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Williams-Sonoma Energy Management Liaison: Genevieve Dufau Annabelle Louie Elizabeth Lombardi May 2007
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Table of Contents 1)Williams-Sonoma Overview 2)Project Objective, Scope, & Evolution 3)Methodology 4)Key Findings 5)Energy Management Action Plan 6)Implementation Guide 7)Upgrade: Corporate Facilities & Retail Stores 8)Collaborate: Partnerships 9)Communicate: Education & Engagement 10)What We Learned
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The Company Williams-Sonoma Inc. includes a portfolio of retail concepts: Williams-Sonoma operates 570 retail stores across 43 states, Washington D.C., and Canada Retail business is coupled with direct-to-consumer strategies, encompassing catalogs and e-commerce which generate incremental revenue and brand awareness
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Methodology Interview Williams- Sonoma Energy Needs Existing Programs Analyze energy usage 2 SF offices 1 SF store Collaborate with PG&E to identify: Specific upgrades Costs/rebates Calculate financial impact: Energy savings ROI 1234 Created implementation guide for roll-out to other facilities, stores, and employees 5
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Key Findings Williams-Sonoma has a solid foundation in energy management –Opportunity to formalize program, gain alignment from key stakeholders and engage employees and consumers We identified several no-cost to low-cost opportunities that can enhance its energy management performance –i.e. ENERGY STAR programs and rebates Responsible energy practices makes good business sense and is a competitive advantage for Williams- Sonoma. –Capitalize on both by leveraging an integrated business strategy (Upgrade, Communicate, Collaborate)
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Energy Management Action Plan An Integrated Business Strategy Our Energy Management Action Plan aims to: Upgrade facilities and benchmark on best energy management practices Communicate improvements internally and externally Collaborate with strategic partners to strengthen Williams-Sonoma’s CSR efforts with its business objectives UPGRADE COLLABORATE ENERGY MANAGEMENT COMMUNICATE
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Implementation Guide Portfolio Manager (manual) or Automated Benchmarking Service Application/ Verification Conduct PG&E audit Free service Identify areas of improvement Obtain list of vendors Evaluate upgrade options RightLights Cleaning PG&E ENERGY STAR Financial evaluation ENERGY STAR v. conventional models Rebates Communicate & engage employees Implement upgrades Track improvements Utility costs Portfolio Manager or Automated Service monthly reports 34 2 7 6 8 Analyze energy performance If qualify, apply for green certification Calculate costs and savings potential Raise awareness Improve workplace pride Obtain buy-in for future green projects 15
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Upgrade Corporate Facilities ENERGY MANAGEMENT
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Williams-Sonoma Self-Assessment of Energy Management 1. Commit to Continuous Improvement Energy Leader Energy Champion Energy Team Energy Policy Energy Plan Accountability Participation Levels 2. Assess Performance and Opportunities Track and Analyze Data Documentation Benchmarking Technical Assessments Best Practices 3. Set Performance Goals Goals/Potential Career Development Energy Team Incentives 4. Create Action Plan Improvement Planning Roles and Resources Site Planning Integration 5. Implement Action Plan Communication Plan Energy Awareness Building Staff Capacity Contract Management Incentives and Rebates 6. Evaluate Progress Measuring Results Reviewing Action Plan 7.Recognize Achievements Site Recognition Organizational Recognition External Recognition Framework: Energy StarAssessment by: Bill Perez, Director of Facilities Little or no evidenceSome elements/degreeFully implemented
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Ice HouseVan Ness Address: 151 Union Street San Francisco, CA 94109 Year Built: 1908 Gross Floor Area: 217,492 sq. ft. # of Occupants: 1,047 Primary Use: Office Address: 3250 Van Ness Avenue San Francisco, CA 94111 Year Built: 1940 Gross Floor Area: 170,068 sq. ft. # of Occupants: 522 Primary Use: Office
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Facility Energy Performance Quantitative Assessment Collect energy usage data on Ice House and Van Ness: Space type Gross floor area Number of occupants Number of PCs Operating hours/week Electricity & gas meters Indoor & wastewater meters Garage space
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Van Ness Performance Summary
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ENERGY STAR Rating Rate Energy Performance Rate buildings using Energy Star Rating System: Based on a scale of 1-100 relative to similar buildings nationwide Normalized to accounts for weather variations Buildings that perform in the 75th percentile or above can earn the Energy Star label Ice House rating: 75 Van Ness rating: 80
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Example: Lighting at Van Ness What Works & What Can Be Improved Perimeter metal halides are inefficient and add mainly ambience Tall windows bring in lots of natural light Halogen ceiling floods Lamps along skylight add little benefit No occupancy sensors CFL exit signs (LED is best) Skylights CFL wall sconces
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Summary of Upgrade Recommendations for Van Ness Lighting T12 T8 Incandescent CFL CFL LED Occupancy sensors Daylight harvesting HVAC Cleaning Variable frequency drive (VFD) Temperature controls Office Equipment Adopt ENERGY STAR procurement policy Start with monitors Cost Annual Savings $29K $27K 140K $33K Varies 25-50% An annual energy cost savings of 18% can be achieved through these selected lighting, HVAC, and office equipment upgrades Benefits Immediate cost savings Increased employee comfort and productivity Successful implementation leads to other green projects
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Financial Impact of Van Ness Upgrades The Bottom Line Investing $170K in the recommended lighting and HVAC upgrades will reduce annual operating expense by $60K, or an 18% energy cost savings The simple payback period is 2.3 years and the return on investment is 43% Costs, annual savings, and rebates provided by PG&E These are conservative estimates that do not take into account co- benefits of upgrades $60K savings = 18% reduction in annual energy bill
