Much is being said and written about the “energy transition.” But what is it? What needs to change? What does an energy transition mean when using energy is so crucial to our businesses and activities?
Understanding the energy transition is one thing. Being able to take advantage of it is another. This is why we outlined an easy-to-understand, 10-step process for organizations to appreciate and take advantage of the benefits of embracing the energy transition.
Environmental sustainability is driving the energy transition
Burning fossil fuels emits carbon dioxide into the atmosphere, acting like a blanket to keep Earth’s heat from radiating into space. As global average temperatures go up, the risks of climatic disruption and severe weather events greatly increase.
Organizations that recognize the importance of operating within a stable environment are attracted to effective energy and carbon emissions management. They see that mitigating global climate risks can yield substantial business benefits:
- Improved financial performance: Procuring and using energy costs money. Carbon and energy planning avoids costs and bolsters the bottom line.
- Reduced regulatory risk: Governments in jurisdictions around the world have introduced regulations and requirements for financial climate disclosures. With proper data collection and reporting, businesses can take informed steps to reduce tax and regulatory exposure.
- Meeting stakeholder expectations: Customer requirements for lower carbon emissions are altering supply chains. Managing energy for lower carbon emissions helps businesses maintain their competitive edge.
Three key components to the energy transition
A satisfactory energy transition will result in society continuing to get needed energy services without emitting more carbon dioxide into the atmosphere.
Three components are needed to decarbonize emissions from our energy systems:
- Energy efficiency: A major reduction in energy waste substantially increases energy productivity.
- Electrification: Electricity can provide energy services such as heating and transport in place of fossil fuels like coal, natural gas, diesel and gasoline.
- Renewable energy: Electricity can be generated from energy sources that don’t emit carbon, such as solar, wind and hydro power.
Executives must navigate three key areas of the energy transition
To effectively navigate through the energy transition, business leaders must successfully master three key issues:
- Strategy: Provide strong, strategic, visible and continuing management support for energy transition initiatives.
- People: Identify, train and support the necessary human resources and accountability within their organization.
- Data: Ensure credible and comprehensible data is available to inform decision-making.
There are 10 easy steps for success in the energy transition
- Commitment: Secure commitment from executive leadership and key decision-makers.
- Baseline: Establish a baseline for energy consumption and emissions.
- Metrics: Define key performance indicators to measure progress.
- Engagement: Actively involve employees and stakeholders in energy transition efforts.
- Teams: Form dedicated, cross-functional teams to manage and execute energy transition strategies.
- Competence: Develop the necessary skills and knowledge to navigate the energy transition successfully.
- Training: Provide training and education to employee teams tasked with implementing energy measures.
- Mapping: Create a comprehensive map of your organization's energy use and emissions.
- Assessment: Evaluate current energy practices and identify areas for improvement.
- Accounting: Implement robust accounting practices to track and report on energy and carbon management efforts.
Integration of energy and carbon management
Energy and carbon management should be fully integrated into the organization rather than treated as optional. We did a survey in a recent 360 Energy webinar where participants revealed this issue is often overlooked. Respondents told us educating and building awareness about the energy transition is the missing ingredient throughout their organizations.
It is essential that energy and carbon management become a mainstream strategic activity. Support and resources must come from the top echelons of the organization.
Businesses that want a future in which they can thrive need to embrace the energy transition. By implementing 10 easy steps to effective carbon and energy management, organizations can position themselves for long-term success while contributing to a greener, more sustainable world.