10 steps to generate cost reductions by reducing your carbon footprint

In my previous blog, I made the connection between addressing issues of climate change/carbon footprints and good cost management. Here are some tips about how you could do this in your workplace:

1. Start by reviewing your direct energy costs, your travel costs and then your indirect supplier costs. You could even extend this further to consider carbon embodied in materials you use.

2. Review your direct energy use – electricity, gas and heating fuel. Identify the areas of greatest usage in your organisation and those which have the highest impact in terms of cost and/or carbon footprint. Use this information to determine the priority for a more detailed review.

3. Assess the usage patterns identified from this data and consider whether they pass the ‘make sense test’. Are seasonal/weekday/hourly/ day vs night variations as you would expect for your business? If not, why not?

a) Is equipment being left on unnecessarily?

b) Is start up and/or shutdown as you would expect?

4. Conduct a detailed site survey to determine which equipment or processes are the most energy-hungry. Consider the following questions:

a) Is that equipment turned off when not in use?

b) Is it energy efficient – by design, maintenance and how it’s used?

c) Is it fit for purpose?

5. Review your organisation’s processes:

a) Would it be possible to cut out any stages in the process without affecting quality?

b) Can the amount of re-work be reduced by improving quality checking?

c) How can your processes be redesigned to improve efficiency?

6. Consider your organisation’s culture:

a) Is your Energy Policy clear and understood by all employees?

b) Is this reflected in their personal targets?

c) Do you have Energy Champions to provide a readily-accessible source of expertise?

d) What do you need to do to encourage all staff to take this seriously and reduce energy consumption wherever they can?

e) Do you have a highly visible and well-used staff suggestion scheme? They will probably have some great ideas about where savings could be found.

7. Consider your organisation’s equipment maintenance and replacement policy:

a) Ensure that energy efficiency is a key element in decision-making regarding replacement kit.

b) Be aware of the whole-of-life costs of any piece of equipment. Do increased energy costs outweigh purchase cost savings?

c) Can existing equipment be made more energy efficient without having to completely replace it?

d) Ensure that equipment is well-maintained, which will keep it more energy efficient as well as prolonging its life.

8. Consider your travel policy:

a) How much do you spend on business travel each year? Include costs such as car leasing, parking, fuel, insurance, air travel and travel management costs.

b) How could these costs be better managed to generate cost reductions? Eg would it be better to have a pool car or company bicycles than company cars?

c) Are all journeys necessary? Could some face-to-face meetings be held using telephone or video conferencing instead? The supporting technology is improving all the time – if you were to reduce the number of business trips by 25%, how much difference would that make in terms of cost reduction and carbon emissions? This is exactly what Vodafone has done, resulting in double digit millions of cost savings. (Source: Tandberg case study)

9. Consider your distribution channels:

a) Do you need to distribute a physical product?

b) Can you reduce the number of journeys or organise them in such a way as to reduce the number of miles travelled?

c) Is the vehicle fleet fuel efficient?

d) Can you minimise packaging and the size of containers without damaging your goods?

10. Consider how you could encourage your suppliers to manage their energy use in a similar way. If this leads to cost reductions for them, they will be able to pass some of this on to you, creating a virtuous circle of benefit.

This is just a small number of suggestions to get you started. There are plenty of things you can action on your own, but if you would like some specialist help, please do give me a call.