Does ESG Have to Cost the Earth?
The term ESG may be new to most, and while it has only recently emerged as a global force, it dates as far back as 2005. Its aspirational beginnings vaporised quickly when talk of buildings with poor ESG ratings becoming “stranded assets” entered the narrative. Nobody wants to find themselves with one (or many) of those. A panic of sorts has now set in with one company trying to outdo the other when announcing their ESG commitments.
However, when you look under the bonnet, the substance of many of these commitments heavily relies on carbon offsetting with little or no change to the actual energy expenditure of the building itself. This won’t wash for long and the inevitable will become manifest sooner than later. Improved energy efficiency through demand management has to play a key role in everyone's ESG strategy.
Achieving Net Zero
Building up an ESG environmental score isn’t just horribly expensive. Bar exceptional circumstances, most buildings don’t have the right location, footprint or roof space to contemplate meaningful onsite renewable electricity generation.
The reality is that there are costs and complexities to achieving net zero locally.
In theory, net zero is achieved if your building uses grid supplied electricity that is 100% green for all its energy requirements. But where does the electricity come from on a calm cloudy day when the windmills and solar panels are off or at minimal output? Can the grid even cope with a large-scale transition from boiler heating to electricity powered heat pumps?
Battery storage for the grid doesn’t yet exist and is some distance away from being viable, if it will ever be. Hydrogen may hold the key but that’s also a distant target and it too has some hurdles to jump.
For many, the question of heat generation remains open. Should they move their building’s heat generation to electrical heat pumps or hold out for blue or green hydrogen? With those unknowns, what actions can be taken now and with what urgency must they be taken?
Either way, now is the time to make sure that the amount of energy being consumed is minimised. If not, then the capital cost, footprint and future operating cost of a renewable plant serving a larger than necessary load will be considerably higher and a bigger headache to implement.
Many building operators believe they have already applied the affordable energy optimisations at their premises. It may seem that their next ESG step will inevitably be expensive with a long payback, if it even pays back at all. This may not be so.
At Symphony Energy, we have developed a useful online calculator to determine what savings remain at a given premises. The calculation process conservatively correlates with savings that we have generated for our clients on past projects — all of which, without exception, have yielded huge levels of energy efficiency.
Enter a few building data points and the calculator estimates what energy savings can yield within a 4-year simple payback. With typical savings of 30-50%, such an ROI makes business sense irrespective of ESG pressures. If you have five minutes, I recommend you give it a try.
The truth is that ESG doesn’t have to cost the earth — we just need to rethink the way that our buildings use energy and shape a more sustainable future for business.
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