Toolkit & demonstration to guide SME investment in lucrative low carbon projects by Enviro-Stewards Inc.
Pitch
Starting with renewables is cost prohibitive. Practical and lucrative conservation measures generate savings to support such investment.
Description
Summary
Conservation is much more likely to be implemented and can generate savings needed to invest in renewables. SMEs need real life demonstrations and a practical tool to help gauge the magnitude of their potential gains from resource conservation. The goal of the toolkit is to develop an interactive resource for SMEs to use which will provide a clear pathway to reduce the environmental impact of their operations and increase profitability. The toolkit and demonstration case studies will highlight the benefit of a conservation first approach and entice SMEs to pursue projects within their organization that will directly reduce GHG emissions and expenditure on resources.
The toolkit will be tailored to multiple categories of SMEs that exist within Ontario and each category will use and interact with the toolkit differently. For example, an office-based SME would be prompted with different questions and be presented with different outcomes, suggestions, and resources than a small manufacturing operation. Broadly, the toolkit will focus on resource inputs (energy, water, material, and ingredients) by prompting the user with various questions. Based on these inputs, the toolkit will output specific recommendations for further investigation and approximate the potential savings and payback period from different investments.
Potential areas of consideration for an office or retail environment include: HVAC (controls, setpoint, living wall, blue roof), lighting (occupancy, lighting type), domestic water (toilets, faucets), rain water harvesting (offset non-potable domestic), supply chain (evaluate GHG impact and potential alternatives), and employee practices (bike to work challenge, carpool tracking or incentives, composting program). Manufacturing or industrial facilities would have additional areas for exploration, including: heating, ventilation, and refrigeration (heat recovery, controls, equipment efficiency) and waste/by-products (resource recovery, onsite treatment).
Desirability
How do you know that your solution is desirable to SMEs, and will reduce GHG emissions?
A major barrier to pursuing low-carbon initiatives is not knowing where to start. Barriers that impede SMEs from reducing GHG emissions include a lack of technical expertise to assess options, inability to afford the upfront costs and managers not having access to reliable information that is all in one place. To address these challenges, this toolkit will provide background information on different investment options with real life examples. It will then help guide decision making by quantifying approximate resource savings, providing payback periods and ranking options based on user priorities which can include existing budget restrictions or operational schedules. In addition, next steps will be provided to inspire users to take action on each opportunity. Due to the adaptability of the toolkit, end users can be of any industry or size. It could also be useful to companies whose facilities are not yet operational, as it can provide guidance on low-carbon opportunities to pursue while still in a planning phase.This service is desirable by users in a variety of industries because it allows them to take control of their own upgrades and choose what is the best fit based on their own operations, reduction targets and/or budget. Taking a conservation-first approach also helps mitigate financial risk associated with increasing resource costs, carbon tax, pollution surcharges, and tarnished public image from irresponsible environmental practices. The web-based toolkit can also be distributed through industry associations and will be free of charge.
Our company has been using this conservation- first approach with energy, water and food waste audits performed at facilities for 18 years with a strong track record of an average payback period of 0.9 years and satisfied clients, including but not limited to: Tim Horton's, Campbell Company of Canada, Maple Leaf Foods, and Southbrook winery (see References). Similarly, interest in conservation has been shown by the long history of incentive programs by utility companies. There has been impressive uptake of grant programs such as CME Smart Green (which was recently maxed out) and its succesor, the GreenON program, which also had a large number of applicants before it was discontinued.
Furthermore, taking a conservation approach is consistently found to have a lower marginal abatement cost for carbon emissions when compared to implementing newer technologies as found by McKinsey & Co (see References). Focusing on energy efficiency typically provides a better payback period than investing in alternative energy sources. However, it is not an either-or scenario. As seen in our project with Southbrook, starting with conservation can decrease upfront capital costs associated with renewables, thereby improving the payback period and attractiveness of the overall investment. Therefore, this toolkit will be a valuable first step for SMEs looking to lower their greenhouse gas emissions.
Feasibility
What actions do you propose?
The main action we propose is completion of case studies of demonstration projects and preparation and distribution of a toolkit incorporating such case studies and practical guidance. The intent is for the toolkit to be integrated into regular business planning and operations. This will require a shift of behavioural norms as it will ideally be an ongoing practice that is included in an individual or team’s job description. It is recommended that a team of individuals is responsible for using the toolkit and developing criteria for prioritizing investments, as a variety of perspectives (technical, financial, operational) is necessary to understand the full impact of any investment.
To support this widespread adoption, we propose that industry associations promote and normalize the use of the toolkit. This can include creating reporting policies to support its use or simply advertising the benefits and noteworthy case studies.
