▲ Investing in energy conservation makes business sense: According to ASHRAE, energy is the second highest retailer operating expense. A new white paper by the Retail Leaders Industry Association (RILA) and Schneider Electric notes that recent weather extremes have increased energy costs for retailers, and the trend is expected to continue. Factor in potential electricity price increases in the near future, and increases in energy costs could be significant. Making stores more energy efficient mitigates the risk of energy-related cost increases, while also helping the environment.
▲ Energy is a strategic asset and should be managed that way: Deploy energy management systems that track and measure energy consumption and develop processes for continuous improvement.
“It’s also important to communicate the value of energy management and reduction across the organization — from senior-most executives to the front-line associates,” said Adam Siegel, VP sustainability and retail operations, RILA.
▲ Effective energy management hedges against uncertainty in costs: Energy prices have a direct impact on a com-pany’s profitability. They frequently fluctuate based on service territory demand and can spike during unanticipated weather events, making energy budgeting requirements highly variable, according to Siegel.
“Minimizing energy use reduces the susceptibility to these price fluctuations,” he said.
▲ The cost of energy is complex: Using an expert to procure energy can help control, or even lower, a company’s energy bills with no other investment. And once an investment in energy efficiency is implemented, the initiative needs to be periodically checked to ensure a continued ROI.
▲ Sustainability is good for the bottom line: According to RILA, 50% to 80% of retail sustainability activities provide reduced costs, brand enhancement and risk management, as well as numerous fringe benefits.
▲ Finance’s sustainability role is on the rise: In a Deloitte Touche study, 26% of CFOs from large companies indicated they had sustainability authority, up from 17%. Nearly two-thirds of these finance chiefs expect their involvement to increase by the end of 2014.
▲ Operational benchmarking is key to unlocking higher performance: Benchmarking for sustainability involves analyzing your operations site-to-site and measuring your performance against peers, and it is increasingly required by law, noted Patrick Leonard, manager, portfolio services practices, PMP, LEED AP, Paladino and Company.
Two states (California and Washington) and eight major cities (New York City; Philadelphia; Washington, D.C.; Minneapolis; Boston; Austin; Seattle; and San Francisco) require commercial property owners to disclose and benchmark utility energy consumption (and sometimes water also), with the goal of highlighting the opportunity to improve efficiency.
“Even if not required by law, benchmarking is a useful first step in analyzing where to invest the time-improving performance in your organization,” Leonard said.
Professional investors are increasingly factoring sustainability into governance policies, portfo