Monday, 26 September 2011

British business stalls on energy efficiency investment

Ernst and Young According to consultancy Ernst & Young, investment by British business in energy reduction measures is in danger of grinding to a halt.

Research commissioned by the firm, based on responses from board members of 250 leading UK companies, showed that whilst the overwhelming majority have invested in low cost measures such as improved temperature controls (75%) and lighting upgrades (71%), only 12% have made investment in measures with large upfront costs such as micro-generation.

The research showed that more than half had made building fabric improvements such as double glazing and insulation, but more costly measures are either being completely ignored or dismissed due to their perceived cost. Changing working practices to reduce energy costs has also been rejected - 19% haven’t even considered it, while 39% had rejected it on economic grounds.

The research found that the key barriers to business making these more significant investments (expressed by almost 80% of respondents) were the scale of sums required and the length of time it would take to show a return.

However, it also found that businesses were more likely to implement measures requiring significant upfront investment if they had a clearer understanding of how future energy developments, like the implementation of smart grids, could impact them.


Ernst and Young said ‘The findings indicate that many of the easiest energy efficiency measures have already been implemented, leaving businesses with options which either require more investment, more time and confidence, or are more operationally challenging’. This resonates with my own comments on the Fujitsu research last week that much of the effort to date by IT departments to address energy use and carbon emissions is primarily cherry-picking the easy options and achieving quick, one-off wins. To make further inroads and establish a path for longer-term savings needs more management thought and more investment. It seems that it’s true about all aspects of business, not just about ICT.

The interesting part is that investment is more likely if companies have a better understanding of what’s going to happen in the future. That’s hard to achieve, but clear government policy (and public sector example) together with a better understanding of energy risks and how a low-carbon economy will impact their businesses seems an essential part of becoming more energy-efficient. It suggests that green ICT suppliers should be more proactive in educating users on the challenges and opportunities of a low-carbon future.

© The Green IT Review

No comments:

Post a Comment