Navigating the Energy Transformation Journey Step Two: Gather Data and Measure

October 5, 2023

This week, we continue our series on navigating the five-step journey in Energy Transformation.? While this journey is an imperative for executives leading their organizations to increased growth and profitability, its complexity and urgency can often present challenges in progressing.

The first edition in our series focused on defining and navigating the energy transformation journey and outlined five steps organizations must follow to achieve their goals. We then profiled the first step, “Determine Goals and Objectives” which can be an intensive process requiring assembly of external data to establish internal metrics and success criteria.?Our continuing exploration of navigating the Energy Transformation journey brings us to Step Two, the critical foundation of gathering data and conducting measurements.

Read?our newsletter outlining obstacles on “The Energy Transformation Journey”

Step Two:? Gather Data and Measure

In Step 2, some unique - but surmountable - challenges arise in the process of gathering, assimilating and rationalizing a broad set of information spanning regulatory, investor, customer and internal data.? Once internal objectives and metrics are set, many organizations need help collecting data to support their strategies.?Energy data often doesn’t seem to exist or is difficult to access, which makes assembling information related to current energy-related contracts challenging.?

Determining GHG measurement methodology is critical to establishing energy transformation initiatives.?Many organizations are lacking resources with GHG accounting expertise – this often adds complexity and time to this step in the process.?Another limitation for teams that are newer to building energy transformation strategies may center on understanding the ultimate use of sustainability information.

Additional challenges encountered in Step Two arise from several sources.? While organizational energy transformation goals have been established in Step One, there may still be a need to clarify executive leadership objectives, why they want GHG measurement and how the information will be used.?

Once those objectives are better understood, it’s important to establish measurement components such as what framework to follow, how to determine boundaries, and how to measure the GHG footprint before engaging in gathering the data.? Further, understanding what data is needed, how much, in what form, and the level of detail needed for the situation will help facilitate organizing the data as it’s assembled. Teams will need to establish a clear GHG baseline for internal and external reporting as well as input data and a valid calculation methodology to product output.

The next set of challenges arise around gathering the data.? Both internal and external data will be critical to an accurate analysis, but gaining access to data – both internal and external - is often a major challenge in the process.?

Gathering external data starts with locating and analyzing existing supplier contracts. Internal data gathering involves pulling spend reports and forecasts from internal systems and determining existing hedge positions.? Collecting primary emissions data often involves tracking down invoices from external vendors providing services from fuel to HVAC recharges. Teams should budget ample time to pursue this information as much of this data must be manually pulled from vendors' systems.

Once the data is gathered, teams often run into challenges in resources and expertise.? In some cases, teams simply don’t know how to perform the GHG emissions calculations or don’t have the time needed.? Data accuracy can also be a complicating factor in the process. It’s important to consider locating the data to ensure stakeholders have access to it and observe results.? And finally, the team will need assurance that the process was done correctly, accurately, and repeatably.

Achieving Step Two successfully – Gather Data and Measure – is critical to continuing momentum on the Energy Transformation Journey. ?Given the challenges teams encounter in this step, many organizations engage consultants to lend expertise in streamlining the process of gathering data and executing measurements.

Looking ahead to Step 3, assessing the data gathered is critical to developing an incisive strategy that synthesizes energy data, risk tolerance, and decarbonization plans into a procurement strategy. We’ll tackle Step 3 in our next edition!

Successfully navigating the energy transformation journey is increasingly critical for organizations in order to meet regulatory requirements, exceed growth and profitability objectives, satisfy stakeholder expectations and achieve competitive advantage. ?Overcoming obstacles on this journey may feel challenging, but leveraging guidance to support strategic and resource constraints can both smooth and accelerate the process. Holistically approaching the transformation and leveraging synergies, spanning energy procurement and demand management with sustainability initiatives, can unlock growth while advancing strategic goals.

This is the third edition in a series of “Transformation Journey” newsletters dedicated to helping energy transformation executives identify obstacles and clear the path on their journey to energy transformation. In subsequent editions, we’ll continue to unpack each step of the journey in detail and provide insights to overcome obstacles you may encounter.

Let’s continue the conversation about your journey!?To schedule an initial discussion,?click here.?