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Andrew Sloan

Sustainability

Why Going Green Can Bring in the Green $$$

The compelling business case for sustainability

Published: Tuesday, February 21, 2017 - 13:03

At times it can be difficult to have a common-sense discussion about the relationship between business and the natural environment. The discourse (maybe argument is a better word) tends to be highly charged, and the opposing camps seem to have lost the ability to listen to each other.

The polarization has gotten to the point that either you’re a job-destroying tree-hugger detached from economic reality, or a planet-plunderer, devastating the environment without a thought to anything except the bottom line. You can be pro-environment, or pro-business, but apparently not both.

This state of affairs is self-defeating and turns off reasonable people of all backgrounds. So I have a proposal: For the next few minutes, let’s hit the mute button on the politics. Without the background noise, we can start to have a sensible discussion.

Consider the following:
• A unit of energy saved is a unit less that needs to be purchased, and therefore generated, irrespective of its source.
• A pound of waste avoided during production means less raw material that needs to be purchased.
• A pound of repurposed waste can be resold, while avoiding the need to extract any additional raw material from the earth.
• Word of mouth can take a great, efficient product with a positive environmental impact and make its sales go viral, vastly increasing revenue.

In short, there is a strong argument that efficiency in business is frequently good for profit and for the planet. Continuous improvement—the invisible innovator—has a decades-long track record of delivering efficiency in industries like manufacturing.

A growing number of business leaders are pioneering environmental stewardship combined with an unwavering focus on profitability. As they link continuous improvement principles, design thinking, and technology with a mandate to eliminate environmental impact, these champions are showing us a sustainable path to financial rewards: green and green.

The late Ray Anderson and his company Interface demonstrated that sustainable business could bring enormous financial success. Interface embarked on a sustainability drive during the 1990s, and it was the real deal. Not a glossy campaign to appease some customers, it was an ambitious program with a genuine, stated goal of manufacturing carpets 100-percent sustainably. Zero emissions. Zero waste. Competitive and profitable. And that was in 1993. Imagine the skepticism that Anderson and Interface must have encountered, chasing these goals ahead of their time

With Anderson’s personal backing, employees were challenged to look at every aspect of how the company’s carpet was produced—from the origin of the raw materials, to the product’s removal from the customer’s premises at the end of its useful life. Intelligent use of design identified ways to drastically reduce waste during production and installation. Out-of-the-box thinking resulted in “floating floors”—carpet tiles that could be laid without the need for glue. “Cool carpet”—carbon neutral flooring—was introduced and became a big seller.

Success wasn’t achieved overnight, and not every initiative worked. But with time, results began to emerge. Costs went down while profits went up. The company grew strongly; over a 12-year period, it doubled profits while measurably reducing its environmental impact. Anderson discovered that genuine sustainable practice was a differentiator in the market that no advertising campaign with trees and soothing music could equal.


Ray Anderson elaborates on the compelling business case for sustainability.

Prologis, an industrial real estate owner, realized that there was huge potential to install solar power on the roofs of its warehouses. “We were motivated to generate clean power but also to leverage an underutilized asset,” notes Prologis VP Matt Singleton. “This is a for-profit activity.” The company now has the second-largest installed solar capacity in the United States, and the power generated can be used directly in the warehouse or sold into the grid. It’s popular with their tenants, too, who brag to customers about the green credentials of their warehouses.


Hidden profit being unlocked on the roof of Prologis warehouse

Employees sometimes meet improvement programs with skepticism. Efficiency might be interpreted as a greater chance of being “efficiently” dispatched when the programs have met their goals. And if we’re honest, there are smart, capable employees who harbor some resentment striving for improvement only to see the fruits of their labor lining only shareholders’ pockets.

What if this paradigm was reframed? Continuous improvement for the company and for the environment. I believe there’s a tremendous opportunity to set the creativity of employees loose, motivated by reasons beyond economic profit. People want to be successful, they want the same for their companies, and they also care about the world they inhabit. Rewarding green innovation may be markedly more motivating for employees than asking them to focus narrowly on cost reduction. In the end green innovation can be a financial benefit as well.

Few will genuinely disagree that our natural environment is precious. If a business can increase profit while minimizing or eliminating its environmental impact, isn’t that a goal we can and should all get behind? Our businesses can protect profits and the environment if we choose to do so. With businesses behaving as environmental stewards, we can all put our creative energy into sustainable practices.

Let’s embrace innovation as a force for both profit and sustainability. Business vs. the environment is a false dichotomy. We should conduct business sustainably and profitably, and with a continuous improvement mindset, we can get there.

Discuss

About The Author

Andrew Sloan’s picture

Andrew Sloan

Andrew Sloan is the director of content and strategy at Optimum Output, creators of The BPR and strong believers in continuous improvement. The BPR helps companies and teams improve their business processes and enhance collaboration. When Sloan isn’t on the side of a mountain somewhere, he’d love to talk to you about realizing improvement in your organization.