By Andrew King, Founder of SGT
Andrew King is the founder of SGT, a Buckinghamshire-based business helping businesses across the UK find commercial energy tariffs that meet their needs while keeping costs low. Andrew has extensive experience in client relations and business management. An issue he has seen throughout his time in the industry is a reluctance for leaders to discuss energy in the boardroom.
Over the last decade, the nation has shifted to more energy-conscious habits. From adding solar panels to homes to driving electric cars and using energy-saving light bulbs – we have all made conscious and unconscious habits to better our carbon footprints. However, with this shift in mentality, why are companies still not discussing energy in the boardroom?
Short-term Financial Focus
Often, companies work on a short-term financial term. This means that broader issues, such as energy, are deemed ‘not important’. Priorities for the next quarter or for the coming year take precedence. Improvements in energy efficiency require upfront capital investment, which requires much longer-term discussions that distract from the issue at hand.
Lack of Interest or Expertise
Board members often come from law, finance and general management backgrounds. While this puts them in a great position in their organisation, they may lack the necessary knowledge or interest to fully engage in energy discussions. Better education may be needed to prepare leaders for these types of conversations.
Understanding the Importance of Energy
Energy can be a complex area to understand. Predicting energy prices or understanding the potential impact of sustainability initiatives can be difficult, which may lead boards to avoid in-depth discussions and defer them to operational teams.
Energy is Operational
In terms of business management, energy is perceived as an operational issue rather than of strategic importance. This means instead of discussions in the boardroom, energy is handed to facilities or procurement departments. Over time this can cause a mismatch of priorities between operations and the board when selecting providers and efficiency investments.
The Perception of Energy
Energy is perceived as a simple commodity. It is seen as a cost to be minimised rather than an asset that can provide competitive or cost advantages. Taking part in discussions about energy procurement, efficiency or decarbonisation can set the organisation apart and build its reputation and resilience.
Low Priority
For businesses that are not in energy-intensive industries, there are fewer external pressures to put energy high up on the agenda. Unless investors or regulation insist, many companies will not prioritise energy. However, the adaption of new policies may push for these discussions to be deemed of higher importance.
Absence of Incentive
Boards are typically incentivised by short-term financial goals rather than longer-term sustainability, making energy discussions less urgent. Having energy as a key pillar of the company’s goals will save money later down the line whilst also improving the substantiality and public-facing profile of the business.
For energy to be discussed more effectively in boardrooms, there must be a mindset shift. Organisations need to see energy not only as a cost centre but as a strategic issue that affects risk management, competitiveness and corporate responsibility. Regulatory clarity, better integration of energy expertise at the leadership level, and a focus on sustainability can all drive more meaningful boardroom conversations around energy.
