• How financial firms can create strategic business value from sustainability

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How financial firms can create strategic business value from sustainability

No longer can banks, insurance companies, and other financial services firms look at sustainability and energy management programs as something “nice to have.” Today these initiatives have a direct impact on the corporate bottom line.

In fact, 93% of the Standard & Poor 500 CEOs surveyed say that sustainability is “essential” to their business success. The same survey by the Carbon Disclosure Project indicates that 65% of financial services executives believe that their energy saving and sustainability objectives provide a strategic business advantage.

Sustainability can deliver measurable results
Sustainability programs can achieve efficiency gains across multiple areas within a finance organization, including data centers. For example, a typical commercial bank or insurance company building portfolio includes a variety of building types for different branches, each facility with varying energy usage profiles. While savings for each building may seem small, in aggregate, a company can save $3 million, according to Deloitte report findings.

Furthermore, a 2014 KPMG report estimates that the annual energy expenditure in the financial services industry worldwide exceeds $10 billion US. By making improvements in energy procurement and enhancing energy efficiency, the financial services industry can save up to 20% in energy costs per year, or approximately $2 billion US.

Elements of a successful program
Almost 59% of respondents of a survey conducted by the International Finance Corporation reported experiencing revenue increases through the implementation of sustainability programs. To market watchers, these results in sustainable business practices demonstrate a positive investment.

A well-designed sustainability program can help finance industry companies to optimize return on investment in the following ways:

  • Enhanced brand recognition
  • Competitive advantage under difficult market conditions
  • Creation of new revenue streams
  • Margin and profitability improvements
  • Increased customer loyalty and employee engagement
  • Lower resource consumption

Laying the foundation
An effective sustainability and energy management program reflects a shift from a public relations approach to a more scientific, data-driven, long-term business strategy. What’s more, it is not a one-time project driven by a single person, but rather an ongoing process recognized by employees, customers, and stakeholders.

Successful programs follow a simple methodology that can be summarized in the following three steps:

  • Step 1: Define the strategy – Actionable strategy requires investment of time and resources and executive buy-in and commitment.
  • Step 2: Deliver efficiency – Efficiency improvements included in corporate objectives makes it easier to prioritize and fund potential energy efficiency projects and develop measurable execution plans.
  • Step 3: Sustain the results – Corporate-wide ongoing efficiency monitoring and continuous improvement are necessary to maintain sustainable results and leverage new savings opportunities.


The role of technology
Energy management software enables enterprises to efficiently monitor and analyze data and eliminate error-prone manual methods. Ideal characteristics in a software solution include:

Modular infrastructure architecture. The “pay as you grow” approach facilitates expansion of infrastructure architecture with low upfront investment and minimal risk.Open and connected software. When designed for operational efficiency, open and connected software simplifies integration across energy management, building automation, and data center management, while helping to lower costs.Accurate and actionable data collection. Devices such as meters and sensors collect and forward data to management software for processing. Managed services such as validating and monitoring data collection can further enhance data quality. Intuitive monitoring and control. Managers can access consolidated and aggregated data and visualize it in a manner that is meaningful and simplifies decision-making and action. External expertise and advanced analytics. Continuous monitoring and analysis of real-time data from building sensors, control systems, and utility meters helps to support Leadership in Energy & Environmental Design (LEED) incentives and uncover deficiencies and savings opportunities. Proactive participation of knowledgeable energy management and sustainability consultants can add further value. Low-cost wireless technologies and “cloud” delivered software and services. Leveraging today’s advanced solutions can lower energy costs across an array of building sizes and purposes. Shifting the initial implementation cost from capital expense to recurring operational costs can shorten the ROI time.

A successful and ongoing sustainability program can help a financial services company to outperform competitors, improve margin, increase customer loyalty and employee engagement, and protect the environment by reducing its overall resource consumption.

Expert insights from Schneider Electric can help financial firms to implement an energy efficiency action plan. For details, download “Impact of Sustainability and Energy Management Programs on Finance Industry Performance.”
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