Start selling carbon strategies — not just products
The Carbon Reduction Commitment league tables mean large organisations now have an even greater incentive to reduce their emissions. But energy-services companies need to start delivering comprehensive carbon strategies if they are to provide clients with the best results and help stave off a national energy crisis, argues Mike Sewell.
After years of legislative development the reality of the Government’s Carbon Reduction Commitment (CRC) is now hitting home for the 2300 big public- and private-sector organisations subject to it. In July, organisations had to submit reports on their carbon emissions over the past year, and this month sees the publication of the first CRC league tables.
Organisations will not just be financially penalised for excessive carbon use but face the reputational impact of a poor showing in the league tables. No company expects to be at the very top — but to be at the bottom could be a public-relations disaster.
The media will effectively label the league tables a ‘polluter’s index’. A poor showing — especially for those companies which already promote themselves as ‘green’ — would be disastrous for many organisations, especially well-known brands.
The onus is therefore on us — the FM and energy services industry — to help our clients achieve their targets whilst also ensuring continuity of supply so their organisations operate successfully.
Yet at the same time the CRC is coming into effect there is a host of other issues the sector must grapple with such as growing demand, the unpopularity of fossil fuels and nuclear energy, binding UN and EU energy reduction targets and ensuring energy security. These issues on their own could mean UK industry faces blackouts from 2013 if the tension between supply and demand is not resolved.
The situation is therefore critical. Companies have reputations to maintain, and the UK may face blackouts in industry and commerce if we don’t reduce our energy consumption. Indeed, it is interesting to note that despite the economy’s somewhat sluggish performance the UK’s energy consumption actually increased by 3.2% last year, according to figures released by the Government in July 2011.
That’s why the sector’s responsibility has never been greater. As one of the UK’s largest energy services company, MITIE is clear in its responsibilities to help organisations of all sizes cope with these changes.
Unfortunately there is a serious industry issue that is preventing it maximising the energy savings it could achieve for its clients; there is too much tactical selling of products as opposed to comprehensive energy strategies.
Many energy-service companies are selling the products they specialise in, which may not always be the best solution for the client. The best energy solutions are those which are integrated (across FM, waste, property, or applicable divisions), mixed and form part of a well thought out and intelligent carbon-reduction plan.
At the moment 70 to 80% of energy solutions are sold to clients from companies which only specialise in the product they sell — whether that be solar, wind, PV, BMS or another technology. These solutions are not client led and therefore cannot always provide the most cost-effective carbon-reducing strategy.
The difference is between providing a specific product solution verses a tailored product together with an energy management strategy where legislative, property and operational requirements are fully considered.
Many in the energy-services industry need to shift their approach The best carbon energy strategies are management driven, not product driven or focused on a particular short-term benefit provided by a piece of energy or environmental legislation.
A comprehensive energy solution delivers more because it provides real value by reducing costs, ensures business continuity through security of supply, reduces carbon emissions and is client driven — not sales driven. At MITIE this is what we deliver to our clients — whether it is a large NHS hospital or a global brand with offices and manufacturing sites across Europe.
An important element of this strategy is delivering ‘times-two’ sustainability for clients. This involves going beyond maximising the carbon savings for clients but also ensuring the continued sustained operation of facilities. This applies for any facility, ranging from a business-critical data centre to a future school.
In short, the energy-services industry must provide intelligent, comprehensive carbon strategies for clients, working seamlessly with effective integrated FM and property management, if it is to ensure both the commercial and reputational success of its clients.
The sector needs to unlock the true potential of the fundamental energy-service model, where results are guaranteed and contractor income dependent on delivering them, to help large organisations achieve a good ranking in the CRC league tables and secure our country’s future energy security.
Mike Sewell is CarbonCare director at MITIE.