Could boosting energy productivity improve your investment performance?

This guide will encourage more investors to enter constructive conversations with companies around energy-related issues

Our analysis covered 70 companies, including many well known and leading businesses, across six sectors: airlines, automobiles, chemicals, construction materials, paper and steel

Energy productivity is a material issue for companies and investors

With many industrial companies spending a huge part of their operating expenditure on energy (>15%), improving energy productivity has the potential to greatly improve a business' value as an investment

Significantly, improving energy productivity can effectively contribute to reducing greenhouse gas emissions and climate change risk

The value of your investment may be unrealised or eroded if energy productivity is not optimised

Over 70% of companies analysed may have significant room for improvement around energy use

Even in homogenous sectors, leaders are achieving energy productivity levels 2 to 5 times higher than poorer performers

Improving energy efficiency performance can deliver significant profit increases

This guide reveals a third of companies analysed could increase profits by over 5% per year if they matched the performance of leaders in their sector

Discounting capital costs from savings in energy costs could lead to 2-10% growth in annual profits for each year of implementation

Much of the energy savings achieved by leaders came through energy efficiency opportunities such as equipment upgrades, heat recovery, leak or waste reductions, and optimisation of controls

Much improvement is needed on data availability and data quality

Assessing energy productivity currently presents a challenge for investors (and an unrealised opportunity for portfolio companies) as data was uncertain in 19% of companies analysed

Furthermore, of 181 companies that reported in the six sectors, 73 had incomplete or insufficient data for benchmarking