Ignoring energy conservation is akin to throwing money away. You’re probably thinking about working smarter and getting more done in your business more efficiently so that more cash can go into expanding it. CFOs are constantly looking for methods to improve the bottom line and promote growth, from automation to better business intelligence tools. So, what’s the point of leaving money on the table? Energy-efficiency projects can provide you with the funds you’ve been looking for to invest in innovations.
Why Is it Important to Consider Energy Efficiency?
Among the several advantages of energy efficiency are: Increased efficiency can reduce greenhouse gas (GHG) emissions and other pollutants and water consumption. Economic: Improving energy efficiency can help stabilize power prices and volatility by lowering individual utility bills, creating jobs, and lowering individual utility bills.
How to Convince Your CFO to Engage in Energy Efficiency?
Getting your company’s Chief Financial Officer (CFO) to understand the value of energy management is no simple task on the resource planning battlefield. When confronted with a cost-cutting investment, the most common response is “maybe some other time” or “there are other priorities right now.” There will always be competing projects for funding and priority. Understanding and presenting the progressive benefits of energy management is a question of shedding light on its actual relevance.
To convince your CFO to focus on energy efficiency, the points given below are convincing:
- Allow the numbers to enthrall them: Getting your point across to your CFO requires more than logic. When you offer numbers and ratios, they will begin to pay attention. Calculating the ROI is not only the first but also the most crucial step in the negotiation process. It should ideally be less than two years, preferably less than one. It is critical for your proposal to remain appealing and be at the top of the list of viable projects. You might wish to start with simple energy efficiency projects to ensure this short-term return. You’ll be able to convince your CFO of the benefits of such steps in this manner. You can broaden the scope of your tasks once you’ve gotten your CFO’s attention. It’s critical to persuade your CFO that energy management is an investment rather than an expense. Henry Ford phrased it, “if you build it, they will come.”
The same is true in terms of energy efficiency. If you don’t start taking steps to reduce energy waste now, you’ll find that you’ve already paid for energy management and are still squandering energy and money in the long run.
- Emotional appeal: Energy management is significantly more than just saving money. Make the argument that there are many more benefits for the entire organization once your CFO genuinely listens. Hard facts with significant implications will more influence your CFO. Your message will be strengthened if you inform them of the benefits resulting from efficiency measures. Emphasize how obtaining energy efficiency improves operational productivity, reduces carbon emissions, and improves competitiveness. The ultimate goal of these sustainable activities is to gain market distinction. Let them know how much those cost-cutting measures will benefit the environment. Make them understand how minimizing energy waste can benefit your company’s image. Give them more reasons to believe in your project in a nutshell.
- Your most potent weapon is visibility: Energy efficiency is already a difficult task, and it’s even more challenging to notice results without a competent monitoring tool. When working on energy efficiency projects, having the right tools to track your progress will be beneficial. Energy management software allows you to see real-time visualizations of your energy data and measure and verify improved results. It will provide you with many clouts when you meet with your CFO because you’ll be able to show off your results and translate energy savings into dollars.
- Use some successful cases to persuade your CFO: Get samples from other businesses in your industry and show your CFO how they’ve used energy management strategies. Briefly describe their situation, their activities, the savings they realized, and their payback period. It will give them an idea of some of the fantastic benefits they can expect once they say YES!
- Distribute regular reports: The CFO will want to see energy savings measured and reported in monetary terms and know how long it will take to recover the investment. He’ll undoubtedly demand quarterly reporting on the improvements and cost savings accomplished.
Why Should CFOs Promote Energy Efficiency?
Below are the reasons why prioritizing energy efficiency is essential:
- Stay competitive by cutting costs: Energy is a considerable cost-cutting potential in almost every firm. Energy costs are one of an organization’s most significant expenses, but they can be managed with the correct energy-saving strategies. The amount of money you can save depends on how motivated you are to engage in energy-saving projects, but even low-cost initiatives can add up to a lot of money. For example, IKEA replaced the lighting in its Ontario stores with more energy-efficient LED bulbs, saving the firm $75,000 per year in energy expenditures. Working with a skilled specialist to obtain an energy audit is a straightforward way to find good chances. The payback period for significant energy-efficiency improvements might be as low as two or three years with the correct incentives. Energy-efficiency measures can increase the overall value of your property and business and lower your monthly expenditures. They can also lower ongoing maintenance costs and hazards such as equipment downtime, which is a massive win for CFOs who recognize that risk management is increasingly falling to the finance function.
- Reduce the number of people who leave: CFOs across North America are concerned about talent retention. There’s no denying that staff turnover costs money, so anything that keeps them happy is a win. Improvements that make your business more energy efficient positively influence employee health, safety, and wellness, enhancing productivity and, ultimately, the bottom line.
Energy-saving can even promote a more purposeful and collaborative environment. For example, Home Depot gamified its energy-efficiency initiatives, turning them into a team-building exercise that enhanced morale.
- Make wise decisions as a leader: Energy-saving projects can also acquire data and insights to make timely, relevant decisions that benefit your bottom line if you have the correct procedures in place. Fiat Chrysler, for example, has a 24-hour assembly facility in Windsor that uses real-time energy data to save money. The plant’s energy management makes intelligent decisions about running chillers, air compressors, and other equipment based on real-time data. Thanks to other energy-saving initiatives, the plant saves six figures a year in energy expenditures.
- Boost your brand’s worth: have control over the purse strings, but their mandate is rapidly expanding to embrace other forms of power. According to a survey of Canadian CFOs, nearly 60% were taking on additional responsibility for decision-making ethics in support of their company’s mission. Because sustainability is a critical component of an organization’s mission, energy efficiency is logical for this evolving role. Committing to energy efficiency sends a message to your shareholders, customers, and employees that you’re serious about running your company as efficiently as possible, which adds value to your brand. Finally, energy efficiency can help you maximize your role as a cost-cutting advocate while still promoting innovation, your employees, and your brand.