Who will take these actions?
Enviro-Stewards and contractors: Our team will be responsible for completing demonstration projects, developing case studies, and developing and testing the toolkit. We will also hire a sub-contractor to transfer the toolkit from an excel-based tool to a web-based tool. Enviro-Stewards will also provide guidance to initial users, respond to feedback and make any necessary upgrades based on requests.
Industry and sustainability associations: These groups will be responsible for promoting the toolkit, benefits and case studies to their members to encourage adoption. We have seen success with the uptake of a similar Food Loss and Waste toolkit we helped to develop for Provision Coalition (an association for sustainable food and beverage manufacturing). Their promotion of the toolkit helped to encourage uptake for case studies and projects, as well as test and improve the toolkit.
Businesses: Various business will use the toolkit, provide feedback, and pursue energy-efficiency investments based on recommendations.
Where will these actions be taken?
The Case studies will primarily be based on real life projects implemented at SMEs in Ontario. The development of the toolkit will take place in Ontario (Elmira) and the sub-contractor to develop the web-based tool will also be within the province. Industry associations and businesses will be targeted to pilot the toolkit within Ontario with plans to expand to the rest of Canada and beyond.
What are the proposal’s projected costs?
Cost: Our recommended budget is $165,000. However, the scope can be scaled back, if necessary, to a total budget as low as $80,000. The cost of the demonstration projects & case studies can be adjusted to match the available funds allocated (by changing the number completed). This could range from $15,000 to $100,000 depending on the nature and extent of demonstrations implemented & reported. Based on our prior experience developing a similar toolkit for food waste prevention, the cost of developing the toolkit itself is estimated to be about $65,000. Therefore, the combined cost could range from $80,000-$165,000. The cost can also be adjusted by changing the number and scope of case studies, additional features, or SME sectors addressed in the toolkit. The funds would be roughly allocated as follows:
- Research and development of toolkit: $50K
- Programming (subcontracted): $15K
- Demonstrations/case studies and revisions: $15K to $100k
Challenges: A common challenge with developing such toolkits is the scope. It will need to achieve a balance of being general and adaptable while also being specific enough to provide valuable quantifications of savings and payback periods to a variety of users. Furthermore, with more testing and feedback, requests for more refined features can cause scope creep which could create challenges in achieving the estimated budget. Another challenge could be the adoption by businesses. If the value is not properly communicated or the toolkit appears too complex on first glance, individuals may be averse to taking the time to incorporate it into their regular tasks.
Scalability
Once the solution is built and implemented describe a path forward for it to scale to other users/companies.
A major avenue for scaling will be through promotion & use of the toolkit by member organizations, such as:
Non-profit sustainability organizations: We have partnerships with organizations such as Provision Coalition and Partners in Project Green which we can leverage to promote the toolkit and its relevance to the sustainability mission of the organization and their members. We have recently developed a similar food loss and waste toolkit for food and beverage manufacturers in partnership with Provision Coalition which is currently being used as part of 50 food waste audits across Canada.
Industry associations: We have worked with groups like Alberta Food Processors Association (AFPA), Canadian Manufacturers and Exporters (CME), Food & Beverage Ontario (FBO), and Ontario Agri Business Association (OABA) in various capacities. These connections, as well as the credibility we gain from them, can be used to promote the toolkit and find businesses willing to test and use it. Industry associations that are Canada or North America-wide will be critical in helping expand the geographic reach of the toolkit.
Enviro-Stewards' network: The toolkit can be promoted to our past, current and future clients across Canada and North America. It can also be included in regular business development and marketing initiatives to increase awareness and to communicate benefits.
How will your solution lead to change on a larger scale over time (i.e. 3 to 5 years out)? How many businesses can potentially be affected by your solution?
As outlined in our Annual Public Benefit Statement, as of December 2017, Enviro-Stewards’ resource conservation projects have already saved clients (primarily SMEs):
- $61.5 million with an average payback period of 0.9 years
- 46.1 million m3 of natural gas (enough to heat 17,000 homes for a year),
- 64.3 million kwh of electricity (equivalent to annual output of 250 acres of solar panels),
- 8.4 million m3 of water (equivalent to 4,000 km of water tankers bumper to bumper),
- 94.3 thousand tonnes of GHG emissions (equivalent to 20,100 vehicles), and
- avoided 59 thousand tonnes of waste (equivalent to annual garbage from 76,150 people). *
Note: *A third party assessment found that 90% of Enviro-Stewards customers intend to implement all or most recommendations. The estimates above conservatively assume a 60% implementation rate and an implementation lag period of 1 year. However, in practice, most customers commence implementing measures immediately.
