Australian companies high on ‘green’ but low on energy

Friday, 19 October, 2007

Australian companies like to espouse their green credentials, however 53.9% of businesses still do not have a formal energy policy, according to a whitepaper by Proudfoot Consulting.

This figure includes industries such as manufacturing, mining, transport and logistics.

Titled, ‘Meeting the Corporate Energy Challenge: Are Companies Walking the Talk on Energy Efficiency?’ the paper reports a further:

• 65.7% have no published energy improvement goals; • 51.9% do not define, measure or monitor energy KPIs; • 43% do not communicate energy expectations to employees; • 41.1% don't have a designated person or function responsible for energy.

The data also suggests that the responsibility of energy costs lies at a middle management level particularly with accounts payable (27.5%), followed by department managers (22.5%).

The whitepaper draws on 102 responses to a survey designed to assess the extent to which energy is on the corporate agenda. Half of the participating companies have sales revenue of more than AU$500 million, and 13 are ASX100 listed companies with a combined market capitalisation of AU$268.5 billion.

Peter Isaac, Pacific president, Proudfoot Consulting, believes the survey data demonstrates a disconnection between corporate green rhetoric and reality. Senior management is disengaged from site-based, energy-efficiency initiatives and there is an overall lack of activity to address energy wastage.

“Energy wastage has a considerable effect on the bottom line,” said Isaac.

“Therefore, CEOs need to warrant ‘energy’ the attention it deserves by proactively setting energy reduction targets and initiatives. Shifting the accountability of energy usage onto senior management will surely see energy efficiency improvements.”

Isaac sees other issues for CEOs who are slow to adopt energy management best practices.

“We live in an age where environmental concerns have reached the highest level of government and the mainstream community,” he said.

“Energy-efficiency best practices will invariably become more and more regulated, meaning costly government compliance. Meanwhile employees, especially the young, will become more demanding of companies to adopt green policies. CEOs need to plan for these changes now and lead the way towards making energy efficiency an integral part of corporate culture.”

Across the Tasman, a more progressive energy awareness corporate culture has emerged with 36% of New Zealand companies having had an energy policy in place for more than six years, compared to 7.5% of Australian companies.

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