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More Major US Manufacturers Have Committed to Reducing Energy Consumption

A new study by the Alliance for Industrial Efficiency shows that 43 percent of the largest manufacturers in the U.S., including many in the apparel and textile industry, have established robust targets to reduce their energy usage.

The report, “Committed to Savings: Major U.S. Manufacturers Set Public Goals for Energy Efficiency,” found that 79 percent have also set ambitious public goals to reduce their greenhouse gas emissions, with many companies pursuing both strategies. The number of U.S. manufacturers that have established public energy savings targets (43 percent), however, is substantially higher than the percentage of companies that have set public renewable energy targets (25 percent).

Apparel companies studied include Nike Inc., PVH Corp., Ralph Lauren, Hanesbrands and VF Corp., while companies in the textile supply chain examined were Dow Chemical, Dupont, Eastman Chemical Company and Huntsman Corp. Hanesbrands’ energy efficiency target, for one, is to reduce energy consumption by 40 percent by 2020 from a 2007 baseline. Nike plans to reduce absolute GHG emissions by 50 percent from 2015 levels by 2025, and PVH intends to reduce absolute GHG emissions 20 percent from 2014 levels by 2020 and by 35 percent by 2030.

“We discovered that instituting energy efficiency targets helps manufacturers save money, improve performance and increase competitiveness,” Jennifer Kefer, executive Director of the alliance, said. “Setting public targets also signals to shareholders and funders that companies are good actors and worthy investments.”

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The industrial sector includes some of the country’s largest energy users–comprising roughly one-third of all U.S. energy demand and spending about $230 billion a year on energy–and the potential for the greatest savings, the report stated. Manufacturing accounts for 74 percent of all industrial energy usage or 24 percent of all energy consumed in the U.S. According to the U.S. Energy Information Administration, industrial energy consumption is projected to grow more than 25 percent between 2016 and 2040.

The report noted that several barriers to industrial energy efficiency are state-government based, such as programs creating special exemptions for large energy users. Utilities also create obstacles by imposing prohibitive rates on companies that use combined heat and power. In the end, the report noted, companies that don’t set energy efficiency targets as a result of these barriers miss the opportunity for major cost savings and risk losing a competitive edge.

The alliance’s analysis recommends that states and utilities become part of the solution to help manufacturers become more efficient.

“State governments should help manufacturers become more energy efficient,” the alliance’s Kefer said. “When companies reduce their energy use, it makes them more competitive, creates job opportunities and lowers utility bills for all consumers.”

The vast majority of companies (96 percent) that have set public energy efficiency targets have also established greenhouse gas (GHG) targets. This demonstrates that investing in energy efficiency is a useful strategy for companies seeking to reduce their GHG emissions and demonstrate corporate leadership, while also boosting their bottom lines, the report stated.

“Whether internal or external, targets are often essential to provide the focus, direction and sense of urgency necessary to quickly capitalize on readily available benefits,” the study noted. “Establishing public energy efficiency targets further maximizes those benefits by demonstrating corporate leadership, driving performance and accountability, and improving the public and investor perception of a company’s brand.”