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Energy conservation projects – how they increase shareholder value and attract corporate investors

Energy conservation projects - increases company value

New research suggests that energy conservation projects can improve corporate performance and shareholder value as “Socially Responsible Investors” flock to companies with low exposures to negative environmental, social and governance risks.

According to an article published on ASX.com.au, investors are waking up to the importance of sustainable investing. Investors are increasingly realising that companies that take environmental and social considerations seriously and implement positive actions (such as for example, investing in energy conservation projects ), are reducing financial and corporate risks and therefore  more likely to represent better long-term investments.

From an investor’s perspective, sustainable investing involves taking environmental, social and governance (ESG) and ethical considerations into account to better assess and manage risk with the aim of generating sustainable, long-term returns.

ESG factors includes:

Companies with stronger ESG characteristics are typically lower-risk, better long-term investments, according to MSCI – one of the world’s largest index providers.

MSCI evaluated the influence of these factors across top companies and published their findings in a 2017 research paper (“Foundations of ESG investing”) including data that supports the assertion that high ESG rated companies – with a demonstrated commitment to improving these ESG issues – are more profitable, paid higher dividends and enjoy significantly improved corporate performance.

MSCI also found that an improvement in a company’s ESG characteristics led to increasing valuations over time.

Energy Conservation Projects helps improve ESG profile - igher profitability and dividends

Source: MSCI

Energy Conservation Projects helps improve ESG profile - lower risk

Source: MSCI

 

Organisations with a strong ESG profile have a much lower exposure to negative risks related to environmental, social and governance issues. They also have a higher exposure to related opportunities, which can lead to material cost advantages, improved efficiencies and new revenue sources.

 

Creating value through energy conservation projects

For example, organisations that invest in energy conservation projects, otherwise known as energy savings projects that include a variety of energy conservation measures designed to improve energy efficiency, not only strengthens its ESG profile, but also achieves the following outcomes:

The overall impact of energy conservation projects on corporate performance cannot be overstated. (See also 7 reasons why energy conservation is a smart business strategy)

Energy Conservation Projects – best practice procurement and funding models

  1. Energy Performance Contracting (EPC)
  2. Guaranteed Energy Savings Project (GESP)™
  3. Energy Services Agreement (ESA), such as the Ecosave Services Agreement™

Who can help my company to implement energy conservation projects?

Energy Services Companies (ESCOs) are specialist providers of energy conservation solutions.
Engaging a single-point-of-contact provider of energy conservation projects is a good place to start as they help to streamline all aspects of project design, management and delivery.

Look for ESCOs that offer the following:

The main benefit of partnering with an ESCO of the above description is that it transfers corporate risk to the ESCO and gives you certainty of agreed performance outcomes from the energy conservation projects. Therefore, this reduced corporate risk leads to higher ESG ratings which ultimately results in improved investor relations and corporate performance.

 

The Sustainability Advantage is your Competitive Advantage:

 

Click here to learn more about the benefits of such energy conservation projects.

Ecosave specialises in designing and implementing fixed-price guaranteed energy conservation projects. Ecosave is a single point of contact provider of end-to-end energy conservation solutions including: Assessment, Design, Procurement, Installation, Commission, Monitoring (Analytics), Management and Maintenance;  performance-based contracts including Guaranteed Energy Savings Projects and zero-debt cash-flow positive Ecosave Service Agreements.

Talk to an Ecosave Solutions Manager today about how we can partner with you to achieve your sustainability and corporate performance targets!

Book a FREE 30-Minute Phone Consultation Now

 

Source article originally published June 2018 ASX.com.au


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