Practical Approaches to Sustainability Initiatives
Managing sustainability initiatives and their budgets comes down to taking one of two main approaches. The traditional approach is allowing individual locations to manage their own projects and budgets at the local level. The other option is reviewing your portfolio as a whole and make upgrades under centralized management. Consider what each approach could look like for you.
Site-by-Site Approach
With a site-by-site approach, everything is localized. That means it’s up to engineering managers at each location to set their own sustainability goals, navigate costs, oversee projects, and report on progress.
Portfolio Approach
The difference with a portfolio approach is that it brings properties together to evaluate sustainability upgrades. One site might need LED as another needs solar—and the complexity of the buildings differ—but a centralized sustainability manager or partner sets goals, budgets, oversees projects, and tracks progress for the organization.
Pros and Cons of the Site-by-Site Approach
A site-by-site approach to uplgrading facilities may be what most companies are used to, but it’s often impractical for large portfolios trying to reach their targets. Weigh the pros and cons as you decide the best route to take.
Pros of the Site-by-Site Approach
- Locally tailored initiatives: Sustainability solutions can be tailored to each specific site’s needs. This is especially helpful when there's a disparity between floor plans and functionalities across individual sites.
- Emphasis on local leadership: Local leaders may have an easier time encouraging buy-in from employees and other local stakeholders compared to a corporate leader or third-party consultant.
Cons of the Site-by-Site Approach
- Complexity: Decentralized decision-making can complicate the overall approach to sustainability goals and impede broad corporate initiatives.
- Inconsistency across locations: Initiatives may look different across locations — involving different goals, budgets, steps to implementation, and metrics for tracking progress — making it difficult to assess your strategies and success (or lack thereof).
- Limited budgets: Assets may not be used effectively when you’re limited to local budgets and funding over pooled organizational assets.
- Lack of expertise: Local managers may have generalized knowledge but lack expertise when it comes to specific aspects of sustainability that could help you achieve your goals.
- Deferred maintenance: When individual sites are advocating for budget the typical but don’t receive what is needed for equipment upgrades, the typical “run to fail” approach is used leading to increased costs in the long run.
Pros and Cons of the Portfolio Approach
Pursuing a portfolio approach is often more viable in the long run to achieve your sustainability goals, but it’s not perfect. Still, the advantages generally outweigh the drawbacks for most organizations.
Pros of the Portfolio Approach
- Uniformity across the organization:When all parts of your organization are working toward sustainability under the same leadership team and with the same resources at their disposal, you can achieve consistency.
- Speed to scale: Rolling out upgrades across your portfolio is inherently more efficient. Simultaneous improvements across multiple sites add up to major cost savings and help you hit your sustainability targets sooner.
- Asset mixing: Blending high-payback projects with low-payback ones can balance overall returns. Get projects moving by leveraging combined financial benefits.
- Standardizing equipment specifications: Standardizing upgraded equipment is a smart move, especially for similar site layouts, such as in retail or food service. Standardization across locations enhances pricing power and can reduce long-term maintenance costs.
- Evidence for stakeholders: Whereas tracking progress across individual locations can be messy at best and infeasible at worst, a portfolio approach helps you demonstrate real progress toward sustainability goals, enhancing stakeholder confidence and reducing the risk of greenwashing. It’s also beneficial for proactive environmental, social, and governance reporting.
Cons of the Portfolio Approach
- Challenging power shift: Some organizations struggle to shift from local to centralized facilities management. This power shift can cause a rift between local and corporate leadership.
- Diverse site requirements: Companies with diverse requirements between sites — such as those in manufacturing — struggle to take a one-size-fits-all approach without some local-level considerations. Experienced partners like Redaptive can help overcome this challenge.
Practical Steps for Implementing a Portfolio Approach to Sustainability
Adopting a portfolio approach isn’t always easy. We often see organizations hesitate to transfer budget authority or manage capital resources. Still, the advantages make portfolio budgeting well worth the effort. What can organizations like yours do to make the switch to a portfolio approach easier?
Build Buy-In
Avoid power struggles by taking the time to foster buy-in at the local level and explain the advantages of the portfolio approach. Focus on building camaraderie across the organization and using this opportunity to strengthen your company culture.
Partner With an Energy-as-a-Service Provider
Managing sustainability initiatives across your organization is a massive lift that’s too big of a job for one person. Partner with an Energy-as-a-Service provider, such as Redaptive, to build a centralized portfolio budgeting model. Our team can help you gradually shift from regional to fully corporate centralized decision-making and can:
- Save large up-front costs for equipment upgrades, solving your capital problem and allowing you to pay based on energy savings over time.
- Manage sustainability upgrades across your entire portfolio, ensuring consistency and efficiency.
- Leverage smart metering to demonstrate progress and identify potential problems across each location.
Overall, the right Energy-as-a-Service provider can do wonders to empower your portfolio approach to sustainability improvements.
The Portfolio Approach in Action
Skeptical about the merits of a portfolio approach? Consider a success stories of one of the world's largest providers of building materials and innovative material solutions: Saint-Gobain. With a long-term vision to become carbon-neutral by 2050, Saint-Gobain partnered with Redaptive to make practical improvements across its entire portfolio.
The Redaptive team worked to retrofit efficient lighting upgrades, managing the installation of thousands of fixtures across Saint-Gobain’s 29 sites. This project alone will reduce the company’s carbon dioxide emissions by 83,500 metric tons over the next decade.
Let Us Empower Your Corporate Sustainability Goals
Sustainability initiatives require intense planning, and choosing the right practical approach can balance costs and benefits. Portfolio budgeting can provide a strategic advantage toward sustainability for the vast majority of companies. Implement a portfolio approach with Redaptive by your side and meet your energy efficiency and net-zero targets in less time, with less money and fewer headaches.
