Business in Vancouver December 22–28, 200924 SuStainabilitySUSTAINABILITY

NiNa WiNhamInefficiency fuels green business opportunities

If you’ve got some time off from the daily grind over

the next few weeks, here’s something to ponder: sitting as we are at a moment in time when the incredible boom of the industrial revolution is starting to bang up against the constraints of a single finite planet, how does your company strategically pos-ition itself for the economic shifts and adjustments this will bring?

To bring the question down to size, consider just one input: energy. If it hasn’t clicked for you yet that your company can realize signifi-cant profit from energy ef-ficiency, meet one of B.C.’s green-economy entrepre-neurs – Bryan Slusar-chuk. His new company, Greenscape Capital, makes its profits by helping other companies profit from ener-gy efficiency – a niche that’s opening wider as compan-ies realize that energy in the future is unlikely to be as in-expensive, plentiful or easy to access as we’ve been ac-customed to.

“Our key business is get-ting companies to retrofit their operations,” said Slu-sarchuk. “The payback on this is just immense in terms of bottom-line savings from reduced energy cost.”

Immense indeed. A 2009 McKinsey & Company study, Unlocking Energy Ef-ficiency in the US Economy, identifies US$1.2 trillion in potential energy savings that could be realized with an investment of $520 billion through 2020.

Creating “new” power by reducing current ineffi-ciency also results in big

cuts in greenhouse gases (in jurisdictions where fos-sil fuels are used to gener-ate electricity) and improves energy security.

Closer to home, the 2007 Conservation Potential Re-view study produced for BC Hydro identified opportun-ities for efficiencies where more than $10,000 GWh/year of electricity could be saved annually through con-servation – enough to power one million homes.

The utility has developed multiple demand-side man-agement programs and fi-nancial incentives in an ef-fort to access this mother-lode of inefficiently used energy. (You can find pro-grams for your company at BC Hydro’s website, under the Power Smart tab.)

If there’s money to be saved through efficiency, the question is, why have com-panies been so slow to em-brace it? The McKinsey re-port identifies multiple bar-riers. Potential energy sav-ings can be hard to measure and verify.

Opportunities for effi-ciency are fragmented across billions of electrical devices in millions of locations, so “efficiency is the highest pri-ority for virtually no one.” Finally, there is upfront cost – efficiency upgrades pay for themselves over time, but they still require an infusion of cash at the outset.

That’s why Greenscape’s model goes beyond trad-itional energy consulting. The company provides full-service energy retrofits – in-cluding financing.

“We’re able to tell them, ‘Don’t worry about writing

the upfront cheque,’” said Slusarchuk. “We finance the retrofit so that most of our revenue model is based on sharing in the energy sav-ings over time.”

Greenscape reinvests profits from its energy retro-fitting business into a port-folio of other green com-panies including, at present, an eco-clothing line and a wholesaler of organic food products.

“The retrofit business is so misunderstood,” said Slu-sarchuk.

“There’s been a lack of understanding in the busi-ness community of just how much increased profitabil-ity can be realized through simple energy savings. And this is not a sector-specific opportunity – every busi-ness in the world that uses energy is a potential retrofit client.” Greenscape’s list of new clients – $30 million of new business in B.C. over the past month – includes park-ing facilities, a tourist lodge and an auto dealership.

While it never did make sense to operate inefficiently, the cost of doing so in some industries has been low. With carbon taxes, peak oil and global energy insecurity placing new pressures and potential risks on compan-ies, those costs could rise. All of which makes it a great time to think about getting lean. It just happens that this also means “going green.”

“The context for this dis-cussion has traditionally been that business owners and corporations should do things more efficiently in terms of energy, waste, pack-aging and so on, because it’s the ‘right’ thing to do,” he said.

“But most corporations don’t act on that. I think the context has to be, ‘What is the return on investment? Can we decrease your ener-gy consumption, decrease packaging costs, decrease your transportation costs and result in enhanced prof-itability – and the byprod-uct is good for the environ-ment?’”

Creating markets for waste is certainly one trad-itional approach to environ-mental cleanup, and there are other examples of or-ganizations that profit from others’ profligacy.

United We Can, a bot-tle depot in the Downtown Eastside, makes money from the 20 million returnable containers per year it col-lects predominantly from trash headed to landfill, for example. Often these require policy frameworks, however – in the case of United We Can, it’s the bottle-deposit system.

As we start to seriously press against the limits of a finite ecosphere, it’s inter-esting to consider whether the classic economic chal-lenge of externalities – nega-tive environmental and so-cial byproducts of business activities that fall outside individual companies’ own cost structures – may start to fade. As real costs begin to reflect our actual ecological position of interdependence and interconnectedness, real business opportunities will emerge. For those econo-mists out there the ques-tion is this: Is there any such thing as an “externality” in a completely closed-loop sys-tem?

Slusarchuk states it more simply.

“Cheap resources are be-coming more scarce. Busi-nesses that don’t adapt now are going to be faced with massive losses in the future, and, collectively, it’s going to spell a lot of trouble for the North American economy.

“Again, putting the dis-cussion into the context of feel good versus bottom line: the companies that don’t realize that energy retrofitting, becoming lean-er and producing less waste means an improved bottom-line performance are going to be devastated down the road.” •

Nina Winham (nina@new-climate.ca) is principal of New Climate Strategies, helping clients build value through sustainability and communications strategy. She writes regularly on sus-tainability topics. www.new-climate.ca

“There’s been a lack of

understanding in the

business community of

just how much increased

profitability can be

realized through simple

energy savings”– Bryan Slusarchuk,

CEO, Greenscape Capital

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theGREEN edition

SponSor’S MeSSage

Will GahertyM.S., P.Eng, Principal + President

Pottinger Gaherty

Have a Green Christmas

In the Lower Mainland, a green

Christmas is almost inevitable. But

a truly green one, in the sense of

being sustainable, may not. For me,

more than any other time of year,

this holiday season creates an acute

awareness of the interconnection

between all three elements of the

sustainability triangle- economy,

society, and environment-the

heightened pressure to make all efforts

to be with family and friends, purchase

gifts, consume food and drink, then

the inevitable effects that all this has

on the environment. I really enjoy the

spirit of the holidays and try to consider

how I spend my money and what I

consume, just so, every now and then,

I’ll have a white Christmas.

From all of us here at PGL, to you and

yours, have a happy and safe holiday.