The proposed project is intended to codify Enviro-Stewards’ approach and make it available to a broader audience of SMEs. The toolkit will be free and easy to access which will allow it to achieve widespread use with no added cost. Its main purpose is to highlight opportunities within SMEs’ operations and guide their investment decisions to reach greenhouse gas emission targets. This will encourage SMEs to take action independently without assistance of professional services or reliance on external funding programs or ad-hoc initiatives. The ranking feature can help them to plan and budget for future investments in efficiency upgrades over the next 3-5 years and beyond. With average paybacks of under one year, the conservation measures recommended by the toolkit will allow companies to experience increased profitability within 3-5 years. There is no limit to the number of businesses that can potentially be impacted as the toolkit will be free and have open access for all SMEs.
What business and funding model have you considered for your solution to become sustainable?
The funding from the program grant will be used to develop and test the toolkit, including hiring a sub- contractor to develop the web-based platform. The money will also be used for marketing or promotional efforts to initiate uptake across Ontario. Funding for continued revisions and promotion will come from business that the toolkit will generate for Enviro-Stewards. This will be from companies who are looking for a more detailed follow-up conservation assessment after using the toolkit.
Impact
What impact will the proposed actions have on reducing greenhouse gas emissions?
The level of greenhouse gas emissions reductions will depend on the type and size of the facility, as well as the available opportunities for implementation. That being said, conservation and pollution/waste prevention are our speciality and our projects have implemented opportunities to reduce over 59,000 tonnes of GHGs to date. Recommendations resulting from plant audits typically identify practical opportunities to reduce 20-30% of total energy and water consumption compared to a business-as-usual scenario. Food & Beverage waste prevention also reduces a large amount of embedded & added GHG emissions as any by-product/waste that is presently diverted (or waste generated in an office or retail setting) has embedded energy which could have otherwise been conserved if the waste were not generated in the first place. The potential for greenhouse gas reduction per facility is significant based on our experience.
What are other key benefits?
The toolkit will not be limited to energy efficiency upgrades, as water and waste also have an impact on the carbon footprint of a facility. By including all areas of impact in the scope of the toolkit, the potential environmental benefits of chosen upgrades are increased.
With an average payback period under one year, businesses will increase their profitability within the short term. This benefit could be passed down to employees through increased salaries or benefits and/or be used to create more jobs within the company. Improved margins will also improve job security for existing employees, increase tax revenue, and strengthen the Ontario economy. These benefits can also improve employee retention and satisfaction. Furthermore, using the toolkit to facilitate capital expenditure planning can improve financial and strategic planning for the company.
About the Authors
Bruce Taylor, MRE, P.Eng: Bruce is the President and founder of Enviro-Stewards Inc. Bruce has 30 years of experience in water and energy conservation, pollution prevention, sustainable development, and treatment process design. He is also a recipient of the highest awards in the Pollution Prevention field in both Canada and the United States and was recently selected as the top environmental consultant in Canada by Clean50. He will be the senior reviewer and advisor for the implementation of the toolkit. He will also be responsible for seeking out and hiring the contractor to develop the web-based platform.
Spencer Kelly, P.Eng: Spencer is a professional project manager. He has a background in mechanical engineering and has been managing and executing energy conservation projects with Enviro-Stewards for four years. The most notable projects to date have been resource conservation assessments at Maple Leaf Foods and Maple Lodge Farms.
Madeline Collins, MScSM: Madeline has a background in civil engineering and a masters in sustainability management. She has been working with Enviro-Stewards for one year and helped to develop the greenhouse gas emissions feature of the food loss and waste toolkit with Provision Coalition. She has also been involved with a number of energy, water and waste reduction projects and will be working to develop a change management framework to help clients adapt to recommended changes in their business operations.
All team members reside in Canada.
Related Proposals (optional)
Related Proposals within Helping Small and Medium Businesses Go Low Carbon:
Small vertical wind tunnels: As mentioned above, lowering the energy consumption of a business will help to increase the financial viability of adopting renewable energy technologies through reduced scale and resulting upfront costs. The payback period of investing in technology such as small vertical wind tunnels, as well as the ability for the tunnels to meet the energy demand of a business, is improved through energy conservation measures which would result from using the toolkit before hand.
References
Conservation case studies:
Food Loss & Waste Toolkit Case Studies:
Energy conservation business case
Our blog on the benefits of resource conservation:
The benefits of going low-carbon written by the owner of VeriForm who Enviro-Stewards has worked with in the past: https://www.thestar.com/opinion/contributors/2018/06/04/us-trade-antics-no-match-for-low-carbon-manufacturers.html
By:
Enviro-Stewards Inc.
