Insights from REI on Making the Financial Case for Energy Management Investments

It’s said again and again that electrical sales that focus on energy savings require a salesperson as conversant in the financial justifications and return on investment business cases as in the technical details of the equipment itself. Electrical companies have been working on this, training their sales people and hiring new talent with a good grasp of the numbers. Toward that end, here’s an interesting discussion with an executive from REI, the outdoor gear co-op, about the challenges of securing financial support for energy management improvements in retail.

In a Q&A with Erin Hiatt, senior manager of sustainability and compliance for the Retail Industry Leaders Association, REI’s Mark Lester, divisional vice president of retail operations for REI’s 145 stores in 36 U.S. states, gets into some of the details of how energy system upgrade decisions are evaluated from the financial end. Lester spent 16 years in REI’s financial planning and analysis department before moving to the retail position he has now.

Among the insights in the piece, posted on the GreenBiz website, are how even for an organization as focused on environmental responsibility as REI is, the need for sound financial justification is just as strong as in any other business.

For REI, we have discovered energy opportunities where there is natural alignment between our values and the business value. We are unique in that, if a project breaks even and is a wash financially, we’re more likely to be interested in still doing the environmentally responsible thing because it aligns with our values. Otherwise, financial merits matter just as much to us as any other company.

Well worth the read: Lessons from REI on financing an energy agenda