As has been well-publicized (and in companion article), the US has been hit by both high inflation and supply chain issues. Cost inflation rose in 2021 by 7%, the highest rate in over 30 years. And energy costs remained the top driver of this high inflation in 2021, rising 29%. Gasoline costs rose 50% and fuel oil costs 41%, according to the US Bureau of Labor Statistics. If all of the other arguments made over recent years to do an energy audit and prioritize reasons to save usage and cost have not succeeded, now they must. And if you are thinking “Oh, these increases cannot be maintained”, well, that’s simply not necessarily true. And the beauty of energy savings is that smart actions you take will save you energy costs for many years down the road in future good times and bad. So don’t wait!

So what is the first step? Get a handle on your energy bills. Go back and retrieve your energy bills, going back 2 years. Don’t forget to include oil invoices, too. Just like you track sales, expenses, etc., you should track energy usage and costs. Create a simple spreadsheet or Word document to catalog the usages and note changes over time. See if your energy bills have risen that much.

Then have a professional energy audit done. There has literally been a revolution in the last 5 years of new technologies that will save energy costs. A professionally-performed energy audit will inform you of what options you have either in terms of modern replacement technologies or of changes in operations to reduce energy waste. Some of the options may be very cheap or free, such as changes in settings. Others may be expensive upfront, but many utilities and governments have rebates and other subsidies to partially pay the upfront cost. If you pay your utility bill, you would qualify. And a growing number of governments offer “C-PACE” financing, which is subsidized and allows you to pay back the loan in installments like you pay your local taxes in the same payment. Even without that, lenders know that energy efficiency technologies are cash positive; there is less risk of lending money because the savings will be there.

Take your energy audit report seriously and read deeply into it. The energy professional will likely provide multiple ways to reduce energy usage. Take them seriously. You may not be able to do all of them at once, but certainly be assertive and go forward with several. You do want to cut down your energy costs as they rise so much. Consider hiring a project manager to implement the strategies you select. Yes, you will have to pay extra for the expertise, but if that person will better ensure the strategies are incorporated properly and the energy savings predicted will be achieved, then it is worth that price. Remember your energy savings from just about any upgrade is not a one year thing, but will continue to save you money for many years in the future. If poor or no project management means the device is 10% less effective, then that is a much greater loss in avoided cost over time than what you would have paid the professional.

There have been many cases – and many I have seen – of companies and managers who have turned down good, energy-saving projects because they did not “have to” or they felt the savings were not enough. Those days are gone. Those that held back a few years ago are paying a steep price now for that attitude with energy costs having risen by 29% in the last year. Don’t make that mistake. Do an energy audit the right way and go forward on smart energy saving projects!

CCES has the experts and experience to perform these services for a variety of building and operation types. We have many years of experience of performing many types of energy audits and equipment assessments and retro-commissioning to determine multiple ways for you to save energy costs. We can project manage and bring in the best experts to install and ensure good performance of energy strategies you select. Contact us today at karell@CCESworld.com or at 914-584-6720.

The renewable energy and energy efficiency sectors are booming. Fueled (sorry for the pun) by growing utility and government incentives, regulations, high energy prices, and corporate demands to be more “green”, the industries are growing. However, like other general projects, construction of necessary renewable and other energy technologies is impacted by supply chain issues, affecting both time and cost.

Shortages of materials and slowdowns in transport are leading to delays, higher costs, and disputes between contractors, subs, and customers. This is particularly true for renewable energy and energy efficiency projects. Here are some key issues.

• Availability of key raw materials: Certain raw materials required to build solar panels or other components are limited in availability, increasing the risk of supply chain disruption.
• Limited manufacturing: Steel and other more components of less specialized equipment are also in short supply. An assembler of cooling towers told me he had to suspend business in this area because only one material was in short supply. But without it, they could not make the cooling towers per needed specifications.
• Transportation:  Raw materials must not only be mined and treated but also transported to the appropriate assembly plant or retailer. It has been well publicized that there is a shortage of truck drivers, boat operators (for barges), and dock workers to unload boats, trains, or trucks. Materials have sat around for many days at many ports around the world.
• ESG: Although renewable and energy efficiency projects have positive impacts on the environment, they often rely heavily on the mining or fabrication of certain raw materials which may have great negative impacts. They can also affect workers, local communities, and the nearby environment. Particularly for firms with strong social sustainability standards, some projects may no longer be a go.

