Risk & Economy » Regulation » CFOs must lead energy efficiency

Chief financial officers should take responsibility for
driving energy efficiency and for creating a financial strategy to tackle energy
wastage, according to research outfit Verdantix.

Verdantix believes CFOs need to take control of energy use as prices spiral
upwards in response to an energy supply gap in the UK. Electricity bills in
future are likely to include carbon costs and legislation to curb energy
consumption with the introduction of upcoming legislation including the Carbon
Reduction Commitment, which forces larger companies to pay for carbon emissions
related to energy.

The Energy Efficiency Imperative report by Verdantix suggests responsibility
for energy consumption reduction should belong to the CFO but agrees this will
not be easy. To help, it has analysed 30 efficiency products and services and
identified 15 strategies CFOs should prioritise for investment.
The research team looked at energy efficiency solutions that:
• Report and analyse energy consumption
• Optimise voltage and improve electrical supply quality
• Increase control of energy consuming assets
• Improve the energy efficiency of assets, and
• Consume less energy than the assets they replace.
The research put forward compelling arguments for the CFO to bring energy
efficiency under their remit. Examples include Tesco, which saved £600m over
eight years through an efficiency programme and Aviva, which achieved a 20% to
300% return on investment over the lifecycle of its energy reduction plan.

The report looks at four of the usual suspects when it comes to energy and
carbon management: energy efficiency, on-site generation, green electricity and
voluntary offsets. They are pitted against each other to find if they can
improve sustainability, reduce cost and mitigate risks.

Energy efficiency ticks all three boxes. Both on-site generation and green
electricity managed to only improve sustainability.

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