What corporate sustainability efforts are doing to the utility industry

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What corporate sustainability efforts are doing to the utility industry

Connecting the dots between utilities and consumer packaged goods companies doesn’t require as many dots as you might think. It does require thinking about how corporate energy goals can shake up the utility business model.

At Shelton Group, we sit in the wonderful position of working with a full spectrum of organizations to define and leverage their sustainability commitment to gain a market advantage – from utilities and building products to consumer packaged goods companies and government entities. And though utilities and consumer packaged goods companies often think they don’t have a lot in common, trying to engage Americans in an energy efficiency program actually poses many of the same challenges as trying to engage Americans in a brand’s sustainability efforts.

We get to connect the dots all day long and ensure our clients, disparate as they may sometimes seem, get to learn from each other. Today’s dot-connecting post is for utility companies. It’s about corporate sustainability (which utilities don’t think a lot about, I’m afraid) and the impact that’s having and will continue to have on their business models.

Here’s the gist: 53% of companies in the S&P 500 Index and Fortune 500 published sustainability reports in 2011 – up from 19% the year before. I imagine the number will be much larger when the dust settles and we can get a 2012 report total. If you follow Chris Laszlo’s model about how sustainability creates business value, the second step in his seven-step model is all about efficiency – reducing energy, waste and material costs. So you can safely assume that all the companies going to the trouble of actually creating a sustainability report have goals related to energy efficiency.

So, who cares about goals … they’re just goals, not stuff actually accomplished, right? Wrong. According to last year’s Johnson Controls Energy Efficiency Indicator study, 95% of the companies with publicly stated goals around energy efficiency have executed against them, performing an average of 4.3 measures. In fact, 88% of companies with internal goals have executed against them, and 55% of companies with no energy efficiency goals at all have executed measures – 2.8 on average.

Sixty-six percent of the companies we polled for our B2B Pulse study rank “energy savings and cost reductions” as the number one reason their company is focused on sustainability. And, back to the Johnson Controls study, 72% of companies with public goals related to energy intend to INCREASE their investment in efficiency and renewables in the next 12 months (and even 26% with no goal intend to do so as well).

Lacking a fully analyzed database of exactly how many companies have invested in energy efficiency and renewables and exactly what load that represents, I can’t give you an amazing “tah-dah” here about exactly how big a threat this is to the current utility business model (which relies on steady to increasing demand to pay the bills). But you should assume it’s an enormous threat, it’s very real and it’s here to stay. Utilities must be looking at new models that forecast continuously decreasing demand if they are to stay viable, and/or they need to get in the efficiency and renewables business themselves, essentially becoming ESCOs that offer a full suite of pricing and program options along with long-term contracts to all customers.

A parting thought to all the CPG companies out there (if any of you have read this far): Despite how it can sometimes seem, you are making progress against your sustainability goals. This one piece of the puzzle alone is shaking up an industry long considered unshakable. So, utilities and manufacturers and CPG companies … get together. Have more conversations. Embrace your interdependence. Talk about your plans, goals and needs, and learn from each other – and more importantly, create the future together vs. continuing to operate in the silos we’ve seen for so long.

Skills

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Posted on

February 5, 2014

About the Author

Suzanne Shelton

Suzanne Shelton

Where Suzanne sees opportunity, you can bet results will follow. Drawing on her extensive knowledge of both the advertising world and the energy and environment arena, Suzanne provides unparalleled strategic insights to our clients and to audiences around North America. Suzanne is a guest columnist in multiple publications and websites, such as GreenBiz, and she speaks at around 20 conferences a year, including Sustainable Brands, Fortune Brainstorm E and Green Build.

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Suzanne Shelton

President and CEO

Suzanne is the voice and the vision of Shelton Group. Drawing on her extensive experience in energy and the environment – and 25+ years in the marketing and advertising industry – Suzanne provides high-level strategic insights for our clients and guidance for our research and creative departments. She regularly speaks at conferences around the country, including Sustainable Brands, Fortune Brainstorm E and the International Builders’ Show, and serves as a guest columnist for publications like Fast Company, Green Builder and GreenBiz.com.

Susannah Enkema

VP Research & Insights

Susannah directs our research team and plays a key role in extracting the nuggets of information that pave the way for recommended marketing strategies and creative approaches. Susannah has nearly two decades of market research and strategy experience, including her role as president of SE Consulting, where she led the services for the likes of DIY Network and the makers of GORE-TEX®.

Laila Waggoner

VP Client Engagement

Laila leads our client engagement process, overseeing activities from both a strategic and a tactical level to ensure our work generates desired results – and clients’ satisfaction. She brings 25+ years of marketing leadership experience to her client relationships, with particular expertise in the homebuilding and remodeling industries as well as member-driven organizations, such as the Vinyl Siding Institute and Plastics Pipe Institute. Before joining Shelton Group, she led strategic marketing teams for Owens Corning’s insulation business.

Matt Brass

VP Creative

Matt steers the creative department in concepting, designing and producing campaigns. He ensures sound strategy and deep insights inform everything his team develops, and works closely with the accounts department to ensure copy and designs will meet our clients’ goals. As a designer and filmmaker himself, he’s also a principal contributor to all of Shelton’s in-house photography and videography work.

Glen L. Vesser III

VP Finance and Administration

Glen manages Shelton Group’s finances and administration, ensuring our internal systems run smoothly so we can provide exceptional client service in a seamless and timely manner. Glen’s financial and administrative expertise has been shaped by decades of experience in a variety of industries, including public accounting, media distribution and health care.

Mike Beamer

VP Business Development

Mike joined our team to help provide strategic vision and foster our agency’s growth by overseeing new business leads and managing agency marketing and website content. He arrived in Knoxville steeped in energy efficiency and renewables – he previously led client service for an agency division in Boston dedicated to marketing communications strategy and branding for B2B and B2C clients in that space.