FDs shouldn’t marginalise energy management

It is a somewhat bizarre situation. As far back as 2000, the European Commission’s Action Plan on Energy Efficiency indicated the need for specific measures in reducing energy consumption in the building sector. It came as no surprise given that buildings are major consumers of energy; around 40 per cent of final energy consumption in the European Community is via building usage.

Fast-forward to 2008 and there is no doubt that ticking the CSR box is now a key differentiator for many companies – if not a requirement to receive preferred supplier status. There is also no doubt that a comprehensive and well communicated CSR policy can help boost company reputation and therefore share value. Equally, the savings made by procurement departments also have a tangible impact on the bottom line. 

However, the lack of a strategic approach to energy management means that the average business is literally throwing away thousands of pounds per site every year.

A TAC audit of 500 locations across the retail, commercial, manufacturing, education, health, financial, leisure and Government sectors in the UK found scope to easily make more than £7.5 million worth of savings – an average of £15,500 per site.

With rising fuel costs and an increasing demand to meet green legislation UK companies are missing a trick by not putting in place energy strategies that go beyond corporate posturing over their green credentials. Businesses with an annual utility bill of more than £1m should seriously consider appointing their own ‘Energy Tsar’.

Unfortunately, there remains a fundamental problem in this approach – a very real – and very expensive ‘corporate disconnection’ between the facilities managers whose remit it is to manage costs, and the accounts department where energy bills are traditionally sent.

Only by putting energy management firmly on the board room agenda can we hope to plug the haemorrhaging cost of waste and carbon emissions.

*Garrie Naden is finance director at technology company TAC

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