There's this illustration that ran in a recent New Yorker: two scrappy mechanics in rumpled jumpsuits look on as a businessman—shirt and tie covered in grease—wrenches away at the undercarriage of a large sedan, all while planted firmly in an ergonomic office chair.
The caption: "I hate retraining CEOs."
Rocky Mountain Institute is partnering with the Environmental Defense Fund to preempt the problem. EDF's Climate Corps project places tomorrow's CEOs—students from America's top business schools—in internships at Fortune 5000 companies with large energy-intensive operations. The goal: suss-out areas of wasted energy and demonstrate the value of efficiency for both business and climate.
For the second year running, Millie Chu Baird, project manager for Climate Corps, sought RMI's expertise when considering the tools these students would need for their jobs.
"RMI was my first choice when it came to energy efficiency," says Baird. "The [Institute] provided the technical backbone and cutting-edge research for this work."
Before joining host companies, Climate Corps Fellows convene in San Francisco for a weekend of exhaustive training on the principles of energy efficiency. For the past two summers, RMI has authored content for the Climate Corps training manual and developed the curriculum for the training sessions, complete with hands-on exercises, field trips and guest lecturers. The Fellows leave San Francisco with an extensive knowledge of whole-system efficiency in lighting, HVAC, data centers, auditing, and office equipment. Then, RMI remains on expert retainer to advise the students throughout their internships.
Not your typical MBAs, these students eschewed internships on Wall Street and chose to explore the operational aspects of business at companies like Dell, Cisco, and Sony Entertainment. Over the summer, they built business models for reducing energy usage and environmental impact. The program has been effective. Last year's group discovered potential savings of $35 million through efficiency recommendations.
With the American Clean Energy and Security Act of 2009 moving to the Senate in September, there has been increased interest in energy efficiency. To some, the concept of efficiency seems like a given—the inherent quality of all well-run businesses. But, as RMI has frequently shown, what might seem obvious to us is commonly missed in the complexities of business management.
"The first hurdle is getting the companies on board," says Baird. "After that, 75 percent of barriers are passed."
The rest of the hurdles arise from a range of communications problems. What happens at the operational level is frequently overlooked by those making the capital and equipment purchases? "The people paying the bills are rarely the people that buy the equipment." says Russell Baruffi, a student currently interning with Sony Entertainment.
The central message of energy efficiency is pretty clear: vast sums of money are lost through poor planning in energy usage. The costs affect the bottom line, and, when considering the correlation of energy usage to carbon emissions, the environment, too.
Baruffi sums it up thus: "Our work identifying low-cost emissions reduction projects not only ups the amount of carbon that we can reduce per dollar, it sets the precedent that a lower-carbon economy can and will be a more productive and profitable economy."
Unfortunately, in the world of sustainability, alternative energy and all things green, efficiency has been a harder sell. Many observers say it lacks that somewhat sexy status attributed to renewables, like wind and solar, and as a concept of business operations, it is not easily represented in colorful advertisements.
But as Amory Lovins noted during the recent Virtual Energy Forum, "Many managers don't understand that even if energy is a small part of a company's expense, saving it drops straight to the bottom line."
It's complex, laborious work; but it's a simple idea. By putting wrenches in the hands of tomorrow's leaders, Rocky Mountain Institute and the Environmental Defense Fund are exposing overlooked opportunities and demonstrating to the business community that profit and energy efficiency are one and the same.
Ben Holland is RMI's Outreach Coordinator
--Published July 2009