Steven Heim, Director of ESG Research
October 5, 2022
Today, we celebrate the 7th annual Energy Efficiency Day (EE Day) by joining over 1,000 regional and national businesses, utilities, universities, and individuals in promoting energy efficiency – the cheapest, quickest avenue for meeting energy needs, cutting utility bills, and reducing pollution.
Energy efficiency is vital to addressing the climate emergency through enabling growth in clean energy sources in order to outpace growing demand for energy services. The International Energy Agency’s Energy Efficiency 2021 report states that the world could be one-third more efficient as soon as 2030, and energy efficiency is a key factor in the IEA’s Net Zero by 2050 scenario. A 2019 ACEEE report showed that by 2050, energy efficiency alone could “slash US energy use and greenhouse gas emissions by 50%, getting us halfway to US climate goals.”1 Improving efficiency and reducing waste is a win-win for the environment and corporations, and it can help companies become more sustainable and more profitable.
In this age of resource scarcity, what can companies do to improve energy efficiency? And what can investors ask them to do? Companies can adopt management best practices to reduce energy and water use and eliminate resource waste by removing internal barriers to superior performance and reimagining products and processes to boost bottom lines, foster circular economies, and help avert extreme climate change. Boston Common’s Eco-Efficiency initiative encourages companies to do all of the above.
For the past seven years, Boston Common has led its own global initiative on Eco-Efficiency, and through active, sustained dialogue with companies, industries, and investors we are challenging companies to unlock opportunities to improve efficiency.
We are calling on companies to:
- Join the EP100 leadership initiative
- Employ ISO 50001 certified energy management systems in all facilities starting with the US Department of Energy’s 50001 Ready program for US facilities
- Join the New Plastics Economy Global Commitment to end plastic waste at the source
- Remove internal barriers and adopt management best practices for superior Eco-Efficiency performance
In the Autumn of 2019, Boston Common launched another phase of our Eco-Efficiency initiative incorporating a new focus on plastics and waste to promote a circular economy. The first element in our Call to Action, the EP100 initiative, promotes ambitious corporate energy productivity goals and net-zero buildings globally. We share our Eco-Efficiency framework to inform corporate governance and support companies in reaching these ambitious goals through reducing risks and capitalizing on opportunities created through improving Eco-Efficiency.
We believe the potential financial and environmental returns from Eco-Efficiency are vast. Applying Integrative Design to reduce energy use alone in buildings, transport, appliances, and industry can result in significant reductions in costs and energy use as detailed in Amory Lovins’s paper, “How big is the energy efficiency resource?”2 Through improved public policy as well as inquiry and advocacy from investors and customers, we believe companies will rise to the challenge to improve efficiency. As we look toward 2023, we are excited about the vast global opportunity for Eco-Efficiency gains, and we remain committed to doing our part in transforming this opportunity into reality.
1Lowell Ungar and Steven Nadel, “Halfway There: Energy Efficiency Can Cut Energy Use and Greenhouse Gas Emissions in Half by 2050,” American Council for Energy-Efficient Economy, September 18, 2019. https://www.aceee.org/research-report/u1907
2Amory B. Lovins, “How big is the energy efficiency resource?,” 2018 Environ. Res. Lett. 13 090401. https://rmi.org/insight/how-big-is-the-energy-efficiency-resource/