For many firms, energy is recognized as its third largest expense, behind labor and real estate costs. Some companies spend millions of dollars directly on energy each year—and more indirectly (supply chain, transportation, etc.). However, except for energy-intensive industries, most firms have historically taken energy for granted. When they turn on the switch, the equipment goes on and vice versa. They don’t pay much attention to the volatility and risks of energy availability and costs.

In the last few years, however, energy is climbing up the corporate agenda, due to greater environmental and climate change awareness, increasing pressures on natural resources, as recent large-scale fires in Latin America show, and innovations in energy technologies together with dropping renewable energy prices.

In recent years, more critical business functions depend on reliable electricity and fuels. IT, data centers, and cloud computing have grown in complexity. These are energy-dependent and energy-intensive operations. Lose electricity for even a few seconds, and millions of dollars worth of data, not to mention records, reputation, lawsuits, are lost or become issues. Major companies are realizing this and are thoroughly evaluating risk related to energy. And conclusions are reaching the C-Suite, as risks are becoming existential for many companies. C-Suiters are also influenced by the growing quilt of energy- or climate change- rules, as well as the growing costs of energy.
More major firms are devoting effort to increase renewables in their energy mix and improve energy efficient, given the large costs involved. But it is not just “high tech” companies; others understand energy is a significant business issue. Agriculture is responsible for about one-third of greenhouse gas emissions. A number of leading firms in the food field have developed and are meeting stringent energy and carbon goals.

Whether your firm is major or not, it is a good idea to develop and implement an energy management plan. However, it is critical not to just “jump in there”. Planning is critical for your energy plan to succeed and minimize its costs. Perhaps the most important area is “political” success; “political” meaning getting all major factors on board, including, and most importantly, the CEO him or herself and all other major players in the company, so there is unity behind the effort and respect for the results. It is also important to coordinate efforts, to ensure you have enough staff to track energy at all levels throughout the company’s assets. Finally, it is important – before you start – to work through that there are resources to invest in smart energy projects (energy efficiency and/or the switch to renewables). Good, potential projects will not wither and not go forward. If these areas are worked out – or if you know the potential barriers that may occur in certain circumstances – the chances of success are raised tremendously.

CCES has the experts to help your firm develop and execute a smart energy plan with distinct financial benefits. We have helped firms prepare their plans to understand their strengths and weaknesses so they go in with firm goals and procedures to do it right. Contact us today at (914) 584-6720 or at karell@CCESworld.com.