What can you do to keep projects moving forward to help you comply or otherwise be more efficient?

• Review projects and consider which raw materials are critical and alternative technologies if an initial approach may not work because of shortages. Determine which equipment may undergo high price changes or shortages and communicate this to colleagues in case it results in delays or cost overruns.
• Suppliers should communicate all potential delays or cost bumps with customers before they happen. It may be in the customer’s interest to be proactive and reach out first. Given these recent problems, before hiring a supplier, a customer should keep in mind the bidders’ experience, reliability, and ability to communicate during difficult times, not just the cheapest price or best equipment.
• Customers should consider some type of performance insurance in case a certain piece of equipment cannot be supplied on time or at all. In addition, contracts should be reviewed to contain appropriate representations, warranties, and indemnities, to minimize potential losses that may arise due to projects being delayed or upended altogether. Speak to a qualified attorney about this.
• Customers should understand the regulatory risk they face if the equipment is not in place by a certain time, and both warn and negotiate with the regulatory agency(ies), to reduce liability because equipment is not in place in time for reasons beyond the customer’s (operator’s) control, such as supply chain issues. Just one example: I had a client (pre-COVID) who could not meet a regulatory deadline due to a part being backordered. I showed the agency the backorder a few months in advance and said they would install it when it arrived. The agency granted the facility an extension and, in fact, the equipment was installed soon after the original deadline.

CCES has the experts to help your firm design and execute energy efficiency and renewable projects to address and minimize risk factors of supply chain issues by suppliers. Contact us today at 914-584-6720 or at karell@CCESworld.com.

In January, the New York State Assembly and Senate introduced identical bills seeking to impose environmental, social and governance (ESG) requirements of the fashion industry. (https://www.nysenate.gov/legislation/bills/2021/A8352)   If passed, the “Fashion Act” would make New York the first state in the country to require fashion retail sellers and manufacturers to publish extensive disclosures about their supply chains and their environmental and social due diligence policies, processes and outcomes and to set binding targets to reduce those impacts.

The Fashion Act applies to fashion retail sellers and fashion manufacturers, defined as business entities that primarily sell articles of apparel or footwear and list “retail trade” or “manufacturing” as their principal activity. Subject companies must do business in New York State and have annual global gross revenues exceeding $100 million.

The Fashion Act imposes ESG disclosure of a supply chain map; social and environmental sustainability report; impact disclosures of certain environmental and social impacts; and annual reports tracking progress toward risk and impact reduction. Subject companies must prominently post these disclosures on their websites.

Subject businesses must map at least 50% of their supply chain by volume across all stages of production from raw material to final production. Such a supply chain map must include suppliers and supply chains associated with certain prioritized risk areas identified in the entity’s Sustainability Report, including names of such suppliers.

Briefly, the Sustainability Report must identify business risks and measures taken to ensure “responsible business conduct” in policies, according to principles set forth by the United Nations and other organizations. The Sustainability Report should also identify areas of significant risks in the context of its supply chains, including, for example, geography-related risk factors (governance, human rights, or environmental adverse impacts) and enterprise-specific risk factors (known instances of misconduct). The Report should identify actions taken by to mitigate identified risks, including benchmarks for improvement and progress. The Report should also assess the extent to which the company’s activities have impacted the identified risks and ways it has remediated following discovery of an adverse impact.

The proposed rule requires disclosure of greenhouse gas (GHG) emissions, which must be based on the reporting standards of the World Resources Institute and be independently verified. Reporting must include a baseline of current energy usage, GHG emissions, water usage and chemical management, as well as reduction targets.

The proposed Fashion Act allows both the New York State attorney general and the public the right of enforcement action. A private citizen may start a civil action for alleged violations of the Fashion Act.

Should the Fashion Act become law, it would require companies to comply with its various disclosures within 12 to 18 months of promulgation.

Please note that this is not a legal interpretation of the proposed bill. Please read the proposed bill and speak to qualified, experienced legal counsel before taking any actions. CCES has the experts to help your firm – whether in the fashion industry or not – to perform a professional GHG emissions inventory (“carbon footprint”) for your operations ahead of this or other legislation. Such a carbon footprint can help your company find ways to make your operations more streamlined and save you expenses. Contact us today at karell@CCESworld.com or at 914-584-6720.