Sustainable business equals profitable business: 5 questions for Ingersoll Rand
As climate change remains top of mind for global leaders, businesses continue to recognise a growing need to incorporate carbon strategies into their business plans. While the key driver for carbon strategies is to improve the environment, such programs also have positive impacts on business performance.
In fact, a study by the We Mean Business Coalition estimates that companies are achieving, on average, a 27 percent rate of return on their low carbon investments. Here to discuss the importance of carbon footprint management and energy efficiency solutions is Scott Tew, Executive Director of the Center for Energy Efficiency and Sustainability at Ingersoll Rand.
Why do you think organisations should continue to prioritise energy management?
At the most basic level, organisations and businesses should consider their role in fostering sustainability, especially as it relates to their contribution to energy consumption and greenhouse gas (GHG) emissions. Increasingly, the associated benefits and return on investment for managing energy use is also becoming clearer. ENERGY STAR reports that organisations can achieve 2-10 percent annual energy savings through energy management improvements such as energy efficiency solutions, including optimised compressed air and HVAC systems.
According to the American Council for an Energy-Efficient Economy (ACEEE), on a larger scale, fostering efficiency and lowering energy use also supports resiliency by improving reliability of power while keeping energy costs down in times of emergency and high demand. Not only do businesses improve their own resiliency through managing their energy use, but in doing so they also contribute to the overall resiliency of the surrounding infrastructure and grid system. For example, energy efficiency can help communities responding to severe weather events by providing a reliable energy supply and reducing overall electricity demands. In addition, energy efficient buildings that maintain comfortable temperatures can serve as shelter options for communities recovering from severe weather events, according to the ACEEE.
Why energy efficiency vs. other solutions?
There are many viable options for managing energy use and lowering GHG emissions, including investing in renewable energy sources, such as solar and wind, and implementing an internal carbon cap or tax. However, energy efficiency is often considered the low-hanging fruit of climate action strategies, given its low cost and overall ease of implementation. That said, organisations should consider all options and choose the solution that is best suited for their footprint, scope and goals. Depending on a business’ industry and location, different solutions may be more effective than others.
At Ingersoll Rand, energy efficiency is central to our business and the solutions we provide customers. We believe in energy efficiency as a means to cost savings and a whole host of benefits as it relates to our own operations, products and services. Nearly 90 percent of our product portfolio directly addresses the demands for greater energy efficiency with lower GHG emissions. In addition, energy efficiency in products leads to higher levels of comfort and control in built environments, advancing overall quality of life. We see examples of how energy efficiency is driving improvements in buildings, homes, industrial spaces and transportation markets around the world every day.
What is the biggest misunderstanding when it comes to energy efficiency?
The biggest misunderstanding about energy efficiency is that reduced energy costs are the only benefit. In fact, there are numerous benefits beyond energy savings. Energy efficiency also ensures that the energy that is used is more productive and, in addition, reduces indirect GHG emissions and pollution that leads to improved health, safety and comfort. An ACEEE report demonstrates this reach and reports that by 2030, the U.S. can avoid the output of a total of 800 power plants, thus saving 1 billion tons of annual carbon dioxide emissions with proper energy efficiency programs and policies in place. Reducing pollutants at this rate could also improve overall health, addressing issues like chronic lower respiratory diseases through improved air quality.
Moreover, energy efficiency in turn increases local grid resilience and can help support improved economic development. The U.S. economy is already feeling a shift on a large scale. In fact, the Sustainable Energy in America Factbook notes that there has been a 10 percent improvement in U.S. energy productivity over the past five years, meaning that the U.S. economy is using 10 percent less energy to power each unit of growth.
What are organisations already doing today to advance efficiency? Any best practices?
As a whole, the industry is increasingly taking advantage of energy efficiency programs. The same recent Sustainable Energy in America Factbook suggests that such program spending has nearly tripled since 2007. This is significant growth, and organisations are increasingly making efficiency a priority and a commitment. For example, the U.S. Department of Energy’s Better Plants Program, a program that provides resources for industrial manufacturers to improve energy efficiency, asks participants to set a goal – typically to reduce energy intensity 25 percent over a 10-year period across all their U.S. operations. Because of these commitments, Better Plants partners – nearly 180 industrial companies, including Ingersoll Rand – have saved more than $2 billion in energy costs and avoided more than 500 trillion British thermal units (TBtu).
Tell us what the future might bring for this space.
As organisations evolve and weave sustainability into their core business, energy efficiency should continue to rise in prominence as an important part of an energy management strategy. On a global level, the United Nations Sustainable Development Goals is a great platform to guide us as we look to the future. In fact, Target 7.3 is centered on doubling the global rate of improvement in energy efficiency by 2030. Achieving that goal will require an increase in commitment, partnerships and progress around the globe. Given the numerous benefits associated with adopting energy efficient practices, we should expect this to play a key role in many sustainability programs, regardless of a business’ industry or location.
Edited by Tom Wadlow.