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What’s in it for the Chief Financial Officer? The Financial Dynamics of Corporate Energy Management
Volume 1, Issue 2
Authors:
Christopher Russell, consultant
Abstract:
Energy efficiency’s promise of cost savings evokes little more than a yawn from industry’s hard-nosed corporate leaders. Despite all its good work, the efficiency community usually offers a “one size fits all” message that is assumed to resonate evenly at all times, across and within all industrial organizations. In reality, each manufacturing corporation is a loose confederation of functions—operations, marketing, engineering, finance, and so on—all of which are often in competition with each other for internal resources. These departments have very different accountabilities and expectations with respect to financial performance. While the organization as a whole “seeks profit,” departmental goals can often frustrate that pursuit. Energy management clearly reveals this conundrum. Energy use transcends departmental boundaries, creating coordination challenges for an energy manager. This paper offers a financial justification for energy improvements that is nuanced for the segmented audience that is typical within a single corporate entity. The Strategic Profit Model will be used to show how corporate-wide financial outcomes are driven by departmental agendas. For the energy efficiency community, this exercise helps to coordinate key business managers and investors that would otherwise resist energy efficiency—by providing answers to the perennial question, “what’s in it for me?”
Full Text (PDF)
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