Companies such as Wal-Mar, Target, IKEA and Tesco have turned to the environmental sustainability. They have started a new “green” policy and are meeting the sustainability goals they have set. Many other giants of the world market are following them – Nestle, Procter & Gamble, Coca-Cola, PepsiCo, Kraft, Johnson & Johnson, and Unilever have also expressed their willingness to turn to the green attitude and start building up a plan for new energy use to become environmentally friendly.
Despite of a variety of ecological strategies implemented by the companies, there is one common element present in all of them – green energy. Its significance comes from its power to influence the companies in important economic, environmental and social areas. Economical aspect concerns the matter of fossil fuels costs which are at lower risk because of conserving energy. Apart from this, many customers have become loyal to eco-friendly companies, thus, being green repays. Environmentally, it is reducing the emission of greenhouse gasses which must become the main concern. In terms of the social area, companies need to consider how their activity will affect the community.
Greenhouse gases emission by United States
Reduce energy consumption
Saving energy is a starting point for all sustainability strategies. Energy efficiency projects bring good profits in a short period of time. Companies, like Tesco or AT&T, admit that implementing such projects helped them save a great amount of money. Nonetheless, the profitable energy efficiency programs alone do not meet the goal of sustainability, they need to be mixed with the less beneficial renewable energy projects.
Energy projects demand a great capital and lots of investments in the beginning. On the other hand, companies need projects with limited initial capital and the usage of internal resources at the minimum level. Hence, the energy projects vary in degrees of commitment. These are:
- Ownership. This option involves a big investment. When it comes to return, it is 8-10 percent over 20 years of the project which is not highly profitable for the average retailer. But it has other advantages. These are: ability to obtain internal expertise, control over production and development and independence from the conventional energy and the green energy providers.
- Contracting. Here, the matter of project design, financing, construction and operation remain on the developer’s side. Choosing this option purchase of energy can be cheaper, even below market prices. Its disadvantage can be the contracting firm’s inability to obtain a green expertise.
- Power Purchase Agreements. Such an agreement is made with a developer or utility for 10-20 years. It assumes a purchase of green power at a fixed price. No resources or capital are required, yet it involves a long-term commitment and does not give a possibility to develop internal expertise.
- Certification. Renewable energy certificates are the least profitable way of green commitment. Companies declare turning to green by purchasing a commitment incremental to their current costs of energy.
3 useful final suggestions
- Find a developing or financing partner.
- Find the best solution for you. Do not focus on cross-subsidizing energy efficiency and renewable energy profits, but look through different options and then decide which is most profitable for you.
- Do not assume that sustainability means low profits. The potential returns can be lower than the industry average, but good management and finding an appropriate partner in the energy supply market can solve this problem.