Why Should Companies Have an Energy Management Strategy?
Leaders realize that a good strategy is needed to control critical resources to gain and maintain competitive advantage. The efficient utilization of available resources has always been at the forefront of corporate strategy to cut costs, and to increase profitability. It is now inevitable that leaders will also need to factor in emission levels to all of the facets of business management, especially in energy intensive industries such as automotive, cement, pulp and paper, glass, and chemical. A top-down, bottom-up energy management strategy can lead to finding significant efficiency opportunities, as documented in case studies for programs such as the Energy Star, Superior Energy Performance, and documented in management research literature.
The results are in: Investments in energy efficiency are a win-win-win situation for investors, stakeholders, and the environment. The main objective of an organization is to be profitable by the sale of goods or services. Leading companies are now realizing significant cost-cutting opportunities by implementing short and long-term energy management strategies. For example, by implementing an energy management system DOW Chemical realized 17.9% reduction in energy use. Volvo Trucks of North America on the other hand achieved the platinum level of Superior Energy Performance (SEP) certification by improving energy performance by more than 25.8 % during the three-year period after establishing an energy baseline. Volvo attributes $1.4Million USD savings to SEP, with a $ 377,000 investment, which is a 3.4 month payback on investment. According to the Department of Energy, Cook Composites, a chemicals company, realized 14.9% or $ 250,000 annual savings with no capital investment. In addition, the DOE Save EnergyNOW program results showed that Freescale Semiconductor reduced annual energy consumption between 2006 and 2009 resulting in $ 2 million savings each year.
Energy efficiency programs must have top-level management commitment. Barriers to improving energy efficiency due to lack of information, limited awareness of the financial or qualitative benefits, inadequate skills, capital constraints, and corporate culture are diminishing by the proven results from early adapters of energy management standards. Companies that have an energy management strategy supported with an energy management system such as ISO 50001 or SEP are seeing significant results with little or no capital investment. The most important part of this new development is that these initiatives are truly sustainable energy programs that are ingrained into the company culture.
Mr. Cem O. Onus is a doctoral candidate for International Business at Walden University, with research focus on Energy Efficiency in the US automotive manufacturing industry. He is a business development manager for DEKRA Certification in North America for their management system certification services including ISO 50001 and SEP training and certification, in addition to traditional ISO 9001, 14001, and sector specific standards certification. DEKRA is a global certification body with 28,000 employees worldwide. DCI is a U.S. based accredited certification body for international management systems. The company is part of the global footprint of DEKRA Certification Group headquartered in Stuttgart, Germany. DCI is a multi-accredited certification body covering all management system business line activities for North America, with a global service capacity. DEKRA offers services for ISO 9001 (quality), ISO 14001 (environment), AS 9100c (aviation, space and defense), TL 9000 (telecommunications), SEP (Superior Energy Performance) and ISO 50001 (energy management) along with auditing services to many other management standards, including customized supplier assessments.
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