Has anyone ever seriously ask this question ? Why is so few Top Management interested in implementing or investing projects to reduce the Energy Consumption for their plants/factories/building ?
This is what I believe the reasons :
1. Most top management has KPI and rewards system based on how much profit an organization can produce. The non-tangible goal like Energy Reduction is not on primary focus, it doesn’t’ drive top management to act.
2. Most top management do not have technical or engineering background. Without this information, they will evaluate every operation or projects based on Financial KPI. On the other hand, most engineering personnel are not well trained in Financial calculations and couldn’t provide a good financial evaluation of the Energy Efficiency projects to their bosses. So, how will top management understand and see the Energy Efficiency actually can bring savings (dollar and cents) to the bottom-line (profit) ?
3. Insufficient and poor regulatory policing on industry. Malaysia has EMEER act, but I would said majority of the buildings or plant owners are only interested to do the bear minimum to meet the reporting requirements. Getting a REEM to sign off the report every 6 months, and yet squeezing the fees payable to REEM for another few hundred ringgit. It is common everywhere. Just ask a REEM.
If the above 3 scenarios remain unchanged, I personally don’t see Energy Efficiency will be on the focus of every enterprise.
I think energy efficiency projects or energy management programs must be presented to the top management with strong business case and not just about saving costs. Engineers must be able to show impacts of the proposal to the business performance and other non-energy costs benefits to attract attention of decision makers.
I means, strong technical justification and savings are not enough especially for companies with energy costs relatively little compare to other operational costs.
Joshua, you have correctly put it. What’s measure gets done and get rewarded. Same goes for opposite.
Just look at all the big corporate annual report, the top executive get paid bonus when the financial result is fabulous.
Have you seen a CEO get big bonus because he has done something to his production that avoid cutting down a football field size of trees ? Answer is definite No.
From my experience, big listed companies will always rush to deliver projects in energy saving or renewalable energy project before year end. This is because they need to make a report on the ESG section of the annual report. So, the need to fulfil ESG report is bigger than benefit from the Energy saving project.