Post-Copenhagen: rewards for companies who save energy

04.12.09

The drive to reduce carbon is an opportunity to cut energy costs that organisations should not pass by. Climate Change is now firmly on the global and boardroom agenda- once governments have finished furiously debating in Copenhagen against the problem, they will be looking even more to businesses to help meet future reduction targets.

Businesses should look at this as a great opportunity to improve their bottom line performance, and at the same time boost their green credentials and it is not often that a company gets the chance to keep their head of investor relations and financial director happy at the same time.

Research has shown that improving energy efficiency will provide half of the emissions reductions needed to prevent the Earth warming by more than 2 degrees- the general international consensus for a manageable level of climate change. It also highlights the fact that energy efficiency techniques are the only technologies with a material impact in terms of emissions reductions that can actually save money.

Quick paybacks on energy reduction investments

As energy prices continue to soar, the savings will only get bigger and bigger. Wholesale electricity prices have more than doubled in the last 12 months which has put a huge strain on British business in already financially difficult times. However, it only takes between 12 to 18 months for a mid-sized organisation to make its money back with an integrated energy and carbon reduction programme. And the quicker the energy prices rise, the quicker the payback time. As David O’Reilly, the chief executive of oil and gas giant Chevron, has said, energy efficiency is the cheapest form of energy we have.

While the economic rewards of energy efficiency measures are attractive, they should also be encouraged by government initiatives that help businesses get started on their low-carbon journey; interest-free Carbon Trust Loans, upcoming CRC legislation and Smart-meter roll out are sure signs that the government is taking steps to address energy issues, but businesses also need to be sure that they keep up and not lose out when such environmental legislation is implemented.