With the current energy crisis showing no sign of subsiding, it’s more important than ever for businesses to consider their strategy – not just to meet the current global power crisis but to take advantage of clean energy’s many benefits.
Why you need an energy strategy
Energy represents a significant ongoing cost to businesses of all sizes. Whether you’re operating physical offices, manufacturing goods, running fleets, or powering data centres, the cost of electricity, gas and oil has rocketed and shows no signs of subsiding.
The current energy crisis may have been escalated by the war in Ukraine, but it is also being driven by the need for clean energy. Businesses investing in clean energy will become part of the UK’s net-zero carbon future. This offers several potential benefits; reputational, cost-savings, and environmental. Let’s look at the main reasons to get your energy strategy right:
1. Reputation and CSR
Customers and employees want to be associated with a green company that cares about the environment. This means demonstrating that you are making clear and meaningful steps to move away from damaging fossil-fuel use towards clean energy alternatives. By having a clear energy strategy that lays out your plans to achieve a net-zero carbon operating model, customers will see that you are serious about supporting the environment and be far more inclined to spend their money with you. This is particularly the case if your business is in B2B markets or in a higher-margin B2C market, where customers will vote with their wallets when it comes to their values. If you’re serious about your corporate social responsibility strategy, then your energy strategy needs to be an underpinning enabler of your core values, purpose and goals.
It’s also worth noting that the reputational benefits of investing in clean energy as part of a broader environmental and sustainability business plan extend to your employees, customers, partners, funders and other stakeholders. Talented individuals want to work for businesses that share their values – particularly millennials and Gen Z employees. By showing that you are committed to sustainability and environmentalism, you can attract the best employees to your business in a highly competitive talent market – building a powerful employer brand.
2. Cost-savings for the longer term
By investing in clean energy, your business can achieve substantial cost savings. Energy costs have long been a substantial recurring cost for businesses, and the current energy crisis means they have rocketed – providing an endless headache to business owners. Global instability also translates into price instability for business customers, making it almost impossible to forecast future business operating costs. By investing in clean energy, such as on-site biomass or solar, or by entering into contracts for clean wind energy and similar projects, businesses can secure competitive energy prices, have a reliable energy supply, gain certainty over future costs and also benefit from additional funding, incentives and grants in some cases.
How to create a business energy strategy
Your business energy strategy can and should be developed as part of your overall business strategy. You might assign its governance and delivery to a single senior business owner or share key deliverables amongst different departments but with a clear director-level owner. Your strategy will probably look to achieve two things; a move towards renewables and an overall reduction in business-wide energy consumption.
For example, your strategy could include concrete plans to move away from damaging fossil fuels and towards a cleaner fuel source. This could mean investing in on-site renewable energy generation – something many businesses are doing – or buying clean energy sources from commercial providers.
Support and information
Some publicly funded organisations help businesses identify environmental objectives within their business. They provide access to funding, grants and other sources of support that might be available to achieve these goals. A good place to find these support services is via your local Chamber of Commerce or business support organisation. Your existing business energy supplier may also have information about switching to clean tariffs, investing in your on-site clean generation and other measures to improve insulation (which reduces energy consumption.)
The government’s recently published 10-point national energy strategy is also a good resource for background, messaging, and context.
Next Steps
Your business can consider other linked measures too that reduce energy usage as part of a linked strategy to reduce usage and switch away from fossil fuels. For example, you could implement measures to automatically power-down devices and office lighting at the end of the day, use cloud computing services to remove the need for on-site and energy-intensive servers and datacentres, reduce your fleet and introduce logistics optimisation software, encourage homeworking to reduce commuting and similar measures. Engage your employees for their ideas and input, as you’ll probably find that this is a topic that inspires high levels of motivation, support and enthusiasm amongst your workforce.
Once you have your energy priorities, then manage, track and measure them like any other business strategy KPI – with clear owners, SMART goals and ongoing tracking to further refine and adjust your goals and progress over time.
Now is the right time to consider your business energy strategy, so why not add it as a focal discussion point to your next high-level strategy meeting?
