Heeding the SOS: Sustainable Operations Summit 2012
by Helen Serebin, MBA Candidate 2012, Sustainability
Last week, between April 18-20, sustainists of all varieties (credit goes to Scott Seydel, chairman of Global Green for this neologism) met to discuss operationalizing sustainability.
In the spirit of continuous improvement in operations management and sustainability, I offer the following observations.
1) Sustainability = COST EFFICIENCY
Energy costs represent 40% of commercial building operating costs. Addressing energy is a business necessity, not a ‘nice-to-have.’ Another way to look at this is that there is no sustainability (cost efficiency) without energy efficiency. (Andreas Schierenbeck, Siemens)
2) Sustainability = Cost Efficiency = CONTINUAL PROCESS
Sustainability is a moving target. There is no such thing as getting this perfect the first time. Don’t wait until sustainability version 5.0 is here. [For the nay-sayers out there who say why spend money for a system that will have to re-done, just wait until it is perfected, here’s the response. These folks would have broke even with their version 2.0 investment long before version 5.0.] Don’t take my word for it: talk to Amory Lovins or Anthony Malkin if you don’t believe me.
3) Cost Efficiency = Energy Efficiency = National Defense = DEFICIT
US Department of Defense uses 30 million barrels of oil a year. THEREFORE:
When 1 barrel of oil increases $US 1 => U.S. budget increases $US 30,000,000 M (annual)
When 1 barrel of oil goes increases $US 38 => U.S. budget increases $US 11,400,000,000 B (annual)
THERE ARE NO APPROPRIATIONS IN THE US BUDGET FOR THIS VOLATILITY
[Tom Hicks, Deputy Assistant Secretary of Energy – United States Navy]
4) Cost Efficiency = Energy Efficiency = JOBS
Buildings can’t move. Energy retrofits are local jobs.
5) Energy Efficiency = FINANCING MECHANISMS
Finance Folks: The estimated value of energy/climate-change projects is $US 20 TRILLION.
The easier the Finance sector makes it to get financing, the faster energy efficiency will happen, AND the quicker the banks will make their profits.
6) Sustainability = Cost Efficiency = STORYTELLING
We need to tell compelling stories about what why energy efficiency is important. Summer Oakes put it chillingly. She is 27 now. By the time she is 50, lions will be extinct. By the time she is 90, 95% of the coral reefs will be dead.
7) Sustainability = Cost Efficiency = FUNDING MECHANISMS & FOCUS
- Property-Assessed Clean Energy (PACE)
- Focus on outcomes, not interests
- Yield vs. Risk: When you buy a portfolio do you just look at yield and not risk? Investing and buying oil is illogical. You are not accounting for risk.