Abstract
Energy efficiency is an important means for sustainable manufacturing. One action for manufacturing companies to improve energy efficiency is through investments. While these investments often are profitable, opportunities remain unexploited. This paper explores the structural context of the investment decision-making process by examining the associated activities, procedures, and the role of information. While the structural context may limit complex investments that do not fit predefined rules and controls, such as energy efficiency and other sustainability-related investments, it remains a scarcely studied aspect of investment decision-making for energy efficiency investments. Method-wise, the paper is based on a case study of a major investment at a pulp and paper company, motivated and justified based on productivity, strategic, energy, and sustainability rationales. The paper contributes with illustrating how configurations of internal investment activities and procedures may be crucial for sustainability-related investments to pass through the investment process. Moreover, the configuration of activities and procedures is also indicated as influential for the way in which an investment is executed. Hence, for energy efficiency and other sustainability-related investments to make business sense constitutes more than achieving desirable payback periods; the structural context should be considered.
Highlights
Improving resource efficiency, such as energy efficiency, is one important means for sustainable manufacturing [1], industrial sustainability [2], as well as competitiveness [3]
The empirical analysis indicates how all investments at Alpha are subject to the same formal process, which emphasizes the need for adequate activities and procedures to enable the integration of sustainability-related aspects into the investment process
The section ends by providing new insights into the relationship between energy efficiency and non-energy benefits and the ambiguity this implies for the investment process
Summary
Improving resource efficiency, such as energy efficiency, is one important means for sustainable manufacturing [1], industrial sustainability [2], as well as competitiveness [3]. E.g., the manufacturing industry, energy is a vital resource and in terms of end-use (both for energy and its adjacent greenhouse gas emissions), the industrial sector is the largest contributor; actions on the demand-side are crucial for mitigating climate change [4] Such actions include sustainable manufacturing practices such as making energy efficiency investments. This paper takes an internal firm perspective and aims to advance our understanding of the investment process for energy efficiency investments and provide implications for how to enable for more investments in resource efficiency and sustainability to be adopted and implemented in industrial companies, i.e., to provide new insights for investment decision-making. This endeavor entails both addressing the traditional business arguments for energy efficiency, i.e., to make business sense of these opportunities, as well as to delve further into the internal obstacles pertaining to the formal investment decision-making process and its activities and procedures
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