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The Low Carbon Economy Ltd

14 Dec 2010 11:12:11

Businesses 'underestimating energy efficiency investment returns'

Businesses 'underestimating energy efficiency investment returns'
Finance directors are dramatically underestimating the return on investment (ROI) from energy efficiency projects, according to Carbon Trust Advisory research.

The average ROI from such a project is 48 percent, which is four times the minimum most finance directors require, according to the organisation's The Business of Energy Efficiency report.

However, finance directors believe the average ROI from energy efficiency initiatives to be just 20 percent – less than half the actual figure.

Hugh Jones, managing director of Carbon Trust Advisory, commented: "The business case for energy efficiency is clear and compelling. Few other investments get anywhere near that rate of return."

Key changes which were said to be needed to encourage businesses to cut their energy usage include improvements in presenting the investment case for such projects, changing company culture, and realigning energy efficiency incentives.

Leading big businesses are estimated to spend at least £1.6 billion per year on wasted energy.

The research comes after a survey by PwC and the Carbon Disclosure Project, released earlier this month, found 53 percent of businesses now believe there is a net benefit to carbon reporting, despite the cost.  ADNFCR-1235-ID-800289676-ADNFCR

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