Why Green, Why Now? Proactive Investment in Green Reform
The overall goal of comprehensive energy reform is to drive productivity and work toward--ultimately--establishing a sustainable system of reliable energy technology. This would bring countless environmental gains, and--most importantly--it will bring fnancial gains to the enterprise. Executives should recognize that energy initiatives have a tremendous potential for savings; in the current fnancial environment, this makes a lot of sense, for businesses are constantly looking to cut costs—especially in ways that will not hinder employee productivity.
Utility expenditures for commercial institutions can account for as much as 30 percent of the total operating costs. A general rule regarding energy costs may be represented by a simplifed equation: a 30 percent reduction in energy consumption can lower operating costs by $25,000 per year for every 50,000 square feet of offce space (FYPower). Furthermore, energy costs have doubled since 2000, and the growing amount of energy consumption will only further the imbalance between supply and demand, which will certainly continue to cause prices to rise—making the current savings fgures even more favorable.
At this point in time, executives can make the voluntary decision to participate in the green revolution—whereby capitalizing on monetary incentives in the form of rebates, deductions, credits, and lowered energy expenditures—but it is very likely that the trend of increased legislative action will continue to gain infuence over the market. A logical forecast shows that future legislation will require compliance. Just as the current energy practices may result in an energy or environmental crisis, the reluctance to change business practices in a proactive manner may result in an enterprise crisis when stringent regulations are established.
As Thomas Friedman (2007) emphatically discourses about the globalization of our world--driven by a combination of economic, technological, sociocultural, political, and biological factors--and its adverse effects on our environment, he lobbies for the need for a more effcient energy grid. He poses that we haven’t really tried to mobilize our greatest resource: American capitalism. He lobbies for government regulation of energy usage (like it has been done in several other developed nations) and provides several ways that this could be accomplished--most notably his call for a price signal that will get the premier engineering, chemical/biosciences, and software companies (General Electric, DuPont and Microsoft) to invest wholeheartedly in renewable energy innovation. He makes it very clear that it will be innovation--not regulation--that will solve our energy issues before they become an epidemic. IBM is seen as the prototypical model and avant garde for energy reform, and their advances in energy technology are supported by mind- boggling data. By offering remote access to the workplace network alone, they have calculated savings of over 100 million dollars per year (Green Team Project). From the perspective of a novice consumer, their ability to promote themselves through expensive and pervasive marketing campaigns can be seen as a product of their energy savings. This has direct and indirect positive outcomes for their business, and the model can be replicated for other corporations who actively engage in strategic energy initiatives.
However passionate executives are about the environment, they are still more concerned with their bottom line--and for good reason. They care far more about proft margins and sustaining effcient business processes than they do about carbon footprints and sustainable resource management. In this dog-eat-dog economy, it would be irresponsible--from a business standpoint--to spend capital on energy initiatives without predicted monetary gains. In order for them to set their sights on their energy profle and energy initiatives, it must be warranted by expected return on investment (ROI).
In short, well thought out energy initiatives are designed for the purpose of saving the company money by improving the effciency of its facilities and business practices. Saving money on a fxed expense--on energy bills--might as well be chalked up as a pure proft, and that is the sole impetus of energy initiatives--from a business purist’s perspective.
Regardless of your stance in the great debate over climate change, or whether or not you believe that man’s industrial advances have resulted in severely adverse environmental conditions, you must recognize a market when it presents itself. Right now, that market is energy technology. Environmental, energy-cost, and space-planning considerations all call for conservation through a combination of operational changes, hardware replacement, and—especially—management software to cut waste and build effciency. It would be wise to acknowledge the pervasive buzz surrounding eco-friendly initiatives and energy conservation efforts because it has dollar signs written all over it. There is a distinct and measurable need and demand for reform. Enterprise leaders should incorporate energy initiatives in a proactive manner by utilizing the most powerful tools that are available on the market to manage their green-initiative projects. Agile PMO provides the capabilities to accurately measure and plan the project in order to allow companies to reap the benefts of the incentives available in today’s political environment, as well as the benefts of lowered energy expenditures and increased asset values associated with effective energy initiative implementation.