Easy cost savings ignored by providers
Top tier accountancy firm fears aged care – and the environment – will pay dearly if efficient use of energy is ignored.
A sustainability adviser with top tier business advisory firm, KPMG, is concerned that the aged care sector may be missing opportunities to save on energy costs due to structural inefficiencies and poor monitoring and benchmarking of energy use.
Mark Spicer is heading up a major survey of the aged care sector looking at the impact of climate change and increasing energy costs. The survey, which began back in May, aims to collect essential data on how aged care providers monitor and manage energy use. The aggregated information will be used to establish benchmarks and highlight examples of best practice to enable all providers to better meet the challenges of increasing energy costs and other impacts of climate change.
But Mr Spicer is concerned that a sluggish response to the survey so far may reflect a worrying underlying trend among aged care providers.
“The survey is designed to take only 30 minutes but it does rely on participants actually having access to data on their energy use,” says Spicer.
Aside from the usual issues associated with encouraging survey participation, Spicer says the response to this one suggests poor levels of monitoring and awareness among providers of their energy use and costs.
“The ones who have responded so far are measuring and monitoring the energy intensity of their operations and the costs but we suspect that there’s been a slow response overall because there is a lack of measurement in the industry. Many providers simply don’t seem to have the data to give.”
Mr Spicer said while meeting the challenges of climate change requires a range of measures and approaches, prudent energy use and management will be central to the success of every organisation.
“Companies in the aged care industry and other industries, that have measured their energy use and been able to benchmark costs across a portfolio, have been able to achieve important savings. It has a real impact on the bottom line”
“The property industry has been heading in this direction and already they’re seeing rental premiums being paid based on the energy efficiency of their buildings.”
Forward planning
Mr Spicer said that the Australian government had already introduced measures such as building energy efficiency standards and a mandatory Renewable Energy Target (RET) and that a carbon tax or an Emissions Trading Scheme (ETS) remains likely to be introduced in the medium term.
“One of the outcomes of these measures will be the creation of a cost on carbon emissions and an increase in the cost of energy across the Australian economy.”
“But how much of the message is sinking in? That’s what we want to know. Are providers measuring their energy use – in terms of electricity per square metre or per bed? If they do, they can benchmark their use and use that information to drive some savings,” Mr Spicer said.
Spicer says he is concerned that the broader business case for energy efficiency may not be well understood across the sector.
“We would like to understand how the risks of climate change are being considered and addressed within aged care organisations. Is it discussed at board level? Is any priority given to it in capital expenditure? Are the business cases being written correctly? I have a strong suspicion that robust cases for energy efficiency are not being written and the financial benefit over the life of the asset is not going to be realised.”
Mr Spicer said there was an urgent need for aged care providers to investigate and understand their energy use across all their assets.
“Increasingly providers will be asked by residents, their families and the community to explain energy costs and demonstrate sustainable practices. They will be demanding a green star energy rating. But most importantly for providers, energy efficient operations mean big cost savings and a real impact on the bottom line”
“If providers are measuring or can get a measure and can provide it to KPMG, we can collate the information and provide an industry benchmark that will assist the whole aged care sector. But we can’t do it without that information,” he said.
For further information about the KPMG survey and to complete the survey online, please click here.
