In the face of uncertainty and the storm clouds of a turbulent global economy, it has become increasingly difficult for organisations to focus on their long-term sustainability goals. Can they refocus and find a way forward?
How organisations respond to this challenge is key, but it is not always easy to understand the best path forward. However, if you had the opportunity to ask a key organisation in your industry or perhaps even a competitor one insightful question, what would it be? What fundamental risks are you worried about the most?
Is energy cost now a priority for you as well? Is cost the biggest energy-related challenge in the next three years for you too? Well, fortunately, we have done just that. Instead of asking one key organisation, we asked 500 organisations across a variety of industries. And instead of one insightful question, we asked many. The goal was to get their thoughts on how they’re balancing their energy cost and sustainability goals and as you can imagine, there was a lot to unpack.
In 2023, 46% of organisations say that cost is currently more important than sustainability.
42% say they are prioritising long-term gains over quick returns and low-risk strategies — down from 53% in 2021.
The thoughts and feelings conveyed to us were enlightening. Everyone struggled in one way or another when gas and electric prices reached record highs in 2022. No organisation was immune from the effects of the biggest energy crisis in modern times and while many have endured its harsh winds, no organisation came out unscathed.
Fast-forward to 2023, energy cost efficiency continues to be a pressing concern and organisations are struggling to focus on their long-term decarbonisation goals, as they are forced to put out fires relating to the current economic climate. More importantly, how can organisations focus on long-term goals of sustainability, when cost efficiency is a problem right now?
44% of organisations say that lower and more predictable energy costs are a major challenge for the next three years — more than for any other challenge.
For 44%, financial risk is now the most serious threat they face versus 49% in 2021. For 40%, it is energy security versus 47% in 2021.
You probably already know that neglecting your sustainability goals could be financially risky. What if we told you that other organisations had come to realise that achieving the twin goals of energy cost reduction and sustainability are not mutually exclusive? We are not the only ones that believe this; others agree. We had the pleasure of interviewing John Petre, Supply Chain, Procurement & Technical Director at Weetabix and got his view.
These are complementary goals. As a good business you always want to be driving efficiency, and using less energy is a part of that. And, obviously, using less energy also has a sustainability benefit.”
John Petre, Supply Chain, Procurement & Technical Director in the Executive Leadership Team at cereal manufacturer Weetabix
Both investors and customers continue to demand change from organisations and hold them accountable as far as sustainability is concerned. However, the fact that organisations can both reduce costs and shrink the organisation’s carbon footprint by implementing low-carbon and zero-carbon technologies only demonstrates that there is still a business case for continuing to pursue net zero.
Organisations that are thriving have made significant progress in investing in new technologies and systems to improve their energy use and predictability. Although these investments typically come with upfront costs, many of these investments now have shorter payback times, which increases their attractiveness and builds the foundation for further initiatives.
52% of organisations say that investors and shareholders are more in favour of investing in renewable energy than ever before.
49% say their sustainability initiatives help them tap into green finance, and 51% are considering using sustainable finance.
Already 8% of respondents say they have installed hydrogen-ready CHP, and 69% say they are either considering the technology, trialling it or planning to implement it. Leaders in energy management will continue to play a crucial role in keeping their organisations focused on longer-term sustainability goals. Making sure energy managers are supported and equipped to find cost efficiencies at the same time as fulfilling decarbonisation mandates will also see organisations thrive.
All we know for sure is that when the storm clouds pass and the dust settles, many organisations will bear the scars from this chaotic period. However, those that thrive in these turbulent times understand that from chaos comes opportunity and usually in the form that we don’t expect. If there is one takeaway, it is this. Many of the strategies and tactics organisations will use to reduce costs in the short term can also support their long-term decarbonisation efforts.
Our comprehensive report will give you a unique perspective into how other organisations have adapted to the challenges of the current climate and will give you invaluable insight that is not available anywhere else. How will you apply that knowledge? Let’s find out.
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