Ory Zik, founder and chief executive officer of Energy Points, believes many CFOs shy away from even thinking about sustainability because they struggle to determine the most cost-effective solutions. A Deloitte survey of 250 CFOs of companies with more than $1 billion in revenue in 2012 found that superior sustainability information is still somewhat elusive. Only 12 percent of CFOs believed they had “excellent” sustainability information, while 37 percent rated their information “good” and another 37 percent called it only “adequate.”
Sustainability reports are emerging as a critical driver of shareholder value. According to a January report from the Governance & Accountability Institute, 53 percent of the S&P 500 issued sustainability reports in 2011, a huge increase from 2010’s 19 percent. But Zik believes most of these reports are all but unintelligible.
The universal sustainability metric
The problem is that businesses that look at greenhouse gas emissions, kilowatt hours for electricity, BTUs for gas and gallons for water — and then keep them separate — are bound to get confused. What Energy Points does is to use a gallon of gasoline as a baseline. Its algorithms convert all other types of energy — electricity, water, oil, natural gas — into a metric relative to that gallon of gasoline. In that way, a CFO can derive one number to determine his organization’s energy use no matter what kind of energy is critical for the business, and track that cost, using it to drive strategic decisions.
With Energy Points’ application, what CFOs see is an interpretation generated by that algorithm that is easy for them to understand. “It’s like the iPhone,” Zik says. “The front is intuitive; the complexity is inside.”
