Seven Steps to Energy Independence

by | Jan 14, 2013

There are few certainties in the world, but everyone agrees that the cost of energy will continue to rise and rise.

What if we in business could shake off our energy shackles, cut our energy costs, and reduce our carbon emissions while improving our service to our customers?

You can do all that by investing in renewable energy, which is what we are doing at IKEA. We are committed to become energy independent worldwide by 2020. By this we mean producing more (renewable) energy than we consume throughout our global business.

We have allocated €1.5 billion for investment in renewables by 2015. So far, we have installed more than 342,000 solar panels on IKEA stores and buildings across the world, and we have invested in 126 wind turbines in six countries. These initiatives mark a major milestone in our ambition to be energy independent. As a sign of our rapid progress, our operations in Sweden will use only renewable energy within the next 12-18 months.

There are many businesses that could do what we’re doing and reap the benefits for themselves, their customers and society.

We’re getting closer to our 2020 goal by investing mainly in wind turbines and photovoltaics – we love the wind and the sun.  There is plenty of clean energy available from nature and we intend to use it to grow our business.

Besides higher energy prices, we can confidently expect carbon pricing too as increased evidence of climate change makes political action inevitable. This is another reason why boosting energy efficiency and using renewables makes good business sense.

Becoming energy independent requires a mindset that reflects a clear understanding of what is happening to our planet and how business can make a positive contribution to a better world.

Here is our own 3-part business case for energy independence through renewables:

Future. The world is facing severe resource constraints and increased threats from climate change.  Harnessing renewable energy is good for the environment and provides us with a long term supply of affordable energy that will protect our business from energy shocks.

Competition. Predictable energy costs, combined with ever-greater energy efficiency, helps us cut costs and boosts our competitiveness. We want to provide customers with quality products at affordable prices.  Our renewable energy   strategy helps us do that as we have greater control over our costs and we do not pass any increases on to our customers. .

Values.  Our actions are driven by our values.  We want our business to have a positive impact on the world. That is why we call our new sustainability strategy People & Planet Positive. It focuses on resources and independence, on helping our customers live more sustainable lives, and helping create a better life for people and communities.

If energy independence sounds attractive, here are seven tips that might help you get there.

1.  Start with energy efficiency.  This has a quick payback and reduces the amount of energy you will need.

2. Take a longer-term view of your return on investment (ROI). This might be easier for those businesses that are not part of the quarterly reporting cycle.  But if you really believe in the long-term future of your business, you will find a way to plan accordingly – we have.

3. Choose your partners carefully.  You can’t do this alone and nor would you want to – there is a lot expertise out there.  Make sure you choose partners with the same values and expectations as your business.

4. Use scale to cut costs.  Bigger companies have more leverage because they can use their scale to save costs.  We are doing this with our investments solar and wind generation, and are also helping our customers by converting all our lighting to super-efficient LED and making it much more affordable.

5. Work with your supply chain.  You and they can reap benefits by becoming more energy efficient and making greater use of renewable, helping to keep production costs manageable.  We have set targets to achieve this.

6. Engage co-workers.  Knowing the company you work for is committed to sustainability and using renewable energy, can help increase pride as well as attract new talent. It’s also a crucial step in improving energy efficiency as we call all do our bit to use less.

7. Be confident and persistent.  The energy landscape changes daily – stay with it and keep your eyes on the (renewable) horizon.

Steve Howard is chief sustainability officer of IKEA Group. Read more like this at People & Planet Positive.

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