Aligning procurement with sustainability has never been more important
While a growing number of companies are putting sustainability at the top of their agenda, funding is still struggling to find its way to crucial sustainability projects. Open Energy Market CEO Chris Maclean explains how companies can help align their procurement functions with sustainability, and help bridge the gap for effective renewable investment.
Research conducted by Open Energy Market, surveying 150 Chief Financial Officers (CFOs), has revealed an increased awareness on the importance of sustainability projects and the benefits they bring. In fact, the study found that an overwhelming 85% of CFOs believe that achieving net zero emissions is crucial for business growth. Many businesses are beginning to recognise that by aligning financial decisions with sustainable practices, they can futureproof their operations, enhance their reputation, and capitalise on emerging market opportunities.
However, despite this recognition, the implementation of sustainability projects has seen a decline of 8 percent from last year, indicating a gap between enthusiasm and action. Now is the time to explore the challenges businesses face in realising sustainability goals and tackle how they can bridge this gap.
While the interest in sustainability is evident, there is a clear disparity between the enthusiasm for sustainability and the actual implementation of projects. CFOs have identified several key barriers that hinder sustainability investments, including increased overhead costs (27%), managing financial risks (24%), and the complexity of renewable technology (21%).
Many businesses lack the tools and insights necessary to effectively implement renewable technologies, resulting in a gap between interest and action. Often this stems from businesses’ lack of access to accurate data on the financial and operational implications of sustainability projects.
Without comprehensive insights which align sustainability with procurement, it becomes challenging to develop robust business cases, evaluate the potential returns, and secure the necessary buy-in from stakeholders to make renewable investments. Thankfully, accurate data and insights are becoming more accessible through net zero platforms such as True, powered by Open Energy Market, which can, support businesses with making informed decisions and confidently pursuing sustainable initiatives.
Bridge over Unsustainable Waters
To address this issue, accurate insights, robust modelling, and a deep enough understanding of market volatility are essential.
Businesses need to move away from inaccurate conjecture and static spreadsheet modelling and adopt a holistic approach, which combines procurement and sustainability strategies in a dynamic, and bespoke financial model to build strong business cases for sustainability investment and develop actionable carbon-neutral strategies.
By doing so, businesses can build confidence in effective renewable investment and expedite the drive towards achieving net zero emissions. They can identify and prioritise the most impactful sustainability initiatives, allocate resources effectively, and monitor progress towards their carbon-neutral goals. This proactive, data-led approach accelerates business leaders’ ‘speed to yes’ and the efficiency and effectiveness of sustainability investments.
Energy procurement specialists possess in-depth knowledge of the constantly evolving energy market, especially in the realm of renewable energy. By leveraging accurate data and robust modelling techniques, such specialists can offer businesses valuable insights into the financial implications of sustainability investments.
Additionally, energy procurement specialists provide access to a wide network of partners and advisors who can offer tailored guidance and support for implementing renewable investments to help businesses build confidence in their sustainability projects.
Introducing Innovative Platforms
Net zero platforms such as True, powered Open Energy Market, uses expertise and data-led insights, play a transformative role in providing real-time visibility into the effectiveness of an organisation’s energy mix. These platforms enable businesses to analyse and optimise their total energy usage, leveraging data-driven insights and dynamic financial modelling. By adopting such platforms, teams can develop robust sustainability business cases, mitigate risks, and accurately propose and report on the financial viability of renewable projects.
The growing recognition of sustainable energy practices within businesses and their wider benefits indicates a readiness to drive net zero forward. However, the lack of implemented projects highlights the difficulty businesses face in confidently making renewable investment decisions.
By making use of innovative platforms which combine procurement and sustainability strategies, businesses can harness data-driven insights to guide sustainability strategies. This ensures businesses can make informed decisions, overcome barriers hindering their net zero ambitions, and accelerate the transition to a more sustainable future.
Founded in 2013, Open Energy Market delivers smart energy services powering businesses and their net zero drives. Chris Maclean is the firm’s co-founder and CEO.