Energy costs are at an all time high. They will continue to go up. The price of petroleum may indeed fluctuate, but within ever higher ranges. $125 a barrel oil will climb to $135-150. This is creating a convergence for businesses in that the traditional business owner or CEO has long believed that ‘going green’ was an endeavor contrary to the standard operation of business.
I speak to 2-4 groups of CEOs every month. As a futurist, I am increasingly being asked by these groups about what the future of energy looks like as most businesses are getting whacked by the dramatic rise in energy prices. When they hear that high energy prices are the new normal, they groan. I immediately launch into strategies that they can immediately implement that will not only lower costs, but will also mobilize employees and allow them to promote to customers and suppliers that they are being green. A number of CEOs have started to act on these recommendations.
The first thing to do is to conduct an energy audit, usually provided by the local energy company, and if not them, then an energy audit firm. Establish the baseline of energy consumption on an annual basis for every facility. The next step is to mobilize the employees to help lower energy use. For example, if a company spent $100,000 last year on electricity, set the goal of $85,000 for this year. Present this to the employees that the company wants to do its’ part in the effort to slow global warming by lowering energy consumption. State that the company will split savings 50/50 with the employees. So, if electric costs are lowered by $15,000 then $7,500 will go to the employees as a year end ‘conservation bonus’. The company will save the same amount. It will amazing how much more lights will get turned off when people leave rooms. I promise the CEOs that they all have someone at the company that will immediately get involved and work to mobilize the other employees. Heads nod knowingly.
The second thing to do is to analyze transportation. See how mileage can be lowered for both company business and the commuting of employees to work. Allow those that oversee transportation to suggest ways to conserve on gas expenditures.
The third thing to do is consider how the company schedules its activities. There are many companies that can, and have, gone to a four day work week with extended hours per day. This obviously lessens gasoline consumption and also electric consumption. An alternative to this is to allow people to work from home using high speed internet connections.
The fourth thing to do is to analyze how cost savings can be made by changing production and ingredients. There was a story elsewhere here at Scientific Blogging that details how the Six Sigma practice to lower defects in manufacturing can be used to help companies go green.
There will be three distinct positive outcomes if a company decides to go down this path of conservation. First, there can be a real lowering of costs, something essential in a marketplace of ever rising energy costs. Second, the employees, particularly those that have developed a strong environmental consciousness, will have a much better feeling about the company and will be happier at work as personal and corporate philosophies will become more aligned. A study in 2007 found that 88% of college graduates that year consider environmental policy in choosing where to work. Third, the company can let customers and suppliers know that the company is doing its part to become ever more green and environmentally conscious. All three of these developments will feed on each other and there will be other, beneficial consequences.
Energy scientists suggest that conservation is the single most important thing to do until we can replace fossil fuels with renewable, alternative forms of energy. It is projected that energy consumption, and therefore costs, can be cut by 20% through aggressive efforts at conservation. There is no reason to wait.