User Manual

6
Business Resiliency and Energy Innovation
switch. But the rise of cloud computing
and volatile energy prices have made
electricity a much larger expense for
many technology companies. Thus,
in 2011, Rob Bernard, the company’s
senior sustainability executive, asked
Microsoft’s risk assessment team to
look at the rm’s exposure. The team
concluded that Microsoft’s risk exposure
was high. Emerging carbon regulations
and volatile energy prices were likely
to drive signicant expense. Energy
promptly landed on the C-suite agenda.
The public’s growing mistrust of big
business is another impetus to put a
strategic lens on energy. Increasingly,
businesses realize that they need to
meet the expectations of multiple
stakeholders, including members of
the communities in which they operate.
“We have found that more advanced
organizations understand that 100%
of their expenditures can’t be allocated
to just shareholders, product lines, and
markets,” says DiClaudio. “Some has
to be invested in the community,
whose members are often concerned
with environmental issues such as
carbon emissions.”
McKinsey’s Tai observes that although
energy savings may not be a large
enough expense to attract C-suite
attention, those savings can be
considerable at energy intensive sites
such as a manufacturing plant. These
facilities have probably implemented a
number of energy-eciency initiatives.
C-suite members often become aware of
these and then implement several across
the enterprise as part of operational
eciency programs.
California-based Prologis has gone a step
further. The global warehouse company
realized that generating solar energy on
its roofs can become a signicant source
of revenue. Although Prologis occupies
the number three spot behind Target
and Walmart, its warehouses aren’t
as energy intensive as retail facilities
with extensive lighting, refrigeration,
heating, and computers. But Prologis
realized that it could mount solar panels
on the at roofs of the warehouses it
leases to companies and sell the power
it generates to local utilities. “We were
motivated to generate clean power but
also to leverage an underutilized asset,”
says Matt Singleton, senior vice president
of global energy and development. “This
is a for-prot activity.”
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Concerns over climate change are another
driver of on-site power generation.
The survey found that about 40% of
organizations have a climate change
initiative in place or plan to within the
next three years. These organizations are
twice as likely to generate power on-site
as are others. “Companies are concerned
about their carbon footprint and want
to have an impact,” says Winston. “As
the price of renewable forms of energy
continues to drop, the correlation will go
up even more.”
Getting the Ball Rolling
Getting the ball rolling can be tough if
energy eciency isn’t a top corporate
agenda item. Among companies that
have the most substantial energy
strategies, the process often starts with
a high-level sustainability ocer raising
energy concerns, which can trigger a
thorough analysis and action. Winston
describes the process at Microsoft to
illustrate.
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Like many organizations,
Microsoft viewed electricity as an
inexpensive commodity that came
instantly when someone ipped a
Utilities are also playing an increasingly helpful role, and only
34% of respondents see their efforts to preserve the status quo
as a major barrier to energy innovation.