Reducing carbon emissions will improve retailers’ competitiveness
In the current economic climate, businesses are constantly looking for new ways to reduce costs. Nowhere is this more acute than in the retail industry, which faces unprecedented commercial pressures. While retailers are constantly exploring new ways to increase competitive edge, one area that is often overlooked is carbon reduction.
With energy prices rising, reducing emissions can make a clear and perhaps critical impact on the bottom line – and can be done through a relatively simple approach.
In the retail industry, store estates are a significant overhead – with lighting, heating, air conditioning and refrigeration all part of the critical sales environment – meaning that retailers’ energy use is extensive. For example, the UK’s 40 largest shopping centres consume more than £40m in energy each year, according to Retail Week. However, new research from the British Research Establishment (BRE), commissioned by NG Bailey, indicates that estate energy reduction is an overlooked opportunity.
Challenges & Actions
Only 20 per cent of FTSE100 companies are currently reporting on targets specifically related to their estate and only 27 per cent outline an estate-specific carbon reduction strategy.
Experts believe that, in the past, retailers may have been reluctant to make changes, with other more burning issues taking priority. However, this is beginning to change as new solutions are introduced that make identifying and implementing energy and carbon saving measures straightforward to manage centrally, while rolling them out across store estates. One company leading the market in this space is NG Bailey with its unique Rare Energy offering – launched in conjunction with US partner Elutions.
NG Bailey’s group business development director, Sean Wickens, explains the Rare Energy concept. He says: “This is an intelligent offering centred around a unique technology platform. The beauty of it is that we take a company’s energy management off its hands, plugging into its energy team as we roll out the solution.
“We identify the company’s energy use across its existing assets, either in a single location or on an enterprise scale. We then produce a report detailing the energy being consumed across the portfolio, before analysing and putting forward recommendations to alter the usage accordingly. This helps us achieve optimum reduction results.
“Once the solution is in place and generating cost savings and energy efficiencies, we then help the customer engage with its building occupiers to ensure behaviours support the operational changes. The four-step process that underpins Rare Energy has the ability to reduce a company’s energy usage by as much as 30 per cent. You only need consider the energy consumed across a typical retail estate to realise the cost reductions this could represent.”
One retailer currently leading the way with estate-wide carbon reductions is leading supermarket, Morrisons. Stuart Kirk, head of energy for Morrisons, commented: “In support of our carbon reduction target of reducing our absolute carbon emissions by 30 per cent by 2020, we need to consider a number of approaches to energy efficiency.
“We are supporting our investment in renewable energy with a real focus on reducing power demand within our existing estate. Our unique vertically integrated business allows us to take ownership of our carbon emissions throughout the process of taking food from field to fork. Our diverse portfolio of 500 supermarkets, supported by food manufacturing and distribution centres across the UK allows us to drive efficiencies into all aspects of our business. We were the first supermarket to be awarded the Carbon Trust Standard and we continue to lead the way in relation to energy efficient solutions such as LED lighting and refrigeration technology.
Lessons & Results
“Applying the Rare Energy framework gives us the opportunity to dig deeper into the energy efficiency of our stores. The system will allow our maintenance team to apply a step-by-step process to understanding the sources of energy demand, and to apply simple fixes without impacting our customer experience. Relatively small changes can deliver significant benefits with no impact on store environments. Rare Energy also helps us monitor the success of our in-store energy awareness campaign ‘energywise’ by providing real time information by energy source – for example, if a coldroom door is left open, we will know about it instantly.”
Here is a closer look at the core elements of the Rare Energy platform which pivot around four key areas to reduce energy consumption:
To reduce energy consumption levels it is vital to measure the efficiency levels of any current equipment. Updating old equipment such as heating and lighting with new, more energy efficient equipment can yield immediate operational cost reductions. Replacing outdated equipment and investing in newer technologies can reduce energy consumption by around 10–25 per cent.
A business should benchmark itself against organisations with buildings similar in size and energy usage to their own. Employees must take daily responsibility for energy conservation, helping to drive change throughout the organisation. Incorporating corporate energy policies into the business may also enforce this. As a result, a re-evaluation of behaviours and attitudes across the whole business can generate energy savings of 2 to 8 per cent.
Save money through the accurate forecasting and tracking of utility consumption. This capability provides businesses with tremendous advantages on rate and tariff negotiations and curtailment management. The analysis will enable a business’s procurement team to make informed and intelligent buying decisions across the whole supply chain. Potentially this could provide savings of up to 10 per cent.
The unique web-based technology platform enables the tracking and monitoring of energy usage across multiple estates through dashboard technology and integrated reporting. It incorporates faults detection and diagnosis software, easing the process of scanning building-related data. This enables businesses to execute automated energy conservation plans and develop management and response strategies within their operations. This optimises energy performance across utilities such as electricity, water and natural gas.
Other retailers should take note: energy reduction may not be the silver bullet to delivering commercial edge, but it is certainly a significant leap in the right direction.