Bennett - Editor
Welcome to another two weekly review of energy and environmental events and developments from both here in New Zealand and around the world. As always, we hope you find our collection of stories to be of interest in what continues to be a rapidly evolving area.
We start off this issue with a look at hockey sticks. Not the type so popular in Canada, but one that Al Gore used to great effect in his film the ‘Inconvenient Truth’. Back in 1999 a Penn State climate scientist Michael Mann, produced a controversial graph showing a high and accelerating rate of temperature climb just in the last decade. Well a new study by climate scientists going back a whopping 11.300 years, including the last Ice Age and encompassing the entire globe have backed him up – and more. The results we think speak for themselves, but we now wait for the expected backlash from climate change deniers.
Our next set of articles looks at the existing financial and capital markets and how mainstream investors are being introduced to ways that the environment can be valued through existing monetary systems. Our first article looks at the concept of valuing natural capital, a concept that is increasingly becoming mainstream. It’s all part of a growing awareness around using a different language on Wall St to create change in the boardroom. J P Morgan, Chase and UBS discuss how to use data to demonstrate impacts on the bottom line – in other words, the one that gets stakeholders listening– the dollar. As they put it – if you want to get Wall Street involved, you need to show them how they can make money out of it.
And make money they do.
Corporate profits are at record levels and so is interest in the Carbon Disclosure Project (CDP), with a record 722 investors with a total of $87 trillion in assets now as signatories. This is up 10% from the previous year. It’s big money and a big opportunity. Recent research into the environmental performance of S&P 500 companies, shows the direct and supply chain environmental costs, total $22 billion across food and retail sectors, which do not show up on balance sheets. Another way of looking at this, is that is not only $22 billion in unaccounted externalities, but $22 billion in opportunities to reduce input costs, lock in strategic suppliers and optimize supply chains and products. Certainly early mover advantages for those who are bold enough…
We next examine sustainability and the supply chain. The measurement and reporting of environmental performance (for example Puma) is all part of chasing the dollar. If anyone is serious about sustainability they need to get serious about managing their supply chain. Unlocking sustainability’s hidden value describes how a successful manufacturing company embedded a sustainability roadmap within their organisation. Early movers are also leaders in this space – and as we like to say, a sustainable business is a good business.
Next up, we look at energy management and some useful processes and steps that can be taken to improve an organisations overall performance on many levels (efficiency, performance and green credentials).
We first look at four primary steps to accomplish a successful energy overhaul. As with any exercise of this nature the responsibility should fall to as many staff as practicably possible, so step One is to ‘round up the troops’, in other words get the right people involved. Step Two is to ‘assess current and future energy states’, by looking at establishing a base line energy profile, along with details around current assets and operational characteristics. Step Three involves, ‘evaluating energy opportunities’, for example specific project initiation such as energy rate checking or audits and upgrades on various plant (heating etc.). Finally step Four, which is to ‘implement and monitor energy roadmap’, to document what changes have already had an impact on the organisation, ensure reports are provided and on-going energy use and costs are monitored.
We next take a look at seven key selling points for energy projects. Disappointingly, often a high number of potential energy saving projects are postponed or cancelled (close to 50%), due to lack of upfront capital. Using these selling points will ideally assist in getting a project across the line that will ultimately benefit the organisation. The net results are improvements in operating performance as well as making staff more comfortable (happy/efficient). The return on investment often exceeds most other opportunities, whereas doing nothing is effectively continuing to waste resources. And it’s not just about saving money, it is also about reducing emissions, improving staff morale as well as enhancing the overall image of the organisation.
The importance of measuring and verifying energy performance should never be underestimated. What you don’t measure, you can’t manage. Knowing how efficient a building is operating requires the collection of many sets of data, for example as part of a building energy rating scheme or for audit purposes. Collection of data should be done on a planned, regular and systematic basis as buildings can and do change when you put people in them!
Controls also change or fail - a very good reason for continuous commissioning. Whilst this process can be complex, it ultimately ensures that all building controls and heating/cooling plant is working at their most optimum level. One of the key points highlighted is that this type of project is reliant on more than one member of the building management team being involved (energy management really is a team sport). Information on input needs to be gathered on such things as mechanical systems, building occupancy, work flows etc. and then outflows can be prioritised through an action list. Typically the payback from continuous commissioning is less than one year. Where else are you likely to see a 100% return on capital? Even Madoff, wouldn’t have promised that…
Thanks for taking the time to read this issue and look forward to catching up with you again. If you have any items of interest you would like to submit, then please feel free to forward them.