Businesses have every reason to “go green.” It’s what customers and investors want—and are coming to expect. But despite market support for decarbonization initiatives, many companies struggle to implement these projects successfully. A new report from Accenture finds that 93% of companies with net zero commitments will miss their targets unless they accelerate progress. When it comes to building energy infrastructure, organizations too often rely on a maintenance-based, run-to-fail reactive paradigm. Additionally, retrofits are outside of an organization’s core business. Due to this historical reality, these four deterrents most commonly get in the way of successful carbon reduction and sustainability programs.
Deterrent #1: Scarce Funds
Companies commonly lack sufficient internal funds to support a decarbonization project and are unaware of other available financing options. Often companies are faced with using internal funds for deferred maintenance projects or upgrades, pulling resources away from other core investments. While an internal funding pool such as a Green Revolving Fund is appealing, it’s difficult to amass sufficient initial capital to support tha first investment into corporate sustainability projects. Furthermore, funding models need to evolve to incorporate performance data, such as pay-for-performance tied to metered real-time energy data. Solar PPA solutions are examples of this type of funding solution and can be applied to other infra-assets outside of onsite generation through Energy-as-a-Service financing models.
Deterrent #2: Lack of Data
One of the biggest challenges companies face when endeavoring to implement decarbonization initiatives is a lack of data to direct or support the project. Most companies can’t properly track their asset-level energy use prior to implementing a carbon reduction program due to poor visibility into consumption data. Utility bills are often the main source of insight into consumption but offer little information on building and equipment level use. This makes it difficult to determine appropriate key performance indicators (KPIs) to implement or how best to track them. In fact, 97% of companies with decarbonization programs don’t appropriately track or measure their ESG data, making it difficult for companies interested in pursuing decarbonization to pull comps.
Deterrent #3: Insufficient Resources
Another common roadblock companies face when implementing decarbonization initiatives is insufficient resources to support the projects and execute the upgrades. The specific resources a company lacks can vary, but often include time, personnel, and specialized knowledge. Simply put, there often aren’t enough people on a team with sufficient available time in their schedules to develop the knowledge required for the project or to participate in the execution. Companies often have to choose between diverting resources away from customers and clients in favor of corporate decarbonization or refusing to reallocate and consequently stalling decarbonization initiatives.
Deterrent #4: No Guidance, Expertise, or Bandwidth
We’ve found that most companies don’t have team members with a background in corporate sustainability nor do they have the resources to hire a Chief Sustainability Officer or to develop a decarbonization department. Consultants are a more immediate option, but that’s still an expense. While other companies have corporate sustainability expertise, they lack the experience and resources to effectively plan and implement decarbonization projects and facility upgrades, such as effective vendor selection for a national rollout. These areas are typically outside of the company’s core business. The lack of funds to hire decarbonization initiative deployment experts results in a deficit of knowledge and expertise to successfully execute the project(s).
How to Overcome These Deterrents
While there are a variety of strategies and solutions that companies can choose from to help with addressing these challenges and pushing their decarbonization projects forward, the solution best equipped to holistically address and resolve each deterrent is Energy-as-a-Service (EaaS). EaaS allows companies to reduce their energy waste by approximately 30%, improving their environmental impact while saving money. Our individualized turnkey program provides the funding, expertise, resources and data collection needed to upgrade technologies for efficiency and incorporate renewable technologies. Energy-as-a-Service can also be the foundational step to create alignment and develop internal momentum for future decarbonization initiatives.
To read more about EaaS, visit our solutions page. To speak with an EaaS expert, schedule a consultation.