UK executives need to change attitudes to energy efficiency

Nanpu Bridge and Helix. Shanghai, China, at night
Leading attitudes: businesses need to approach energy efficiency from the top down Credit: Getty

A culture shift led from the top of businesses is needed to transform attitudes to energy efficiency, according to an expert delegate group at a roundtable session hosted by the Telegraph. Oliver Pickup reports.

A “collective lack of ownership at senior level” is the central reason UK businesses are failing to fully realise the financial and environmental benefits of sustainable approaches, according to David Lewis, managing director of Matrix Control Solutions, E.ON’s business energy efficiency experts.

“The problem is that it gets put in the ‘operational costs’ bucket, which is then delegated down through the business, with the assumption that someone else will be looking after it,” he noted in his keynote address at the third and final roundtable event hosted by Telegraph Media Group last month, in partnership with energy company E.ON.

Research by the Telegraph and YouGov reveals that about half of business leaders do not understand how their business pays for energy, who is responsible for the budget, or if they are getting a good deal on the money they spend.

With wholesale energy markets continuing to rise, this needs to change, and all nine expert delegates at the two-hour discussion – “Hard numbers: how can businesses unlock the direct business value of sustainable approaches?” – agreed a culture shift is needed that must begin at the top.

Executives have failed to engage with energy costs by misunderstanding just how much they could be savingDavid Lewis, MD of Matrix Control Solutions

“The attitude should be: this is a big issue for me, I’m going to take ownership at a very senior level,” said Mr Lewis. “I don’t see that happening often at all.”

Executives have failed to engage with energy costs by misunderstanding just how much they could be saving, he noted. A key issue was that the language of energy is complicated and dissociated from the concepts of profit and loss that concern most businesses. “You gain most traction when you can demonstrate the financial value [of sustainable approaches] to a CFO,” said Mr Lewis. But thanks to pressures on finances across the economy, “I can honestly say I’ve not sold any individual service to a customer purely because it saves energy, for about four years”.

One retailer’s strategy was held up by Mr Lewis as an all-too-rare example of how a long-term commitment to sustainability can generate significant rewards – shaving a third off the business’s energy bill since 2007.

“It sees this as a core part of its identity, and by having that high-level, senior sponsorship it runs all the way through the business,” he said. “And because of the strength of corporate volume it has, it can really drive that behaviour, and influence the whole of the supply chain.”

Progressive businesses... create the position of an energy manager

But this is an outlier and for other businesses, the delegates suggested, the word “sustainability” could be to blame. Charles Malissard, policy and public affairs manager for Smart Energy GB, said: “The word is contradictory. What we are really talking about is not the ability to sustain, rather the necessity to change.”

Using the correct language is crucial for Mr Malissard, whose company is in charge of communicating the nationwide smart meter rollout, with 53 million devices to be installed by the end of 2020. The government-backed scheme will revolutionise the energy supply market by digitalising data – delivering the real-time costs of a consumer’s use in “pounds and pence... rather than talking to them about kilowatt-hours and generation loads”, which are a turn-off.

Shifting how energy is perceived could have repercussions beyond simple efficiency gains. “As long as we think energy is a commodity, it means energy is a cost. And if it is a cost, we are in the dark,” he said. But if businesses saw energy as a service, it presented opportunities for efficiencies and savings at great scale.

Winds of change: if companies see energy as a service, there are opportunities for great savings Credit: Getty

What progressive businesses seeking enlightenment about energy costs do first is “create the position of an energy manager” to lead on pushing savings through, said Carlos Bernal, of real estate owner Intu Group. Since being appointed energy manager in September 2015 he has saved his company 40pc in energy costs and has shifted the collective mindset on energy savings. He is even having to turn down some executives’ less profitable green ideas. “However, the easy wins, such as LEDs, which have saved Intu about 30pc on lighting costs, are great tools to gain engagement with high management.”

James Tiernan, group energy and environment manager at the university accommodation business Unite Students, said the best way to bring energy up the corporate agenda is a blanket approach, and plenty of patience. “People need to see something tangible to change, in the form of an incentive [that is] financial or environmental,” he said. Unite’s 44,000 rooms were run with efficiency as a priority, but comfort could not be compromised. So a conversation about energy-efficient lighting with a local manager had to be planned differently to one with developers about cutting-edge heating systems.

Conversations often demanded compromise and understanding with a patient education period. Mr Tiernan advocated a multipronged attack to target behavioural change nationally, locally and individually. But getting results took time. “None of our approaches work in isolation, which is why we run all three.”

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