(Kazor.com) Whatever the driving force, energy efficiency will be an integral part of staying successful in this competitive business environment. The phrase, “going ‘green’ to make ‘green’” holds true. Global Business Network (GBN) in cooperation with the U.S. Environmental Protection Agency (EPA) and with the help of twenty major U.S. company senior executives have identified a set of strategies that will help businesses act now to prepare for future energy-related risks.
Plan for the Future
Scenario planning is a strategic planning tool that has been in existence for a while. Industry leaders have implemented this strategy to identify and develop plans for coping with some of the major risks the future might hold. The aim is to highlight the risks and uncertainties of the future that one should be starting to deal with now.
For example, Shell used scenario development as a basis for formulating strategies to cope with the possibility of OPEC reducing oil supply and raising prices, an eventuality no other oil company foresaw. When this happened in 1973, within two years Shell went from the world’s eight largest oil company to the second largest.
The executive group participating in GBN’s workshops created the following four plausible “roads” ahead, each posing a specific challenge:
• The Same Road – where the world continues much in the same direction it appears to be going now in regard to energy and environmental concerns around climate change
• The Long Road – where the world undergoes a significant shift in the economic, geopolitical and energy centers of gravity
• The Broken Road – where the world continues much in the same way as today, but is then hit by a severe event that overturns established systems and rules
• The Fast Road – where reasoned decisions and investments about energy efficiency and climate risk are made early enough to make a difference
Take Action Now
All twenty-business leaders were asked to explore the impacts of these four “road” scenarios in regards to energy strategy and management in their companies. “Our group of business executives looked to the scenarios and considered the strategies that would enable a company to successfully travel along whichever future actually emerges,” write Erik Smith and Peter Schwartz, authors of GBN’s ‘Energy Strategy for the Road Ahead’ article.
The group concluded all businesses should take the following five robust steps to prepare and ensure energy success regardless of the future:
1. Master the fundamentals of energy efficiency.
Build the culture through leadership and with the help of experts. Set goals, measure and track energy performance, establish accountability and other systems across the business.
2. Take both a longer and broader view of investments and strategic decisions about energy.
Make major strategic decisions (e.g. technology choices, facility location for new builds) with energy cost, use and supply in mind. See the entire Energy Value Chain, including upstream inputs from suppliers (into internal operations) and downstream outputs to customers (from internal operations).
3. Search out business transformation opportunities in the way the business manages, procures and uses energy.
Frame energy as a lever for positive growth and change within the business, not simply a cost. Be innovative and aggressive in pursuing and publicizing new product and service offerings based on new energy technologies and supplies.
4. Prepare contingent strategies for emergent future scenarios.
Rehearse specific aspects of the “road ahead”, including substantial and sustained swings in energy price and supply, severe weather events and penalties or incentives around energy use and greenhouse gas emissions. Actively manage exposure to risks and ready plans. Monitor for signs of which “road ahead” is emerging.
5. Take personal action.
Both corporate leaders and employees can take numerous green actions today whether at work our outside.
Content and information retrieved from the following source (credited to):
Smith, Erik & Schwartz, Peter. (2007). Energy Strategy for the Road Ahead (Global Business Network, a member of the Monitor Group). Retrieved from http://gbn.com/articles/pdfs/GBN_EPA_Energy%20Strategy%20Scenarios.pdf.
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