C-Level and Other Executives Suffer Energy Efficiency Perception Gap, Survey Says

Top-level executives disagree with other senior executives on how much their companies are doing to address energy efficiency, according to a study by the Economist Intelligence Unit (EIU).

In the survey by EIU and Ingersoll-Rand, 49 percent of C-suite executives said their organizations do not do enough to integrate energy efficiency into business strategy, compared to 61 percent of executives below that level.

But overall, 89 percent of respondents said their organization had found energy efficiency savings in the past three years (see chart).

“Understanding what it will take to bridge the gap is critical to make the business case for change,” said Ingersoll Rand senior vice president John W. Conover IV. “In fact, investing in energy efficiency programs is a best bet for executives looking for paybacks that are fast, may deliver up to a 7-to-1 return on investment, and engage employees at the same time.”

The study found that firms are finding it difficult to assess their energy use, with only 26 percent of respondents saying their organization has conducted an energy audit. About 22 percent said their company has not measured energy use at all. Few companies beyond the very largest firms have a chief energy officer, the study noted.

Only four percent of respondents said they had worked with suppliers on energy efficiency issues, and just 8 percent said energy efficiency was a priority for their suppliers. But for retailers and companies that outsource their manufacturing, total energy consumption occurs mostly in the supply chain, the EIU said.

The study also found that the motivations for energy efficiency improvements vary by global region. Almost 90 percent of Europeans, versus 77 percent of North Americans, say that cost savings are the biggest benefit of energy efficiency. This is likely because taxes are applied to electricity sales in Europe, making the business case for energy savings more compelling there, the study said.

The survey was conducted in the fall of 2010 and included 278 senior executives. They were evenly represented across North America and Asia Pacific, with slightly lower representation from Western Europe and other territories.

Survey results released last month found that nearly nine out of ten Fortune 1000 senior executives feel a moral responsibility to make their companies more energy efficient