Operational Energy

Key takeaways

Your analysis should include:

1. The overall energy consumption of the company in its operations.

2. Their non-renewable energy share and their renewable energy share (using both absolute numbers and percentages).

3. The impact of their non-renewable energy consumption, i.e. how many greenhouse gas emissions are estimated to be emitted from their energy usage alone, as energy consumption is an output.

4. How does this compare to their competitors/the industry’s average?

What is it?

Scientists define energy as the ability to do work. We have learned to change energy from one form to another, to use it to do work.

Different forms of energy exist, including:

  • Heat

  • Light

  • Motion

  • Electrical

  • Chemical

  • Gravitational

There is also a multitude of sources of energy, which can be split into two basic categories:

  • Renewable energy sources, which can be easily replenished (biomass, hydropower, geothermal, wind, solar, nuclear energy*)

  • Nonrenewable energy sources, which cannot be easily replenished (petroleum, hydrocarbon gas liquids, natural gas, coal)

*Nuclear energy can sometimes be considered by companies as renewable, so use your critical judgment when reporting their figures.

Companies consume energy, often electricity, throughout their operations, products and services.

All forms of electricity generation and consumption have an environmental impact on air, water and land, but it varies depending on the type of energy and quantity.

Energy vs Electricity

As you look through a company’s report, they will often state their electricity consumption, especially renewable electricity consumption. Keep in mind that electricity is only one part of their energy consumption. For example, the company may report that they use 50% renewable electricity, but you may find that only 15% of their total energy consumption is renewable.

Energy vs Power

Energy is the quantitative property that must be transferred to an object in order to perform work on, or to heat, the object”. In other words, it describes the quantity of work needed to perform a particular task.

Power is an “amount of energy transferred or converted per unit time”. In other words, it describes how fast a task can be done.

For example, a typical windmill delivers 3 megaWatt (MW) = 106 W. During one hour at full power, it will have produced 3 MW x 1 hour = 3 MWh (Energy = Power x Time)

Thus, energy units: GJ, Watt Hour (Wh, kWh, MWh and further multiples)

Power units: Watt (W, kW, MW and further multiples)




SDG choice

Impact assessment

In your analysis, you must look at the company’s overall operational energy consumption. Most companies now report this information in their CSR/Sustainability annual report. Make sure to report the most recent year. Yearly energy and electricity consumed should be expressed in energy units (Watt-hour and its multiples (MWh, GWh)).

You should also mention what sources of energy they are using (oil, coal, gas, nuclear, electricity, renewables, etc.)? Each one has a different impact on the environment. For example, note that nuclear energy, although not renewable, emits very little GHG compared to fossil fuels combustion.

You should report the company’s use of renewable energy. Please show this by providing both an absolute number and a percentage. However, you have to be critical of the company’s renewable energy consumption, mainly if it is through RECs (renewable energy credits), and how much of their total operation/ energy requirement it makes up.

You can use the EPA Equivalencies Calculator to translate abstract measurements (total energy consumption) into concrete terms readers can understand. It is also important to use total non-renewable energy consumption to calculate greenhouse gas emissions (CO2e). This shows outcome data as a result of the company’s non-renewable energy use. You will have to subtract out their renewable energy. Please do not provide the GHG emissions that they report, as that would be under the greenhouse gas emissions topic.

You may mention the energy efficiency initiative the company has put in place. However, this should be secondary to its current impact (i.e. total energy consumed). Suppose a company has set an initiative in place a few years prior. In that case, it is encouraged to show if the renewable energy consumption has increased since the base-line year/ if the total energy consumption has decreased etc. However, your analysis should not be based on year-on-year changes or remediation.

Finally, you may compare the company’s emissions with the industry average, or a close competitor if that number is not available.

In your analysis, make sure you add value to your readers and go beyond the company’s CSR report by not merely reporting data from the company’s report, but going the extra mile of providing additional metrics, studies, and sources to make your analysis robust and the impact value and scale are clear. Remember that energy is an output and that at Impaakt, we try to measure companies’ outcome and impact.

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