Best Practices

Companies often find it tempting to begin supplier engagement initiatives by asking suppliers to report on energy usage. The process usually kicks off with a survey, as this is how companies likely would start their own internal assessments. But a more promising approach is to lead suppliers toward resources that will help them manage energy for their own purposes, then orient discussions toward experiences and projects (as opposed to raw data).

This counterintuitive approach has two key benefits. First, it is a more direct path to finding investment opportunities, since understanding a company’s approach to energy management is a better indicator of potential than raw energy data. Second, the strategy minimizes the chance of alienating factories with potentially sensitive requests for data. The new approach frames the conversation as one about collaboration instead of compliance. In doing so, the new strategy sets up the arrangement for greater openness and trust.

Even within the same industry and province, suppliers’ experiences with energy efficiency will vary greatly. With this in mind, companies must understand suppliers’ existing accomplishments, and identify what they view as the more pressing needs in the area of energy conservation. Some suppliers likely will not be ready or willing to make serious commitments to energy efficiency at all; others will jump in excitedly and offer inspiring examples to their peers.

It is a good investment to get to know each supplier, asking questions about background, experiences, needs, and aims, before being too prescriptive about what each supplier might need. Companies also should ensure that they dedicate sufficient internal staff resources to forming a complete picture of each factory’s energy situation.

In order for factories to go beyond paper assessments and take actions that will generate energy efficiency results, management needs to be ready, willing, and attentive to invest time and resources in the process. It is therefore wise to evaluate which suppliers are more committed to energy efficiency, and start with them. In evaluating suppliers, companies should investigate the willingness of a factory to take an energy audit seriously; this requires them to provide the auditor with two years of utility bills, floor plans, and key personnel for interviews. Companies can also identify personnel with the mandate to share information such as energy bills and schematics.

Hope is not lost for factories that are not ready immediately to invest in energy efficiency. Indeed, some of the most important work companies can ultimately do is with this group. But companies must start their discussions with factories at whatever level will be most productive—such as raising awareness with key decision-makers, or the commitments that must be made in order to start achieving energy efficiency overall.