Energy efficiency complexities: A technical and managerial investigation

Abstract

Increased concern about sustainability issues has been voiced in the accounting literature. Although environmental performance is only one dimension of sustainability, it is nevertheless a key factor, especially in sectors such as the process industry, which consume substantial volumes of materials and energy. Energy itself is important because its production is a major cause of carbon emissions. Hence efforts to reduce its use are important, and here energy efficiency measurement and management play a key role.Although the conceptual challenges posed by energy efficiency measurement are well known in the technical literature, there has been little discussion of energy efficiency management. This paper examines the complexities involved in the measurement and management of energy efficiency. In particular, it examines how these complexities impede effective use of management control systems to impact the ability and motivation of employees to work toward the goals of sustainable development. The study is a cross-disciplinary one, and combines technical energy efficiency research and environmental management accounting research in performance management. The study provides practical knowledge of what happens in organizations pursuing sustainable development, in this case environmental performance. The paper demonstrates a performance indicator that does not allow proper energy efficiency performance management because it is still technically underdeveloped. Setting targets for the indicator is especially problematic.