Energy efficiency means to use less energy to perform a function—that is, eliminating energy waste, a core strategy in a circular economy. Since 2015, global improvements in energy efficiency have been declining. Reversing this trend will be needed to achieve global climate and sustainability goals. Indeed, energy efficiency could deliver more than 40% of the reduction in global energy-related greenhouse gas emissions over the next 20 years (IEA). In addition to reducing greenhouse gas emissions, energy efficiency can also help reduce energy extraction and imports and bring cost savings for households and industries.

Energy efficiency can be applied to a range of sectors, such as in buildings, energy generation, industry and mobility (EESI). In buildings, energy efficiency can lead to the creation of zero-energy buildings. In regards to power generation, energy efficiency could mean smart grids for electric generation, distribution, and consumption. For mobility, energy efficiency could mean vehicles that require less fuel to cover the same distance as well as better rail and truck transportation.

Cities can create energy efficiency programmes that involve both the public and private sector. Actions involving the private sector can be implemented in various forms, such as: regulations (e.g. setting energy efficiency standards in buildings), incentivisation (subsidising energy saving products) and informative campaigns (encouraging energy efficient behaviours). Actions involving the public sector may also be implemented in various forms, such as: public procurement standards (e.g. energy efficient power generation equipment), retrofitting public buildings (e.g. improving insulation) and upgrading energy inefficient infrastructure (e.g. replacing lighting with more energy efficient alternatives such as LED street lighting). These programmes generally have goals and timelines in which the actions are intended to be taken.