Over the long-term—if you consider a time horizon of 15 years or more—renewable energy sources make financial sense in almost any situation. But as a business, you want hassle-free, affordable energy, and you need to prioritise results now. What practical steps can you take?
First, here are two points to bear in mind:
- Our electricity supply throughout Europe (and elsewhere) is rapidly becoming more renewable. To decarbonise, it is necessary to go electric (apart from a very few niche applications where green hydrogen or biofuels may make sense). Wherever possible, fossil fuels should be replaced by electricity.
- Be aware of energy use beyond your own operations, in your suppliers’ and customers’ operations—sometimes it is cheaper and easier to make savings there.
Climate change is a hot topic. The United Nations Environment Programme reports record monthly average global temperature deviation from the long-term average in each month since June 2023.[1] Governments around the world are responding with policies to reduce the pollution that causes global warming and make their countries more sustainable.
A big part of the solution is obvious: stop burning fossil fuels (combustion of fuels puts exhaust gases—chiefly CO2—into the atmosphere, where they cause global warming). From our experience at Qhuba running Sustainability Sprints for clients, we see that typical businesses have most potential to reduce energy consumption (and especially fossil fuel use) in the following areas:
- travel and transport, including vehicles owned or leased by your own company, and vehicles of suppliers;
- space heating, especially in warehouses, industrial or commercial units, and large buildings;
- electricity
The relative importance of these three depends on the nature of the business. In addition, some businesses will have significant energy consumption from mechanical, heating or cooling needs in their manufacturing and storage processes.
Any efforts to reduce fossil fuel use in your (or your suppliers’ or customers’) operations needs to start with a measurement or estimate of the current state. How much fuel is being burnt and how much climate impact is it causing? (Keep it simple and use atmospheric CO2 emissions as a measure of climate impact.) It is not necessary to be super-accurate. If you’re not sure how to estimate climate impact, do seek advice – it will save time and ensure you make decisions based on the right data.
Also engage with others in the organisation who deal with reporting, such as the disclosures required under the European Corporate Sustainability Reporting Directive (CSRD). Co-operating with them will help you and the organisation to find synergies between energy reduction and other sustainability goals.
For your business, it helps to address in turn the three areas listed above, keeping in mind the business logic of different options:
TRAVEL AND TRANSPORT
For many companies, company fleets – cars – are a big part of their climate impact. Electric cars are already a lower-cost option in many situations.[2] Leaseplan, a large vehicle leasing firm, estimates a typical lease to be cheaper for an electric Volkswagen ID3 than for a combustion-engined Volkswagen Golf[3], reflecting a lower total cost of ownership over 4 years with a usage of 30000km/yr. In addition, costs of electric driving are also more stable as energy costs make up a smaller share.
Back in 2018, Feenstra, a provider of technical services, decided to go for an all-electric fleet of vehicles. Their fleet was responsible for 80% of the company’s 
CO2 emissions, and they were keen to reduce those. As a player in a sector with thin margins, their decision would not have been possible if it did not also make financial sense.[4]
There are many ways to make gains. Promote ride-sharing for people driving the same route. Electric bicycles give users more range as they pedal and can further slash the cost of individual transport for shorter journeys. And public transport is a viable option for many journeys.When it comes to freight and logistics, it makes sense today to electrify local transport. For long-distance truck journeys fossil fuels still look the lowest-cost option, although this is expected to change.[5]
Air travel has a heavy impact on the climate[6], especially long-haul flights. A round trip for two people from Amsterdam to New York is roughly equivalent to a typical household’s yearly CO2 emissions. Avoid flying if you can. Use other forms of transport if available and use online meetings to reduce pollution and save time and money.
Salesforce, a software service provider, targets a 50% reduction in travel-related carbon emissions. First measures put in place include mandating train travel instead of flying, where practical. Salesforce provides guidance and tools showing employees information on cost and carbon emissions, to help them make travel choices.[7]
SPACE HEATING
Building energy management systems and building automation systems can help identify where savings are possible and enable remote control. They help build a clear picture of where and when energy is used. And they can be set up to automatically adjust energy consumption to suit building occupancy or other criteria.
In Denmark, 7-Eleven rolled out technology to monitor and control energy use in their 120 stores. They wanted accurate, detailed data for statutory reporting and to show progress towards net zero targets. As a result of the new system, they also realised a saving of 11.5% on energy costs.[8]
In office environments it’s worth creating a discussion involving all office users about their attitude to heating. Everyone has their own preference when it comes to ambient temperature, and people generally realise the outcome is a compromise. Have the facts ready so that people can see the energy consumed and cost of heating to different temperatures. When given a say, some groups agree to keep the thermostat low.[9]
In warehouses and factory environments, it often makes sense to use portable heaters to heat just the areas being worked in, rather than the whole space. Such buildings tend to leak a lot of heat. Consider getting a heat audit done to evaluate how much you waste and to inform decisions on saving energy.
A car factory in Italy undertook a heat audit. The site includes buildings with a total heated volume of 320000m3, and energetic classifications ranging from A to F. The audit highlighted where heat was being lost and recommended measures that together will reduce energy use for heating by 15% and pay back within 6 years.[10]
Heating is typically a challenge to electrify because changes need to be made to a building’s heating system. The first step should always be to insulate the building to a high standard—this makes sense even if you continue burning fossil fuel, as it will reduce fuel bills. Once the insulation is up to standard, it usually pays to instal a heat pump to supplement or even replace a gas- or oil-fired boiler. Heat pumps consume a relatively small amount of electricity and provide 3 to 5 times that amount of energy as heat. Insulating a building and modifying the heating system represent substantial investments. It makes sense to plan the right moment for this – for example, when an existing heating system reaches the end of its useful life.
