By Neal Tsay, MBA Candidate at UCLA’s Anderson School of Management, 2011 EDF Climate Corps fellow at Target
As a former history major, probably the last place I would have expected to spend my MBA summer internship was at a large architecture and engineering firm in Minnesota. Well, almost. Store Design at Target Corporation is the department that handles architecture and engineering (A&E) for its 1,762 U.S. stores and over 100 stores in Canada opening in 2013. If Store Design was a stand-alone A&E firm, it would be one of the largest in the United States. And it is where I spent my summer as an EDF Climate Corps fellow.
Last December, Target made several public commitments to sustainability – among them, getting 75% of its U.S. buildings ENERGY STAR certified by 2016. As one can see from Target’s Here for Good website, only 8% were certified as of last year. My task? Develop the plan to help Target meet its ENERGY STAR commitment on time.
Innovation is everywhere at Target. While most of my EDF Climate Corps colleagues were hunting high and low for energy-saving opportunities at other companies, I was sitting pretty with an existing list of no less than 60 different innovation projects in development to make Target stores more energy efficient. Prioritizing these projects and optimizing their deployment across 1,762 stores, both in terms of financial returns and ENERGY STAR impact, seemed like a monumental challenge for a 10-week assignment. But I was up for it.
In total, my recommendations to the firm, if deployed across all Target stores in the United States, could save over 84 million kWh per year, eliminate over 50,000 metric tons of CO2 equivalent and generate several million dollars in annual energy savings.
I was able to achieve my task thanks in large part to the culture of innovation that had already created a highly efficient portfolio, generating millions of dollars in energy savings that helps Target continue to offer great value for its guests, long before I arrived. So how did Target get so far already, and how will the company reach its commitments? Collaboration is a key factor on several fronts:
Collaboration with Government and Industry. Target is working with the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) through its Commercial Building Partners program to develop highly efficient retail buildings. This involves collaboration with other retailers such as Best Buy and Kohl’s – companies that compete for the same consumer dollar – in sharing best practices to help the retail industry as a whole become increasingly energy efficient over time. A successful pilot program at a SuperTarget store in Colorado could provide many of the solutions Target needs to reach its ENERGY STAR commitment.
Collaboration with Universities and Trade Organizations. Target partnered with the University of Minnesota to study advanced ventilation strategies that maintain good indoor air quality while reducing energy usage. About half of Target’s stores now utilize these procedures, which have saved the company millions of dollars in energy and capital costs without compromising the comfort of its guests. While this has enhanced the ENERGY STAR standing for many stores, Target has more broadly engaged practicing engineers by sharing these innovations through organizations such as ASHRAE.
Collaboration within Target. At Target, team members in engineering, finance, sustainability, stores, commissioning, energy management and more all play key roles in helping Target reach its ENERGY STAR commitment. With 15,000 team members at headquarters, finding information can sometimes be a challenge. However, once people found out about my project, they were more than happy to help and actually quite excited to have somebody on board to help guide Target’s efforts to meet this sustainability commitment.
Expect More. Pay Less. is Target’s brand promise. By expecting more efficient store prototypes, Target itself benefits from significantly lower energy costs, and by reaching its ENERGY STAR commitment, Target would have more ENERGY STAR certified buildings than any other retailer. Collaboration along the way will no doubt provide as valuable lessons for retailers and engineers as it did for this EDF Climate Corps fellow.
EDF Climate Corps places specially-trained MBA and MPA students in companies, cities and universities to develop practical, actionable energy efficiency plans. Sign up to receive emails about EDF Climate Corps, including regular blog posts by our fellows. You can also visit our Facebook page or follow us on Twitter to get regular updates about this project.