Why is Energy Efficiency Important to Businesses?

October 2, 2019
Stock photo from https://pixabay.com/photos/sky-building-blue-green-wood-4040721/ for Why is Energy Efficiency Important to Businesses?

Energy is an inevitable cost of doing business. An enterprise’s energy consumption ranges from lights and air conditioning to running machinery and powering production lines. There are several advantages of improving the efficiency of your business’ energy consumption. We highlight some of the most important ones below.

Lower Operating Costs

One of the oldest myths around energy efficiency is that only governments and large organizations have the financial muscle needed to make their processes more energy efficient. This argument was largely the result of the substantial up-front costs associated with installing renewable and green energy technology.

Even if this may have had some element of truth in decades past, the cost of eco-friendly energy installations has dropped dramatically over the years. With the enablers of energy efficiency at their lowest prices ever, businesses of all sizes can transition their energy use to eco-friendlier options and thus slash their recurrent costs for energy.

Higher Market Value of Buildings

The benefits expected from energy efficiency are stimulating growth in the demand for green buildings. The tangible outcomes of greener spaces such as greater resilience, higher reliability, reduced energy costs and lower operating expenses are an attractive proposition in a world where business leaders are under ever more pressure from boards and shareholders to keep expenditure down.

According to the Energy Star program, energy efficient buildings have higher asset value than ordinary buildings and also higher occupancy rates. Your investment in your building’s efficiency is therefore a long-term value play.

Improved Brand Image

There’s widespread public awareness on the rationale for environmental conservation, clean energy and reduced pollution. For this reason, consumers are increasingly paying attention to how the businesses they interact with are positively or negatively affecting the environment.

All other factors constant, customers are making purchase decisions based on the environmental responsibility of a seller. In addition, there are numerous ‘green awards’ that recognize businesses for energy efficiency. Newsweek, for instance, runs an annual green ranking of the 500 largest publicly-traded corporations in the world and in the US.

Employee Health

Consumers may be drawn to brands that demonstrate a commitment to eco-friendly living but so are employees. And with good reason. Energy efficiency has health benefits for workers through improved building insulation, efficient heating and cooling systems, optimized electrical equipment and better lighting.

Extended exposure to cold environments can cause a host of diseases. Overheating on the other hand can trigger dehydration. Good air quality reduces the harmful toxins, particulate and gases that employees inhale. Keeping indoor conditions within the recommended parameters translates to a healthier environment for staff.

Competitive Advantage

Energy efficiency gives businesses the ability to do more with less energy. Companies can optimize energy expenditure (e.g. compare rates for your business here), resource use, processes and overall operations. Equipment is less expensive to operate, products are more tradeable and services are more affordably delivered.

All these give the business the edge over the competition. In today’s hyper competitive market environment, even a seemingly marginal operational advantage over a competitor can deliver substantial gains in speed and sales.

Reduced Exposure to Energy Price Swings

The prices of oil, natural gas, coal and other energy sources are never static. Significant annual and seasonal fluctuations occur and these price changes can be pretty steep. Increases in the prices of these energy sources are eventually passed on to energy consumers.

This can make budgeting and forecasting a precarious undertaking where energy costs are a substantial proportion of expenditure. Adopting energy efficient and eco-friendly solutions can shield your business from unpredictable energy bills.

Regulatory Compliance

Many countries have established specific regulations around energy use, greenhouse gas emissions, pollution and waste management. The UK for instance has the Energy Savings Opportunity Scheme (ESOS), a mandatory energy audit scheme for large organizations.

Businesses that fail to comply with these environmental laws are faced with a wide range of punitive consequences. Moving to eco-friendly energy sources reduces the risk that the business could run afoul of these environmental laws.

Market Value

A business that takes energy efficiency seriously is a business that is determined to deliver maximum value to its shareholders. While many investors see green energy as something for the greater good, they also consider it an important indicator that the business is prepared for a future where energy efficiency is the norm and not the exception.


Energy efficiency is not just the right thing to do. It’s actually great for business.



Author: Ashley Lipman
Content marketing specialist
Ashley Lipman is an award-winning writer who discovered her passion for providing knowledge to readers worldwide on topics closest to her heart – all things digital. Since her first high school award in Creative Writing, she continues to deliver awesome content through various niches touching the digital sphere.

**Featured Image/Top Image Source: Pixabay.com

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