ELECTRICITY
Electricity is something you buy and so you have limited influence over its provenance. It is worth paying special attention to your electricity supply contract.
Not all ‘green’ electricity is of the same quality. If you want to show that you are genuinely consuming renewable electricity, ensure that your supplier provides an hourly ‘track & trace’ service, so you can see that the energy you consumed was being produced at the time by a specific renewable electricity source, and that the grid capacity between that source and your premises was not congested. Such services are low-cost and will boost your brand by showing your commitment to reducing pollution and providing an independently verified record.
Microsoft and energy supplier Eneco are monitoring electricity consumption at Microsoft’s Amsterdam data centre, in order to match it hour by hour to power generated by Eneco’s offshore wind parks.[11]
If you’re in a position to contract electricity for several years ahead, then you may consider to instal solar panels (if you haven’t already) or to buy a contract linked to a specific, still-to-be-built renewable energy source such as a wind park or solar park—known as a ‘corporate power purchase agreement (PPA)’. This way you can rightly claim you contributed to capacity getting built that would otherwise not have been.
French retailer Boulanger contracted a 25-year, 5MW supply from Voltalis under a corporate PPA. Boulanger explicitly wanted to support the construction of additional renewable electricity generation capacity, as part of its strategy of differentiating itself from its main competitors. The PPA structure enabled this at a fair cost for the energy.[12]
SUPPLY CHAIN
An understanding of your suppliers’ and customers’ operations may yield larger and easier savings. A pre-requisite is parties must be prepared to share information openly with each other – which can be a challenge in situations where commercial interests are at play.
There are two distinct steps:
First, establish where in the whole chain the greatest reductions are possible. This requires a joint investigation where parties share technical data and information openly.- Then, if costs and benefits of improvements are to be shared, this needs to be negotiated between the parties. Negotiation can only take place after the facts have been established.
It can help to use an external, neutral, facilitator to manage the process, especially if several parties are all involved in the same discussion. The facilitator can also have a role in helping the group allocate costs and savings in a fair way.
Schneider Electric, a provider of automation hardware and software, is engaging with over 1000 companies in its supply chain to train people, share knowledge and best practice, and investigate opportunities to save energy and reduce emissions. This includes increasing fuel efficiency in goods transportation.[13]
SETTING PRIORITIES
Not all possible actions will be equally attractive, and a process of prioritization is needed. In the Sustainability Sprint we take the following approach:
- Get clear what the largest energy consumers are in your business and supply chain (suppliers and customers).
- Form a first impression what range of possibilities exist to reduce the consumption of each of them. Our experience shows that gathering ideas from around the organization is quick and low-hassle and usually yields a fairly comprehensive list. Supplement with expert opinion from outside if needed.
- Briefly evaluate how feasible each possible action is—list the action with estimates of cost, organisational impact, and likely implementation effort. Also perform a brief risk assessment for each item.
- Plot a graph of impact vs. feasibility and use this graph to rank actions in order of priority.
- Create action plans to execute the top-ranked items, and a roadmap showing when the next actions on the list will be considered.
- Create buy-in through engaging people early in the process. This includes both rank-and-file colleagues and management. In facilitating Sustainability Sprints, we often observe that groups of colleagues or management teams have not yet dedicated time and thought to aligning their views on sustainability in general, and energy matters in particular. Once alignment exists, actions follow.
This simple process ensures an executable plan and roadmap, bringing clarity, confidence, and control.
IN CONCLUSION
First, know where in your operations and your suppliers’ operations the greatest energy consumption takes place.
Then, know what measures you can take to reduce it.
- Some easy ones:
- Your next lease car should be electric
- Avoid air travel unless absolutely necessary. Use online meetings to save time, money and pollution
- Buy traceable green electricity
- Make energy fossil fuel use a topic of discussion—every little helps. Lead by example and encourage co-workers to cycle or take public transport whenever possible. Consider turning down heating thermostats
- Get an energy audit done
- Some that require more coordination
- Instal a modern building energy management system
- Form a team composed of people from companies in your whole supply chain to evaluate where the biggest savings are to be made
- Re-structure supply contracts to reflect a shared interest in minimising energy consumption and removing fossil fuels
- And some that require financial investment:
- Instal solar panels or buy a ‘corporate PPA’
- Insulate your buildings and instal a heat pump
Before you execute, use a disciplined process to gather, evaluate, rank and select possible actions.
If you have questions about how to approach saving energy in your organisation, creating alignment among colleagues, or the Sustainability Sprint, please contact Simon Brod simon@circulusworks.com or Jessica van Beek jessica.vanbeek@qhuba.com.
[1] https://wesr.unep.org/climate/
[2] https://www.economist.com/special-report/2023/04/14/an-electric-shock
[3] https://www.leaseplan.com/nl-nl/elektrisch-rijden/kosten-ev/ev-vs-ice-kosten/
[4] https://www.feenstra.com/zorgelooswonen/wagenpark-wordt-elektrisch/
[5] https://thedriven.io/2023/09/11/europes-electric-truck-market-is-surging-but-electric-buses-the-star-of-the-show/
[6] https://ourworldindata.org/grapher/carbon-footprint-travel-mode
[7] https://www.businesstravelnewseurope.com/uploadedFiles/Recent_Issues/sustainability202106-dl.pdf
[8] https://www.best.energy/case-studies/7-eleven-denmark/
[9] https://www.businessnewsdaily.com/10964-office-temperature-debate.html
[10] https://www.sciencedirect.com/science/article/pii/S1876610214000472
[11] https://www.flexidao.com/case-studies/microsoft
[12] https://www.pv-tech.org/voltalia-kickstarts-french-corporate-ppa-scene-with-5mw-deal/
[13] https://www.se.com/ww/en/about-us/sustainability/zero-carbon-project.jsp