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.
UK must stop blundering into high carbon choices warns CCC
The UK Government must end a year of climate contradictions and stop blundering on high carbon choices, according to the Climate Change Committee as it released 200 policy recommendations in a progress to Parliament update.
While the rigour of the Climate Change Act helped bring COP26 to the UK, it is not enough for Ministers to point to the Glasgow summit and hope that this will carry the day with the public, the Committee warns. Leadership is required, detail on the steps the UK will take in the coming years, clarity on tax changes and public spending commitments, as well as active engagement with people and businesses across the country.
"It it is hard to discern any comprehensive strategy in the climate plans we have seen in the last 12 months. There are gaps and ambiguities. Climate resilience remains a second-order issue, if it is considered at all. We continue to blunder into high-carbon choices. Our Planning system and other fundamental structures have not been recast to meet our legal and international climate commitments," the update states. "Our message to Government is simple: act quickly – be bold and decisive."
The UK’s record to date is strong in parts, but it has fallen behind on adapting to the changing climate and not yet provided a coherent plan to reduce emissions in the critical decade ahead, according to the Committee.
- Statutory framework for climate The UK has a strong climate framework under the Climate Change Act (2008), with legally-binding emissions targets, a process to integrate climate risks into policy, and a central role for independent evidence-based advice and monitoring. This model has inspired similarclimate legislation across the world.
- Emissions targets The UK has adopted ambitious territorial emissions targets aligned to the Paris Agreement: the Sixth Carbon Budget requires an emissions reduction of 63% from 2019 to 2035, on the way to Net Zero by 2050. These are comprehensive targets covering all greenhouse gases and all sectors, including international aviation and shipping.
- Emissions reduction The UK has a leading record in reducing its own emissions: down by 40% from 1990 to 2019, the largest reduction in the G20, while growing the economy (GDP increased by 78% from 1990 to 2019). The rate of reductions since 2012 (of around 20 MtCO2e annually) is comparable to that needed in the future.
- Climate Risk and Adaptation The UK has undertaken three comprehensive assessments of the climate risks it faces, and the Government has published plans for adapting to those risks. There have been some actions in response, notably in tackling flooding and water scarcity, but overall progress in planning and delivering adaptation is not keeping up with increasing risk. The UK is less prepared for the changing climate now than it was when the previous risk assessment was published five years ago.
- Climate finance The UK has been a strong contributor to international climate finance, having recently doubled its commitment to £11.6 billion in aggregate over 2021/22 to 2025/26. This spend is split between support for cutting emissions and support for adaptation, which is important given significant underfunding of adaptation globally. However, recent cuts to the UK’s overseas aid are undermining these commitments.
In a separate comment, it said the Prime Minister’s Ten-Point Plan was an important statement of ambition, but it has yet to be backed with firm policies.
Baroness Brown, Chair of the Adaptation Committee said: “The UK is leading in diagnosis but lagging in policy and action. This cannot be put off further. We cannot deliver Net Zero without serious action on adaptation. We need action now, followed by a National Adaptation Programme that must be more ambitious; more comprehensive; and better focussed on implementation than its predecessors, to improve national resilience to climate change.”
Priority recommendations for 2021 include setting out capacity and usage requirements for Energy from Waste consistent with plans to improve recycling and waste prevention, and issue guidance to align local authority waste contracts and planning policy to these targets; develop (with DIT) the option of applying either border carbon tariffs or minimum standards to imports of selected embedded-emission-intense industrial and agricultural products and fuels; and implement a public engagement programme about national adaptation objectives, acceptable levels of risk, desired resilience standards, how to address inequalities, and responsibilities across society.
Drax Group CEO Will Gardiner said the report is another reminder that if the UK is to meet its ambitious climate targets there is an urgent need to scale up bioenergy with carbon capture and storage (BECCS).
"As the world’s leading generator and supplier of sustainable bioenergy there is no better place to deliver BECCS at scale than at Drax in the UK. We are ready to invest in and deliver this world-leading green technology, which would support clean growth in the north of England, create tens of thousands of jobs and put the UK at the forefront of combatting climate change."
Drax Group is kickstarting the planning process to build a new underground pumped hydro storage power station – more than doubling the electricity generating capacity at its iconic Cruachan facility in Scotland. The 600MW power station will be located inside Ben Cruachan – Argyll’s highest mountain – and increase the site’s total capacity to 1.04GW (click here).
Lockdown measures led to a record decrease in UK emissions in 2020 of 13% from the previous year. The largest falls were in aviation (-60%), shipping (-24%) and surface transport (-18%). While some of this change could persist (e.g. business travellers accounted for 15-25% of UK air passengers before the pandemic), much is already rebounding with HGV and van travel back to pre-pandemic levels, while car use, which at one point was down by two-thirds, only 20% below pre-pandemic levels.