The Business Case for Carbon Efficiency

The Business Case for Carbon Efficiency

By reducing your use of fossil fuels either directly through reducing consumption of oil, petroleum, gas and coal, or indirectly by reducing consumption of electricity generated from the burning of fossil fuels we reduce greenhouse gas emissions. Those who have discovered how much they can reduce both their carbon emissions and their costs are often passionate about how much business sense it makes. One GM of a major hotel asserted noisily from the audience, in the panel session on carbon at the WTM Africa in Cape Town, that any GM not investing in carbon efficiency was ‘insane’.

Investment in marketing campaigns can only pay off in the short term; gains in carbon efficiency reduce costs, and improve the bottom line, for many years – contributing improved profitability in the short, medium and long-term. In an industry obsessed with immediate returns we still hear from many that the pay back periods are too long and the investment cannot be made.

Stephen Farrant was until recently the Director of the International Tourism Partnership a non-competitive platform for hotel industry leaders to share ideas, build relationships and work collaboratively to make this one of the world’s most responsible industries, its membership includes many of the world’s leading hotel groups. He argues that we need to re-think energy, water and waste, creating a circular economy and quotes Paul Polman, boss of Unilever who has stated bluntly that, “If we don’t tackle climate change, we won’t achieve economic growth.” While Stephen was Director at ITP they brought 23 companies together to standardise how the hotel industry measures and communicates its carbon emissions.

With COP21 opening in Paris on 30th November, the United Nations Climate Change Conference focused on an Agenda of Solutions we wanted to contribute to encouraging change in the travel and tourism sector by identifying examples where there has been a strong business case. Given the scale of the crisis which we face as a consequence of our impact on our environment and climate through the burning of fossil fuels profit ought not to be the only motivation for change, but in the absence of adequate regulation it is important.

Accommodation, attractions and transport will be covered by the negotiations in Paris but currently aviation and marine is largely excluded, as UN member states are not held accountable for emissions outside of their territorial boundaries.

Increasing numbers of properties are reporting on energy, greenhouse gas emissions, water consumption and waste and trialing new technology.

It was out intention to publish case studies to show the payback period for a range of initiatives to improve carbon efficiency, we have worked hard at asking people to share examples with us.

We have found very few examples, we know of none which are not published here. The original intention was to publish a report but that is not possible with so few examples. This has morphed into a work in progress – if you know of examples and can persuade the business to share the figures please contact Harold Goodwin using the contact page.

So what is the problem?

There are sites maintained by equipment manufacturers and many hotel groups have case studies up on on their sites, but these rarely, if ever, provide data form which payback periods can be determined.

Voltage Optimisation System   Dayton Controls   Philips

The Carbon Trust have one case study which mention payback:  Tunbridge Wells Borough Council  payback on solar  PV installation: “The payback period in all cases was less than ten years (determined using lifecycle analysis), with average annual cost savings varying between £4,000 and £27,000 and can deliver dependable long-term returns without having an impact of any future energy projects.” The British Hospitality Association partners with utilitywise    and e.on  who have an on-line toolkit designed to enable a business to see what cost savings could follow. Siemens have generic data   and the energy-efficient University of Genoa.

But what is lacking is any independent verification of the claims made for particular technology and transparency about the preformanc less optimum conditions and as the technology ages.

I asked a respected colleague why the case studies are not in the public domain, they wished to remain anonymous but had this to say.

“There are admittedly many consultants, government agencies etc who write up their own case studies using the metrics that show them in the best light (I am aware that just stating this could seem a bit of an own goal although of course I don’t think we are in that category).  The data that you report in terms of savings can vary depending upon whether one chooses to report per meter squared of serviced space or – for example – per guest night. 

Too much good practice focuses on what went well and too little tells the real story of implementing change.  For example, very few of the case studies that are published talk about how businesses tried to use non-dimmable LEDs on dimmer circuits only to discover that they had very short lamp life (you need to buy dimmables with a decent ballast to get performance in these systems), no one tells you how they invested £5k in a gizmo that clipped on to their gas pipe and was supposed to reduce gas consumption but didn’t, very few people talk about the fact that staff moaned about the new cooking equipment for a month and the chef left and had to be replaced because he didn’t like the induction system.”

