Companies that put effort into improving their energy performance can increase profitability by up to five per cent, according to a new ClimateWorks report.
The report, Energy Management And Company Competitiveness, assesses the risks and opportunities associated with energy costs for 50 large listed companies from a variety of industrial sectors, finding that energy is becoming a significant variable that can impact on profitability.
“The report found that for over 70 per cent of these companies, energy costs are greater than 10 per cent of the companies’ earnings before interest, taxes, depreciation and amortisation (EBITDA),” ClimateWorks Australia’s head of research Amandine Denis said. “Therefore even a small improvement in energy management can result in a meaningful improvement in earnings.”
Companies could reduce the impact of increases in energy costs by about 50 per cent on average by improving their energy performance, Ms Denis said.
The report provides a five-step assessment methodology for companies to help understand their energy costs, exposure to future energy price rises, how much more energy can be saved and the impact of those savings on financial performance.
See the full report.