What’s in it for the Chief Financial Officer? The Financial Dynamics of Corporate Energy Management Author(s) Christopher Russell

Abstract

Energy efficiency’s promise of cost savings evokes little more
than a yawn from industry’s hard-nosed corporate leaders. Despite
all its good work, the efficiency community usually offers a “one size
fits all” message that is assumed to resonate evenly at all times, across
and within all industrial organizations. In reality, each manufacturing
corporation is a loose confederation of functions—operations, market-
ing, engineering, finance, etc.—all of which are often in competition
with each other for internal resources. These departments have very
different accountabilities and expectations with respect to financial
performance. While the organization as a whole “seeks profit,” de-
partmental goals can often frustrate that pursuit. Energy management
clearly reveals this conundrum. Energy use transcends departmental
boundaries, creating coordination challenges for an energy manager.
This article offers financial justification for energy improvements with
nuances for the segmented audience that is typical within a single
corporate entity. The Strategic Profit Model will be used to show
how corporate-wide financial outcomes are driven by departmental
agendas. For the energy efficiency community, this exercise helps to
coordinate key business managers and investors who would otherwise
resist energy efficiency—by providing answers to the perennial ques-
tion “What’s in it for me?”