordably”

Aim of the Report: The report summarised the results from a survey of businesses in the UK, Ireland, Italy, Hungary and The Netherlands. It aims to give an answer to the question: are energy cost control goals at odds with sustainability goals?

Key Findings

Biggest Risk facing organisations:

Financial risk 44%

Energy security 40%

Cost is more important than sustainability right now and any energy improvement decisions will depend on how much cost savings could be expected due to this improvement.

 Investors and Shareholders Views on Renewable energy

Despite this, 52% of respondents agreed that investors and shareholders are more in favour of renewable energy than in previous years and consider it more financially risky not to pursue sustainable goals.

John Petre, Supply Chain, Procurement & Technical Director in the Executive Leadership Team at cereal manufacturer Weetabix believes that cost reduction and sustainability are complementary goals. “As a good business striving to improve your performance, you always want to be driving efficiency and using less energy is a part of that. Clearly, using less energy also has a sustainability benefit.”

Need for Accurate Data and Analytics

Organisations need very accurate data and analytics about their energy usage and how energy can be saved. If this data is available, a business case can be made for investing in renewable energy and/or decarbonisation technology.

 Financial Pressure and Long-term Goals

Short-term financial pressure can cause businesses to abandon long-term goals, such as sustainability goals. However, 48% of respondents believe that consumers want and are willing to pay more for sustainable goods, despite the cost of living crisis. Therefore, businesses need to consider both goals.

Energy Managers are Required

Given how important actions on sustainability are, organisations are creating Energy Manager roles and the report lists skills that an energy manager should possess.

Leveraging the Supply Chain to Assist in Achieving Sustainable Goals

49% of respondents agreed that they consider how well a supplier can help them achieve their sustainability goals when choosing suppliers.

Recommended Action steps

  • Make carbon reduction part of the supplier selection criteria and part of the contract.
  • Refocus on decarbonisation goals if they have been sidelined.
  • Identify and act on actions required for regulatory compliance
  • Make sure the staff member responsible for energy management has enough resources and support.

Financing Sustainable Investment

Bank loans and private equity are used by 48% of respondents to fund improvements. 50% of respondents say that sustainability initiatives help them to secure green financing. Energy improvement investments can boost organisations’ ESG ratings, which in turn can secure more favourable loan agreements.

The report recommends exploring a broad range of financing and or/cost saving options, including Power purchase agreements (PPAs), energy as a service and financing sustainability projects as operating expenditure instead of capital investment and/or engaging outside energy consultants for expert advice.

Most adopted sustainable investments

  • Installation of solar panels onsite 40%
  • Ground, water or air-source heat pumps 36%
  • Battery storage units 35%

Conclusion

The report concludes that cost reduction and sustainability goals are not just complementary but that it pays to be sustainable. You can read the full report here.

Need help with Sustainable Packaging?

We can help you in a number of ways, including using sustainable boards and/or using a plant-based window film, reducing the weight or size of your cartons and/or a change from plastic to cardboard packaging. Contact us today at mailto:sales@dollard-packaging.ie or on 01- 847 00 44

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