From Shop Floor to Top Floor: Best Business Practices in Energy Efficiency
In the last decade, rising and volatile energy prices coupled with increasing concern about climate change and growing support for action on energy and environmental issues has driven a surge of corporate environmental commitments. Energy efficiency has emerged as a key component of these commitments. Leading firms that give greater attention to energy efficiency report billions of dollars in savings and millions of tons of avoided greenhouse gas emissions, according to Pew Center’s report “From Shop Floor to Top Floor: Best Business Practices in Energy Efficiency.” This report documents leading-edge energy efficiency strategies, describes best practices, and provides guidance and resources for other businesses seeking to reduce energy use in their internal operations, supply chains, and products and services.
The report was developed over nearly two years of effort, including a detailed survey of the Pew Center’s Business Environmental Leadership Council (BELC) members and other leading companies, in-depth case studies of six companies, a series of workshops on key energy efficiency topics, broader research in the corporate energy field, and development of a full-featured Web portal to provide a platform for highlighting and updating key findings from the project as well as providing tools, resources, and other important information. The project was funded with generous support from Toyota.
Full Report (Download pdf)
Executive Summary (Download pdf)
- Dow Chemical (Download pdf)
- United Technologies Corporation (Download pdf)
- IBM (Download pdf)
- Toyota Motor Engineering & Manufacturing North America (Download pdf)
- PepsiCo (Download pdf)
- Best Buy (Download pdf)
Press release (click here)
Audio of teleconference on the report (click here)
Dow Chemical has saved about $8.6 billion in energy costs since 1994. IBM overachieved on a 3.5 percent annual energy savings target, instead hitting 6.1 percent in 2008, saving millions of dollars in the process. And United Technologies Corporation met an original 25 percent energy efficiency target five years ahead of schedule, reset the target to 40 percent, and blew past it to achieve a 56 percent efficiency improvement by 2006.
How did these companies do it? What lessons can we draw from their extraordinary efforts? Can their successes be replicated across the broader economy?
These questions form the basis of our ongoing research project on corporate energy efficiency strategies. Findings from the study, titled “From Shop Floor to Top Floor: Best Business Practices in Energy Efficiency,” will be released April 6, 2010, at the start of a two-day conference in Chicago. The conference offers an unprecedented opportunity to hear directly from dozens of business executives who have successfully guided their companies to world-class energy savings. Registration is open now; don’t miss the opportunity to sign up for the special early bird rate of $600 for the two-day conference. Keynote speakers and panelists will be announced in the coming weeks. Also check out the conference ad in the Nov. 12 edition of The New York Times.
“Kick the grocery bag habit, turn the thermostat down, change just one in four bulbs to CFLs, and drive smarter,” that’s my advice in a nutshell as I travel around the country talking to people about saving money and saving energy through the Make an Impact program. Now, a great new study by David Biello in this month’s Scientific American backs this message up: “33 simple actions—ranging from improving the insulation to carpooling—could cut those annual carbon emissions by 123 million metric tons. That savings would more than entirely offset emissions from petroleum refineries, iron and steel works, and aluminum smelters combined.” Those aren’t small numbers and could represent as much as 7 percent of our emissions. There really is a role for the little guy in tackling the challenges of climate change.
For the last year we’ve been holding workshops and talking with communities about simple steps we can each take to save money, save energy, and save the planet along the way as part of The Make an Impact program (www.alcoa.com/makeanimpact or www.entergy.com/makeanimpact). Make an Impact is an education and action partnership between the Center and two thought-leader companies, Alcoa and Entergy. The program’s cornerstone is a website that anyone can visit, filled with non-biased, science based tools and information about reducing personal energy consumption. Those who try its carbon calculator will even get customized tips for improving their energy use choices. Originally designed to help employees, the website, tools and workshops have grown to include communities where partners have operations and their customers.
This weekend marks the conclusion of the Solar Decathlon on the National Mall in Washington, D.C., a competition sponsored by the U.S. Department of Energy in which 20 college teams from around the world challenge one another in the high jump, pole vault, and other various athletic feats while dressed up as flaming balls of gas.
Okay, that’s not quite right: the Decathlon is indeed a competition among 20 college teams from around the globe, but rather than throwing javelins or jumping hurdles, these students compete to design, build, and run the most energy-efficient solar-powered house they can. Teams spend nearly two years designing and constructing their homes, which are then shipped to D.C., assembled on the Mall, and judged in ten different categories ranging from architectural excellence to market viability to engineering. The ultimate result is that a village of the future sprouts up in the middle of the U.S. capital almost literally overnight, and when the homes are not being judged, visitors are free to stroll through them and learn about their innovative features.
As energy prices continue to swing and the prospects for carbon constraints grow, it’s no wonder more and more companies are focusing their efforts on energy efficiency. But while most firms recognize the benefits of energy efficiency, many lack the information and resources required to take their efficiency programs to the next level.
To help provide these resources, we have launched a web portal with tools and information to help companies develop stronger energy efficiency strategies. The key feature of the portal is a searchable database of the energy efficiency activities undertaken by the 45 companies in the Center’s Business Environmental Leadership Council (BELC).
Also included on the web portal are results of our recent survey distributed to 95 major corporations that offer key insights for those exploring best practices in corporate energy efficiency. These include:
- Firms recognize the energy paradigm is changing rapidly.
- Companies are responding by establishing corporate-wide energy efficiency targets.
- Senior management support is critical in the development and implementation of energy efficiency programs.
- The most common challenge companies face in pursuing efficiency gains are resource constraints, especially limits on capital.
- Employee engagement is an effective, but possibly underutilized strategy for improving energy efficiency.
- Energy efficiency can be a gateway to wider business innovation.
The portal and survey are part of a larger research project that seeks to document and communicate best practices in corporate energy efficiency strategies across the following categories: internal operations, the supply chain, products and services, and cross-cutting issues. The next step of the project is the release of a comprehensive report summarizing our findings at a major conference in Chicago, April 6-7, 2010. The project is funded by a three-year, $1.4 million grant from Toyota.
On June 23, 2008, the New York Public Service Commission approved the Energy Efficiency Portfolio Standard (EEPS). The EEPS will reduce electricity consumption 15 percent below projected levels by 2015, equivalent to a 7.5 percent reduction from current levels. In contrast, if existing trends continue unabated, electricity use in 2015 in New York is expected to increase by 11 percent.
The EEPS will stimulate investment in energy efficiency by promoting currently available technologies, such as compact fluorescent light bulbs, solar hot water heaters, and insulating wraps for hot water tanks. It also authorizes incentives to encourage the purchase of energy efficient appliances, such as boilers, furnaces, air conditioners, and clothes washers. In addition, the EEPS will provide weatherization services for low-income households, energy retrofits for small businesses.
Order establishing EEPS
State Energy Efficiency Resource Standards