Lesson #2
Develop capability internally
External advisors and contractors play an important role, but ownership of the analysis and investment decisions must remain internal. Energy capex is very small compared to asset value - on average, 0.9% in Slättö's portfolio - and the ability to execute efficiently is key.
To integrate energy performance into investment decisions, asset management and capital allocation, specialist expertise needs to exist within the organisation. Building internal capability – with dedicated sustainability and energy expertise – has been critical.
However, capability is about more than headcount. It requires continuous engagement with peers, industry experts and technology providers to understand which solutions work in practice. Energy efficiency technologies, from heat pumps, geothermal, solar and AI, to name a few, are evolving.
Also, capability is about efficiency and simplification. Investing in a high number of small energy capex projects risks increasing transaction costs. The advantage lies in executing energy capex cost efficiently, in assets where it most improves risk-adjusted returns.
Energy capex projects are typically small, requiring an efficient process
Typical energy capex projects from Slättö's portfolio, EUR m per asset:
AI & optimisation
0.02
Residential brown-to-green
0.8
Residential geothermal
0.5
Logistics & light industrial
0.3
How we do it
In-house expertise
Internal energy and sustainability experts are an integral part of the team, from transaction screening to asset management.
Proactive sourcing of energy projects, often at transaction.
Simplified processes for approval – all energy projects above certain Yield on Cost get done.
Delivery model
Internal team leads larger energy efficiency projects.
Smaller projects are delegated to external, technical asset managers.
Preferred sub-contractors who deliver quality at fixed project cost.
Tracking and learning
Continuous review of the evidence from energy efficiency projects, to learn.
Proactive dialogue with peers and value chain to learn about existing and upcoming solutions.
Cooperation with university researchers in the energy field.