Why Boards Should Consider Energy Data Analytics
In order to improve corporate governance, boards need to consider implementing energy data analytics.
As boards become more involved in corporate strategy, most are looking at emerging technological trends, as well as long-term economic, geopolitical and environmental risks, according to a PwC survey.
Energy data analytics software fits right into this strategic supervision, as they can tell a larger story about how the company is performing in areas such as operational efficiency, risk management, and sustainability.
Get More Analytical
While the idea of big data is not new, many companies still have a long way to go to effectively interpret data. To bridge this gap, part of boards’ examination of emerging technological trends should involve looking at whether their companies have the tools in place to become more data driven.
When discussing these issues with executives, boards can see whether the company is utilizing energy analytics for data as part of larger digital initiatives, such as adopting smart manufacturing practices. Companies that do so are likely to get ahead of the competition, because they can use energy data analytics to further improve areas such as equipment maintenance, and even real estate space optimization, because the data could indicate what areas of an office employees actually use.
Directors themselves do not necessarily need to review all this data, but as part of their oversight they should determine if energy data analytics are part of the plan to advance the company forward.
A Proxy for Efficiency
Not only is the use of data energy analytics a good sign that the company is on the forefront of emerging technological trends, but it can also be a proxy for how well efficiency and sustainability efforts are being run. By receiving analytics reports regularly, boards can identify issues such as a company using a disproportionate amount of energy when benchmarked against similar-sized competitors, or they might see a trend of increased energy expenses.
In these cases, the analytics might indicate that the company is wasting money on inefficient energy use, which impacts profits for shareholders, and more importantly, it could be a sign that the company is not paying close enough attention to other types of costs that make a larger impact on the bottom line.
Again, boards do not need to analyze detail on this data, but they should see whether management is putting energy data management to use to improve the company and whether executives themselves have a good understanding of how the company is actually addressing energy efficiency and management initiatives.
Boards need to provide good risk oversight in order to avoid problems such as regulatory fines or customer backlash. Part of risk oversight should involve ensuring that companies are using data analytics to stay compliant and satisfy stakeholders, as there is now more of an impetus on sustainability.
For example, shareholders might want companies to report on greenhouse gas emissions. Companies that already use energy analytics for data can more easily report this information and find ways to reduce energy usage.
“Integration of sustainability into key business initiatives, risk management and compliance are all consistent with corporate governance standards,” notes Sandra Taylor, CEO of Sustainable Business International LLC in an op-ed published by Nasdaq.
“Sustainability is a proxy for good governance,” she adds.
Similarly, paying to attention to energy data-focused analytics is a proxy for good governance, considering all the ways in which it factors into other areas of a business.
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