The secret to becoming an eco-friendly business

This post is part of a series of interviews on the impacts of climate change and the COP21 talks in Paris. The author is one of 78 signatories to an open letter from CEOs to world leaders urging climate action.

Why should business invest in a low-carbon economy?

Successful businesses are productive, efficient and sustainable. A high-carbon economy is wasteful of limited energy resources and isn’t sustainable over time from both an economic and environmental perspective. It makes sense to use our limited energy resources as efficiently as possible and to invest in cost-effective alternative and renewable sources of energy that can be sustained over time. Many successful companies systematically attack waste at all levels of their organization, work with suppliers to improve the eco-efficiency of their supply chain and develop new sustainable products and services for their customers. Like these other leading companies, we aspire to be innovative, resource efficient, operationally excellent and therefore fully embrace the transition to a sustainable, low-carbon economy.

What commitments from the CEO statement you have signed are most important to you?

I believe that taking action to reduce an organization’s environmental and carbon footprint is a critical first step. We have made public commitments to reduce greenhouse gas emissions and improve resource efficiency since 2003. We measure and manage greenhouse gas emissions, energy, water and waste with the same discipline that we measure and manage cost, quality, safety and productivity across our enterprise. Continuous improvement is a powerful tool that is as applicable to environmental sustainability as it is to manufacturing. In order to scale our impact, we have launched a new initiative to provide our small and medium enterprise suppliers with energy management tools and training to help them become more energy efficient, sustainable and competitive.

We have found that the act of setting environmental goals, and particularly public commitments, drives increased action and investment across our private and public sector customer base. In a 2013 Johnson Controls Institute for Building Efficiency study of 3,000 executives in 10 countries, we found that organizations that set public energy or carbon reduction goals were twice as likely to have invested in energy efficiency or renewable energy in the past year and were three times more likely to increase investment in clean energy technologies in the next year. The analogy would be sharing your New Year’s resolution to lose weight with your family and friends and sharing your progress on Twitter – you will likely be much more diligent in your follow-up.

Source: Johnson Controls Institute for Building Efficiency

What are the key contributions your industry is making to accelerate climate change action?

In the building efficiency area, we have worked together with our industry peers to create and support the UN Sustainable Energy for All (SE4ALL) Energy Efficiency Accelerator platform. The genesis of this international public-private partnership started during a one-hour discussion in Davos two years ago.  A year ago, we partnered with the World Resources Institute to create the Building Efficiency Initiative as part of their Ross Center for Sustainable Cities. This group now leads the SE4ALL Building Efficiency Accelerator and is bringing together local governments, non-profits and the private sector in cities around the world to promote policies, programmes and practices that advance energy efficiency improvements in buildings.

What are the greatest challenges for businesses in your sector to overcome in tackling climate change?

I think our greatest challenge is to make the case that cost-effective technology exists today to significantly improve the efficiency of buildings and vehicles. The buildings and transportation sectors are responsible for a large percentage of greenhouse gas emissions today and, with the favourable economics of energy efficiency improvements, represent an even greater opportunity for reduction. While there is lots of buzz about a future populated with electric vehicles and net zero energy buildings, there are many off-the-shelf building and energy storage technologies that can improve energy efficiency in buildings by 25% to 50% and fuel efficiency in vehicles by 5% to 10%, all the while saving enough money for consumers to pay for the improvements over time. As important as climate change is, the prospect of saving money and helping the local economy should motivate consumers to vote for low-carbon, clean energy technologies with their wallet today while taking advantage of the full range of economic, social and environmental benefits.

Author: Alex Molinaroli, Chairman, President and CEO, Johnson Controls

Image: An aerial view shows the Lieberose solar farm, which is the world’s second biggest solar power plant and Germany’s biggest, with an area of 162 hectares (equivalent to more than 210 football fields) in Turnow-Preilack, about 150 km (93 miles) southeast of Berlin. REUTERS