5 components of a virtuous cycle for energy efficiency

In the past five years, EDF Climate Corps has worked deep within more than 100 leading companies to cut energy costs and curb carbon emissions. Along the way, we've tracked and analyzed what does and doesn't work, reporting the common barriers to energy efficiency that we encountered and the most powerful strategies for breaking them down.

We've released the latest iteration of this research, The Virtuous Cycle of Organizational Energy Efficiency. It's a model of change we’ve discovered that applies to energy efficiency across even radically different organizations with five powerful, interdependent components.

American Council for an Energy-Efficient Economy (ACEEE ) recently published our paper on this model and invited us to present at the ACEEE Summer Study on Energy Efficiency in Buildings. We were thrilled to see the model resonate with an array of audience members at the conference and are excited to share it with our readers today.

The virtuous cycle of organizational energy efficiency

1. Executive engagement
2. Resource investment
3. People
4. Identification, implementation, and results measurement and verification (M&V)
5. Stories and sharing

The five components of this machine affect one another for better or for worse. If the performance of one improves, this often improves the performance of all in a "virtuous cycle" of positive feedback. When all components function at full capacity, the cycle will run smoothly to improve energy performance, generating maximum financial and environmental returns.

Gears and cycle image credit: Jake Hiller

The five parts of the cycle

1. Executive engagement 

Top-level executives recognize energy efficiency as a key strategic priority for generating cost savings and building long-term value in a business. They shift from seeing energy as an inevitable and growing cost, and instead see its optimization as a source of continuous leverage for building an efficient and resilient organization capable of meeting its broader mission and goals.

2. Resource investment 

In order to empower their organizations to capture energy savings, executives make strategic, capacity-building investments to free up the necessary human and financial resources to make concrete action possible. Energy efficiency projects will pay for themselves, but need dedicated seed capital to get started and attentive managers to ensure those seed funds grow and are reinvested on an on-going basis.

3. People 

Resources are deployed to build staff capabilities and equip them to go after efficiency opportunities. Providing training opportunities, organizing cross-functional teams and establishing full-time positions are steps that help build employee knowledge, foster enthusiasm and create accountability for improvement. A workforce that feels ownership and responsibility for its energy use at all levels and is actively encouraged by leadership to work toward a shared vision of efficiency will maintain the momentum needed to make real progress.

4. Identification, implementation and results measurement and verification 

In order to aid the organization’s staff, effective processes and tools are developed and refined over time to make sure increasingly ambitious projects are identified and implemented. Comprehensive and detailed energy data collection is vital to identifying sources of inefficiency and measuring the energy savings achieved through specific interventions -- generating the verified financial and environment results that prove the benefits of taking action in the first place.

5. Stories and sharing 

To maintain momentum beyond a first round of projects, successful results are leveraged into stories that are shared directly back with top executives, validating their prioritization of energy efficiency as a key strategy and proving the business case for doing additional energy projects. By re-engaging the executives continuously, success stories keep energy performance at the top of the agenda and encourage the investment of additional human and financial resources to go after even bigger wins, keeping the virtuous cycle spinning for yet another round.