Greening Your Operations

Transform into a more sustainable organization

Alberta was one of the first provinces with emissions regulations and many companies, especially large emitters, are working towards meeting regulatory requirements. Some companies are taking the opportunity to review of their operational models to also find ways to achieve the broader goals of reducing costs and increasing efficiencies.

Whether it's through increased operational efficiency or investing in new technologies, companies must develop a strategy to reduce their greenhouse gas emissions.

In the midst of conducting an operational review or transformation, companies that engage their front-line workers in the change process are likelier to create long-term value out of the process. Continuous improvement is kept in motion by establishing a work culture in which employees are empowered and engaged.

“When you undertake transformation, different elements of sustainability should be considered,” says Ian Kane, a Calgary-based director in the Performance Improvement practice of PricewaterhouseCoopers LLP. “Introducing sustainability metrics in addition to performance targets helps people see the interconnectedness and value between being more environmentally and socially conscious and operational performance which drives service quality."

Setting targets requires many companies to reassess their data capture and management systems. Again, this provides the opportunity to unveil long-term cost savings through automation, new systems and processes, and enhanced performance management.

Kane says that successfully bringing operational efficiency in line with a sustainability plan has a few notable components. First, major change requires an executive champion and should be tied to the overall corporate strategy. The expected benefits need to be well communicated especially to front line employees who may stand to be empowered in the change effort and help to uncover simple solutions that help change stick.

“The second part is to actually go through the business and find out where all the opportunities are to reduce energy consumption and greenhouse gas emissions” says Kane.

Once complete, the last step is to put a plan in place to reduce the organization’s greenhouse gas emissions. Understanding your greenhouse gas inventory is a critical component in understanding your climate change risks. This is a concern for publicly traded companies because the Securities and Exchange Commission has announced further recommendations for climate change risk disclosure in 10-K documents. Companies greenhouse gas emissions and climate change risk is becoming more top of mind for investors and shareholders and is becoming essential when there are significant ties to financial performance and the management of risk by an organization.

“There is a trend for more companies to disclose information about their climate change risks, from both a regulatory perspective and a climatic change perspective, in public documents,” says Christine Schuh, a former PwC associate partner in Calgary and former leader of the Climate Change Services group.

Energy companies can reduce their greenhouse gas emissions by looking for new techniques in extraction and operations, and increasing operational efficiencies such as methane capture programs. Energy companies may also want to pursue greenhouse gas offsets, either through purchase or creation. Many companies are examining the use of carbon capture and storage technologies to generate greenhouse gas offsets.

Asset management is another way in which companies can look to reduce their emissions. Companies must evaluate the life cycle of their equipment – in some cases an upfront investment in new equipment and technology will help to manage operations more efficiently including the reduction of the energy used. In other cases, just running equipment less often can make a big difference, Kane says, and will reduce the cost of maintenance because the equipment isn’t turned on around the clock.

Other industries in Alberta – such as retail, transportation, communications, and construction – can also reduce their carbon footprint. Tactics include: using hybrid vehicles for company fleets; cutting back on business travel and using video conferencing instead; sourcing materials close to operations; using renewable sources of energy whenever possible; or simply turning off lights when not in use.

“We can’t avoid this issue any longer,” Schuh explains. “We have to do something about it in the short term to deal with the long term.”