I asked why small businesses don’t engage:

The issues here are multiple: most are not on competitive energy tariffs (partly because energy billing in this country is complex).  The biggest savings achievable are often through better tariff negotiations  (easier to achieve now with reverse auctions and so on).  Savings from efficiency are often not big enough to justify the effort (a small pub with rooms in the UK with an energy spend of circa £1200 per annum can probably save from a raft of low hanging fruit measures but most don’t have the time or resource to train staff or the expertise to invest in new kit or the time or trust to allow you to do it for them.  Many have also had their fingers burnt with old and defunct kit (some of the old energy efficient lamps) and so are cautious about investing again.  We have met precious few SMEs that has got anything like the payback promised out of a solar system (PV or thermal) – most put these in because they are committed to off-grid living/the green thing and not because they pay back.  Lots have invested in designer lamps (40 – 60 watt) and won’t move away from this because of image.

These are the examples I have been sent for publication which include some information about payback:

  • TUI UK & Ireland carbon savings across the retail & head office estate invested £5.4m currently saving £1.1m per year – savings likely to increase as cost of electricity increases case study
  • CDP Climate Change Investor Responses 2013 includes Host, Marriott & Starwood link
  • Hotel Verde was the first hotel in Africa to achieve the Platinum LEED certification level, as assigned by the United States Green Building Council. Hotel Verde calculates the additional costs for environmental performance to take 128 months to pay back from cost savings. case study
  • Forss House Hotel   saved 41,000 kg of CO2 per annum payback through cost savings under 5 years case study
  • Bryn Elltyd ECO Guesthouse All energy inputs from renewable sources – generated on site/ bought in via Good Energy, making the site carbon neutral with regards to energy, payback 10 years. casestudy

 International Tourism Partnership

ITP (the International Tourism Partnership) and Greenview  launched the Hotel Footprinting Tool in October 2015 which allows anyone easy access to the carbon and energy footprint of hotels worldwide.
Using data from the annual Cornell Hotel Sustainability Benchmarking Study, Hotel Footprinting is a free online tool which enables users to search the range of carbon footprints for hotels worldwide. It’s now far easier for hotels to compare their own carbon footprint to industry averages in their locality.
Businesses seeking to map the footprint of their own hotel stays and meetings can now access more accurate figures for hotels in the area and market segment, rather than using broad industry averages or having to contact individual hotels for information. The footprint report function enables businesses and event organisers to create and download reports for reporting of their scope 3 business travel emissions, or to offset those emissions.
Hotel Footprinting data is compliant with the Hotel Carbon Measurement Initiative (HCMI) methodology, developed by ITP, the World Travel & Tourism Council (WTTC) and a working group of 23 global hotel companies which created a universally recognised methodology for measuring and recording carbon outputs in hotels. Information on the water footprint of hotels will be available from 2017, following the launch of ITP’s Hotel Water Measurement Initiative in September 2016.

The Hotel Footprints Tool can be accessed at www.hotelfootprints.org

Green Business Carbon Calculator

Other examples

The Wyndham Hotels Group has published Champions of Green (2015). This contains some information on the return on investment

  • LED lighting installed at Wyndham Philadelphia – RoI less than 12 months   download a copy of the book here

Wyndham Green have published Global Best Practices (2009 & 2010)many examples of energy and emissions savings but not ROI data. Their policy on energy and emissions

Green Tourism, an established sustainable certification programme with over 2,000 members in the UK, Ireland and Canada. They now issues Green Tourism Carbon Calculator Certificates and reports on carbon emissions for some of the properties they grade.

  • Marriott Hanbury Manor Hotel & Country Club certificate and communication sheet
  • Comrie Croft
  • The Edwardian Group London – clearly shows variance in CO2 per bed night between 2009 & 2013 and the variance between hotels in the same group in each year.
  • Glen Affric Youth Hostel
  • Radisson Blu Edwardian Hampshire – Green Tourism Carbon Certificate
  • Holiday Inn Stevenage

Whitbread are using solar photovoltaics and the Premier Inn Glastonbury has trialed Fuel Cell Technology and provides estimates of cost savings

At Burgess Hill they have a new build Green Hotel and Low Carbon Restaurant with carbon reduction of 70% and water reduction of 60%

The examples published here are merely indicative of the kind of reductions in costs and emissions which can be achieved with changes in equipment and behaviour.

I shall continue to maintain this page and publish any case studies which are sent to me or which I happen across.

If you know of examples and can persuade the business to share the figures please contact Harold Goodwin using the contact page.