Targeting Energy Efficiency

While making site visits to Target distribution centers in recent months, Jamie Mikkelsen was struck by the “vastness” of it all: Not just the size of the physical space, but also the great opportunities for energy efficiencies — and by extension, cost savings.

It’s not that Target was doing anything wrong; it was more that the company was doing so much right with sustainability initiatives that Mikkelsen wanted to come on board. The Environmental Defense Fund’s Climate Corps program allowed her to do just that.

A student at the University of Michigan working on both an MBA and a Masters degree in science, Mikkelsen spent her summer as one of more than 50 Climate Corps Fellows. Her purpose? To be another “champion” of energy efficiency at Target, bringing external eyes and ears to analyze energy saving opportunities and develop custom energy efficiency investment plans.

“It was a great experience,” Mikkelsen says. “I wanted to see how a large corporation tackles environmental sustainability issues.... And retail is a great space for sustainability. There are so many products out there that can be dealt with and improved upon, and ways that can be interfaced with the customer. There’s also a real opportunity for education and really learning what consumer needs are.”

The program, which began in the summer of 2008 with seven Fellows, has recently added retailers including adidas, J.C. Penney and Staples. This was the first year of Target’s involvement, and spokeswoman Erin Madsen says the company would “definitely consider” participating again.

“The health and sustainability of the communities in which Target does business has been incredibly important to us since we opened our first store in 1962,” Madsen says, “and this fellowship was a natural extension of that commitment. The partnership came about through relationships we had already established with the EDF. They approached us, and we felt like it would be a really good fit.”

Emily Reyna, a 2008 Fellow who is now a project manager with the program, says EDF looks for numerous criteria in fellowship candidates: “Big company” or consulting experience; enough financial training to be able to make the business case for the energy efficiency process; a “proactive, entrepreneurial or self-starter attitude”; and a passion for or past experience in sustainability.

“Companies — and people in general — pay attention when you can make a financial business case for sustainability,” Reyna says. “If I was going to go into a company that didn’t do anything in terms of sustainability, I would say energy efficiency was the place to start. It means easy wins and can show real savings over time.”

Integrating efficiency
In Target’s case, Mikkelsen was part of an environmental sustainability group already established at the company and was able to grow relationships in other sectors, as well. Seeing the “very large warehouse spaces” for the first time helped her realize that, in the fight for sustainability and energy conservation, “buildings are a great place to start.”

Madsen says Target — whose other sustainability efforts include in-store recycling stations, garment hanger reuse, lighting efficiency programs, trailer-loading optimization and the like — was already considering what could be done to improve the energy efficiencies of its distribution spaces. But it lacked the manpower to undertake a detailed analysis.

“We identified that [the Climate Corps] program would be a great fit for that,” she says. “A student would be able to apply theory learned in school with the reality of hands-on work in a large organization, so it would be mutually beneficial.” As a result, she says, Mikkelsen was able to deliver numerous recommendations that the company is currently considering in greater depth.

Students who take part in the Climate Corps program are paid by the company involved rather than EDF, and the going rate is a minimum of $1,250 a week. In the first two years alone, Climate Corps Fellows uncovered inefficiencies in lighting, computer equipment and heating/cooling systems that could help companies save $89 million in net operating costs over the lifetime of the projects. That’s in addition to cutting the equivalent of 280 million kilowatt hours of energy per year and avoiding more than 157,000 metric tons of greenhouse gas emissions annually. It equates to the amount of power used in 24,000 homes and the removal of 19,000 SUVs from the road, according to the EDF.

“Going forward, we’re trying to figure out the next step, so companies are really institutionalizing energy efficiency and sustainability into their overall decision-making process,” Reyna says. “We’ve had a handful of Fellows work on more strategic projects to do that. What I’ve learned, as the program evolves, is that some companies started with the low-hanging fruit. But they may have been doing that for 10 years and are now working to make energy efficiency and sustainability an ingrained part of the company process.”

In the meantime, Madsen says, the folks at Target will be considering the next project a Fellow might tackle. The company is already highly active in campus recruiting, and the Climate Corps program is another way to “stay connected to that emerging talent that’s poised to take on the sustainability challenges we face and will face,” she says. “Environmental sustainability is integrated throughout our business, from the products on our shelves to the way we design our buildings. Target takes a comprehensive, holistic view and applies what makes sense to stay relevant to our guests and affect meaningful change.”