Canadian Federal Building Initiative (FBI) – overcoming short termism
Example of:
How the use of financial management and accounting can help improve sustainability
Key points:
• Under FBI, private sector companies retrofit government properties to make them more sustainable (energy and water efficient).
• The private companies raise the upfront investment and are repaid by the Government from the resulting energy savings over a number of years.
• The FBI method allows for capital projects to be funded from operational budgets.
FBI was established in 1991, making it one of the most established programmes of its kind in the world. Under the FBI private Energy Service Companies (ESCos) carry out energy and water efficient retrofits of Government properties, while raising the upfront investment for this work themselves. ESCos are repaid over a number of years from the resulting savings to the building's utility bills, with the Government body keeping all the savings thereafter. FBI contracts ensure that ESCos guarantee net savings to the contracting body.
The FBI method is a proven way of overcoming the split between operational and capital budgets. Under the FBI, Government bodies are able to pay for capital renovations over the long term, out of the annual savings in their utility bills.
While programmes like this exist in other countries, the Canadian FBI stands out, both for the support it gives to individual Government bodies and for its established record. Since its inception in 1991, it has addressed 35 per cent of all Canadian Government properties. Currently, there are 80 energy efficiency contracts in place, covering some 7,500 buildings. By early 2005, this had resulted in £14.2 million* in annual savings, and reductions of approximately 200 kilotonnes of greenhouse gases.
*Using the exchange rate as of 10 February 2005: $1 Canadian = £0.43.