As concerns over climate change continue to grow, the need for energy efficiency and renewable energy in buildings has become increasingly important. Banks have a critical role to play in financing various projects, but they face significant challenges, which include shifts in operations, digitalisation, data availability, and the complexity of building energy performance, among others.
These are the main energy challenges that you will face if you want to reduce consumption in your bank in a real way and become a sustainable entity:
1. Energy dependence related to the Digitalisation of the sector
As banks have increasingly adopted digital technologies, such as mobile banking apps, online banking, and cloud computing, they are now more reliant on energy to power these technologies.
Some of the main challenges related to the digitalisation of the sector include:
- Environmental impact
Digital technologies require significant energy resources to power data centres, servers, and other infrastructure, which contribute to greenhouse gas emissions and climate change. Banks must consider the environmental impact of their operations and take steps to reduce their energy consumption and carbon footprint. - Cost of Energy
As banks increasingly rely on energy to power their digital operations, the cost of energy is becoming a significant operational expense. Banks must manage their energy consumption and costs to remain competitive in the financial services industry. To better do so, implementing an Energy Management System is key to monitor energy consumption and implement savings measures. - Energy supply chain management
Digital technologies require significant energy resources, and banks must ensure that their energy supply chain is reliable and sustainable. In other words, banks must work with their energy suppliers to ensure that their energy consumption aligns with their sustainability goals and to reduce their environmental impact. - Energy security
Digital technologies are vulnerable to cyber threats, which can disrupt energy supply chains and cause operational and financial losses. Banks must ensure that their energy supply chain is secure and protected from cyber threats to maintain the reliability of their operations.
2. Monthly Energy purchase planning with Volatile Prices
The volatility of energy prices, which have a tendency to increase, is impossible to control or predict accurately without having the right tools.
Those responsible for energy management must make their monthly assessment and planning of the energy purchases they will need for the following month, and this must then be accepted by managers so that the final price can be closed with the utility company.
Here are two key ideas that those responsible for energy in the banking and financial sector must adopt:
- Achieve fast and timely managerial approval. To achieve this, it is necessary to provide specific numerical data in a simple and visual way.
- Get a competitive price from utility companies to achieve the lowest possible cost. Here the key is to make a correct analysis of the data that the market gives us and make the purchase decision at the right time – prices can increase up to three times if you don’t act fast.
3. Identification of the Savings potential of each building
The identification of the energy-saving potential of each of the buildings owned by a bank is often a challenge. Banking entities are multi-location, and whether those locations are owned or rented, there is a lot to manage and each building may have its own particularities.
These singularities by type of building, geographical area and activity will affect energy consumption, and for the energy manager, the challenge is knowing how to identify them in order to discover the saving potential of each building.
In this sense, one of the primary challenges that banks face when it comes down to identifying the savings potential of each building is data availability. Banks need access to accurate and reliable data on building energy consumption and performance to assess the savings potential of each building. However, this data is often limited, fragmented, or inaccessible, making it challenging for banks to conduct accurate assessments.
Secondly, we can think of the complexity of building energy performance. Building energy performance depends on various factors, including building design, equipment efficiency, occupancy patterns, and weather conditions. Banks must consider these factors and conduct detailed assessments to accurately determine the savings potential of each building.
Banks are facing challenges with stakeholder engagement. Building owners and managers may not be aware of the potential savings from energy efficiency and renewable energy projects, or they may be hesitant to invest in these projects due to cost concerns. That’s why banks must engage with customers to educate them on the benefits of these projects and to help them overcome any barriers to investment.
4. Implementation of preventive maintenance across facilities
For facility management, proper maintenance of the facilities is vital for saving costs. Banks that have a good maintenance plan for their buildings and facilities ensure energy savings and improvements in energy efficiency.
The challenge for the banking sector is to implement methodologies that better accompany energy management such as predictive maintenance, which is based on the measurement and monitoring of the condition of the facilities. If they succeed, they will achieve high energy cost savings.
In addition, proper maintenance of the facilities and offices will ensure the comfort of employees and customers.
Finally, the digitalisation of the processes that maintenance requires is part of the challenge.
5. Regulation in Energy Consumption and Sustainability
Legal requirements and regulation of energy consumption to promote carbon reduction: both national and international laws (European rules and directives such as the EPBD) demand a reduction in CO2 and appropriate management of our energy resources. These rules are mandatory for all sectors, so like any other sector, the banking sector must comply with them.
6. Analysis of a large amount of Energy Data
The need to analyse a huge volume of energy data (Big Energy Data) from thousands of locations. Although the banking industry has experience working with Big Data on a financial level, dealing with Big Data from energy data is not your day to day job. If the banks manage to apply advanced analysis technologies for large volumes of data, they will reduce their operational costs while guaranteeing the security and reliability of the data.
7. Sustainability ranking as a reference for Investors
The emergence of rankings and sustainability indexes as a key reference for investors. One example would be the Dow Jones Sustainability Index (DJSI): an index that rates companies worldwide with respect to each other, based on social, environmental and economic criteria.
This index selects the 320 companies with the greatest social responsibility from among the 2,500 largest companies in the world.
You will have understood, banks play a critical role in financing energy efficiency and renewable energy projects in buildings, but they face significant challenges as we have seen in this article. However, by investing in data collection and analysis, adopting new trends, engaging with customers, and collaborating with industry stakeholders, banks can overcome these challenges and remain relevant to new customers. By doing so, they can provide financing for energy efficiency and renewable energy projects, reduce greenhouse gas emissions, and help to mitigate the impacts of climate change.
