Energy efficiency

Steps for Convincing the C-Suite to Invest in Energy Efficiency

By Megan Porter

It comes down to the bottom line. When businesses invest in energy efficiency initiatives, they can reduce operational costs, improve worker performance, make a space more attractive for customers, lower their utility bills and experience significant savings.1 But how should a sustainability advocate begin the conversation with the C-suite? What information do they need? How do they convince the decision makers?

A sustainability advocate may have plenty of ideas on how upgrading to an energy efficient technology or system can improve a business, but they often need to convince the C-suite as well.

By taking a closer look at the factors that go into how the C-suite makes decisions, you can begin to understand their point of view. Following are strategies for preparing a case and communicating with the C-suite.

Making the case for an energy efficiency investment

Begin the conversation
Engage in an open dialogue with management so that you can learn how to help the chief financial officer and the organization meet their yearly objectives. The metrics can vary, but some examples are revenue, operating expenses and profit. Learn your company’s budgeting and planning process so you can plan your requests with that calendar in mind.2

Be prepared
Find ways to explain to executives how an energy efficiency program will impact the company. If you get face time in the hallway or elevator with someone from the C-suite, be ready for a serious business conversation. Executives want to see how you handle challenges, so if you can discuss topics of mutual interest, you’ll maximize the opportunity.3

Focus on the facts
The chief financial officer is generally not the final decision maker. Typically, the decision involves other stakeholders, such as the chief executive officer, the board of directors or investors.

It’s simple. Data and facts are often more important to executives than opinions. Facts can help executives make an informed decision that could move an initiative forward for consideration at their next executive or board meeting. Support your energy efficiency initiative with data.4

For example, energy savings projects may range between 10% and 30% of annual energy spending, depending on the measures installed. Some energy efficiency projects, such as lighting, offer a faster return on investment than others.5

Communicate with business goals and metrics
Back it up. An energy efficiency project plan or budget request will have a better chance of approval when it’s communicated using the company’s metrics. Clearly illustrate how the project will help meet corporate goals.

The sustainability advocate needs to show the C-suite how high-energy consumption impacts the balance sheet and business goals. To gather data, a financial expert on the team can work with a contractor to explore the savings an investment can generate.

Communicate risk vs. ROI
Put it in perspective. Provide examples of what can happen when companies don’t have a plan for energy efficiency and the effect it can have on the budget. Help management understand the risks in terms they can understand.

For example, a business can offset the cost of projects such as heating, ventilation and air conditioning (HVAC) that provide longer paybacks through available financing. Tax credits, loans and grants are resources that can help businesses with their energy efficiency investment. 

Studies show that the advantages of investing in energy efficiency extend beyond cost savings. Energy efficiency projects can affect other areas that impact the company’s bottom line, such as productivity, employee comfort and improved customer experience.

For additional information and resources on preparing your case for the C-suite, the ENERGY STAR program features a section dedicated to building a business case for energy efficiency. It includes tools for benchmarking energy performance as well as stats on how other businesses have improved their performance.

Looking to learn more about how your business could finance an energy efficiency initiative in a cost-effective manner? Download Pacific Gas and Electric Company’s "Guide to Financing Energy Efficiency".

Sources:
  1. Pacific Gas and Electric Company, Business Resource Center
  2. Information Week, 6 Tips: How to Speak C-Suite
  3. IvyExec, Five Tips for Communicating With the C-Suite
  4. ENERGY STAR, The business case for energy efficiency
  5. IvyExec, Five Tips for Communicating With the C-Suite

Steps for Convincing the C-Suite to Invest in Energy Efficiency
  • SMB Blog Author
    Megan Porter
    Senior Program Marketing Manager at PG&E, is a recognized leader in solutions marketing for small and medium-sized businesses. Megan uses her proven and practical expertise to bring energy efficiency education to businesses in every industry. In this vital role, she develops and oversees highly successful initiatives that result in the adoption of more efficient long-term energy management behaviors.
 

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