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Williams-Sonoma Retail Stores Average Size: 6,018 Sq. Ft. Total Operating Hours: 13 hours/day Annual Utility Cost: $14,872 - Lighting (31%): $4,610 - HVAC (55%): $8,180 - Other (14%): $2,082 Annual Utility Cost Per Sq. Ft.: $2.59 Challenges: Substantial energy consumption due to large size of stores, long run hours, and quantity of stores Sales lights are important for product display, but incandescent ones are inefficient and increases HVAC load Fluorescent lights have been installed (particularly for non- sales area), but cost-savings have not been tracked
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Summary of Upgrade Recommendations for Retail Stores Lighting Install newer generation of T8s Experiment with new lighting technologies Occupancy sensors HVAC Install outside air economizer Use Energy Usage Index to benchmark stores Cost Annual Savings $550 per store $460 per store $2,550 per store $238 per store An annual energy cost savings of 10% can be achieved through these selected lighting and HVAC upgrades Benefits Immediate cost savings Efficient lighting reduces HVAC load Even a small energy reduction can be significant, given the large quantity of stores
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Financial Impact of Retail Store Upgrades What is the financial impact of achieving a 10% annual energy savings across half the fleet retail stores? The Bottom Line Investing $686K ($0.40 per sq. ft.) to reduce energy usage by 10% will result in an estimated $424K annual energy savings. The simple payback period is 2.5 years and the return on investment is 39%
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Collaborate ENERGY MANAGEMENT
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Partnerships Identify Share Visions Capitalize on Synergies Magnify Impact and Grow Awareness
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Expand Reach via Green Partnerships Renewable Energy Purchase Program Potential Partner Program Rebates & Incentives Certification 360 Energy Efficiency Apply for ENERGY STAR building label and local certification Apply for Green Business Certification Green Home Green Power Utilize green power by purchasing RECs or carbon offsets for all or a portion of electricity use and carbon emissions. Objective Partner with and leverage the most recognized brands in energy efficiency Support a well integrated energy management program with green power Tap into PG&E’s cost- saving programs, rebates, and incentives Smart Energy Take part in one or all of the various programs: Demand Bidding Critical Peak Pricing ClimateSmart SF Green Biz
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Expand Reach via Corporate Partnerships Potential Partner Program In-Store Program On-line Program Earth Day: Carbon-Free Shipping Quantify and purchase carbon offsets for GHG emissions from online and catalog shipments. Right Lights. Gift with purchase: Receive a free GE compact fluorescent light bulb with purchase of $50 or more. Objective Raise awareness for Williams Sonoma’s climate change efforts. Align Williams Sonoma with innovative campaign and energy leader.
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Communicate ENERGY MANAGEMENT
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Employee Survey at Williams-Sonoma shows that for 84% of employees it is important or very important to “work for a company that has a commitment to sustainability and the environment” Opportunity to increase employees’ interest level by engaging employees and making it a part of their overall experience at Williams-Sonoma Importance to Job Satisfaction
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Engage Employees Establish & Communicate Energy Goals Engage Employees Develop Cross- Functional Energy Team Employee training and involvement. Annual meetings, e-mails, intranet Share key achievements and milestones Provide opportunity for employee feedback and new ideas Rewards and recognition Establish goals and key metrics Gain alignment on goals from key stakeholders Communicate corporate policy and annual goals Engage interested employees across company to help advance energy goals Idea generators, communicators, motivators.
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Employee Education New Employee Handbooks Newsletters Break room Posters Contests, Games Manager meetings Vehicles Hone the MessageEffectiveness Reiterate Goals Educate Influence behavior Community Impact Keep Simple Straightforward Frequency Accessibility
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The Stockroom Is A Great Place to Communicate Energy Goals & Performance Currently, there are no mentions of energy efficiency in stockroom notices or in Store Operations Manual Energy goals and performance should be communicated to employees and tied to daily goals Keep energy efficiency top of mind with monthly newsletters
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Reiterate goals Educate Influence behavior Community Impact Source: Gap Inc.
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Williams-Sonoma core consumers skew towards Light & True Greens True Greens Regularly buy green products Older (45-54, often parents) More Educated Higher Household Income Light Greens Sometimes buy green products 35+ Represents purchasing habits of general population (i.e. turning “green) Never Greens Skews younger (>35 yrs old) Often unaware of green products Green Consumer Segments: % of US Population Source: Green Living Report. Mintel, Sept. 2006
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Satisfy Demand for Greener Products Green Bamboo Sustainable Wood Organic Cotton Composting Energy Efficiency
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What We Learned Value to Williams-Sonoma –Immediate cost saving opportunities –Actionable implementation guide –Resources and tools for energy management Value to Us –Learn about energy efficiency –Apply analytical, strategic, and creative thinking –Work with a really cool company!
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Thank You For The Invaluable Experience! Genevieve Dufau, Awesome Liaison, Marketing Planner, Pottery Barn Bud Cope, Senior VP of Store Development Oliver Clode, VP of Catalog, Marketing, & Finance Bill Perez, Director of Facilities Jon Ward, Director of Store Repairs & Maintenance Dave Aylard, Director of Leasing Jay Oshiro, Senior Analyst, Customer Insights & Market Research Christina Nicholson, Manager, Marketing Services Steve Stewart, Data Center Manager Bernie Conlu, PC Procurement Nina Godinez, Assistant Lisa Shell Adam Selvin Heba Petursson Nik Kaestner Liz Mueller Diana Simmons Dave Gunter Adam Werbach Darren Karopczyc Sushma Dhulipala SF Green Biz Audrey Chang Cliff Chen Kellie, Colleen, & Our Class!
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