Chris George, head of energy and environment at Whitbread, speaks to Energy Demand about over-legislation, Whitbread’s carbon version of Space Invaders, and why the UK needs a Dig For Victory programme for energy.
Whitbread has published a target to cut its carbon emissions by 25% by 2017, but it has not published its energy use target – can you explain why you’ve chosen to publicly measure one but not the other?
We chose to adopt carbon because a lot of the external reporting is now centred on carbon, and our carbon targets will go hand in hand with saving energy. We do have internal energy saving targets that we set all of our properties, and that’s 3% per year. So since 2009, when we set our baseline energy signatures in carbon, we’ve saved about 12% across our 2,000 properties in electricity and gas.
We’re one of the only companies to financially incentivise our managers every year, through our Whitbread in Numbers (WIN) card, which is like a KPI scorecard. Managers can earn a percentage of their salary in bonus by saving energy, and then every month we offer incentives for our team members either through fun online quizzes or interactive training.
So what prompted you to implement your energy targets?
The prompt for our targets probably stemmed from development of our carbon reduction programme Good Together which we established in 2009. Since that time we’ve demonstrated that as a major hospitality business we do have an aggressive expansion programme and we can still deliver energy, carbon and water savings.
I look at four factors that I call the four C’s: costs, compliance, consumer trends and company reputation. A possible fifth is competitor advantage but those four are the pillars.
Can you run us through some of the key measures Whitbread is taking to cut its energy demand?
We’ve always believed that accurate monitoring and measuring is vital to energy demand management. We won a competition with the Technology Strategy Board (TSB) to fund a project to look at the disconnect between design and construction and operation. So commonly new energy efficient buildings are built, and then you can never see the actual energy performance data to compare it with what you did in the energy modelling. This is a piece of valuable work that will give us an insight into the right solutions and technology to save energy.
We AMR everything from electricity to gas and water, so we’ve got real-time data. We’ve also got historic profiles so when we’re setting our targets for our weekly reports they’re all based on what the coffee shop, hotel or restaurant was using at the same time last year. And when we’re setting other KPI targets we’re looking at year-on-year performance, as well as degree-day weather differential and occupancy, which is important for us.
Last year we focused on engagement with our team members, using all the usual suite of engagement tools which big companies look at: management tools, online academy training programmes, energy walk-round guides, posters and stickers and so on.
We developed an interactive Space Invaders-style arcade game in-house called Carbon Invaders using a software platform –you had to battle the evil toxins of carbon and water and waste and energy. It was really successful. We had 4,500 hits in a week, which was a lot more than we would usually get for a training programme.
What is the most challenging aspect of cutting your energy use?
Last year was a really challenging year for everyone in the hospitality industry because we saw some extremely diverse weather. When I was young, summers were summers and winters were winters. March this year was 5 degrees colder than last year, so that put a massive energy demand on our business. But because of the energy savings measures we had in place, we reduced our exposure to use and cost. Last year I think we saved about 4% across our portfolio – the thing about Whitbread is that we are a big growing company and we opened 4,200 rooms last year as well as 10 restaurants and 180 coffee shops. So even though we’re growing the business we’re trying to mitigate energy use.
Are there any energy challenges specific to the hospitality industry?
In terms of our hotel operations, it is a a 24/7 business, and the onus of energy use is on the guest. We can help them to be green during their stay, but people have this perception that they’ve paid for the room and that room is theirs if they want to use energy. It’s about investing in energy saving technology that doesn’t affect the guest’s experience. But energy is the lifeblood of our business. The energy challenge facing us is probably no different to the energy challenges facing everyone.
How do you ensure that the standards of energy efficiency are the same across the whole portfolio?
It comes down to our Good Together programme because it underpins everything we do as a business. It’s our solution to embedding energy saving into our business. It promotes leadership in action and it shows our 40,000 team members how they can do small things to make a difference. To drive energy saving we have a number of key performance targets, both public and internal, we have governance around our commitments and we have an environmental policy that has ten clear commitments signed off by the board. It’s communicated in everyone’s development plan and job description and we do a lot of training on energy awareness from day one alongside health and safety and food safety.
How easy is it to justify the capital investment of energy efficiency measures your board and to shareholders?
It’s got easier over the years. We need to deliver significant energy savings over the next few years, and a lot of it is driven by the value at stake, or lost business opportunity. So it’s a question of doing nothing, or investing in technology and behaviour and good procurement, as well as generating our own energy. All of this mix puts us in a good position, because if we did nothing it would cost us millions of pounds as a business. If you map out a trajectory of the way that expansion and our consumption’s going to go, there is a big difference between that and the savings a project is going to deliver. That’s very clear. In terms of payback, we look at a mix of paybacks, either one year, three years or nine years. This year we’ll invest £4 million in energy saving technology in our core estate, with an average payback of just over £1 million. So it does improve shareholder value and boosts our company reputation.
What are the biggest challenges facing energy managers today, more generally?
If I talk to people in the industry, and from my own experience, it seems that the biggest challenges are keeping on top of legislation, keeping on top of new technology and managing your resource time.
A lot of new energy directives are coming in from the EU and government – some of which are great. If you look at the CRC scheme, that’s put energy and carbon on the boardroom agenda which it wouldn’t have been previously. But government could do a better job of informing and educating companies on what the changes mean to them.
Do you think enough is being done in the UK to incentivise businesses to invest in energy saving measures, and to encourage people in general to change their behaviour?
I know there’s quite a large treasure chest of energy saving schemes, such as the RHI and the feed-in tariff and so on, but what it boils down to is unless you’re an accountant, technician or engineer, it can be very confusing for businesses, and even for certified energy managers. Government processes need to be simpler.
More needs to be done in terms of educating and engaging business and encouraging people to become more energy aware. If you look at reports like the Carbon Trust, they say that 20% of energy demand in the UK could be saved by turning the lights off and shutting doors and identifying energy wastage. There needs to be a nationwide shift in behaviour – kind of like the Dig For Victory programme in the war. There was a huge change in psyche then, and more needs to be done now to get people to where they wouldn’t have gone on their own.