Minnesota Companies are finding that Eco-friendly can also be business-friendly
Arguments about climate change and environmental protection have centered for years on two extremes: the "we'll all die if we don't do it" pole and the "it would destroy the economy" pole. Hearing this rhetoric, many business owners have worried that their activities were harming the environment, but also thought they couldn't address it without harming their businesses too.
But going green isn't a moral imperative without a business purpose. Instead, it's a discipline that, when applied consistently, can help you do more with less, use resources more efficiently,and continuously seek new ways to improve that efficiency. And many companies in Minnesota are quietly discovering that going green actually has a comprehensible counterpart in the business world: the principles of Six Sigma and lean management, which search for inefficiencies and waste in business operations. They're finding that, far from sending them into the red, green really is the new black.
Doing Well by Doing Good
Ecolab is a well-known provider of products and services to help institutional and food and beverage processing companies keep their facilities sanitary. The company has a Sustainability Initiative Group (SIG) that cuts across all functions, and members of the group look for ways to make Ecolab's operations more sustainable in their own areas of specialty.
The company has several goals for reducing their environmental footprint, which will be covered later. But in the company's R&D division, the SIG's work has led to both kinds of green: new products for customers, product that also make their operations more efficient and less resource-hungry. For example, bottling plants use a lubricant to keep their conveyor belts running smoothly, so that the bottles don't tip over as they travel through the process. But that lubricant requires a lot of water, meaning significant consumption and occasional spillage that leads to unsafe conditions. Ecolab developed a product called DryX, which Matt Molinaro says cuts the bottlers' water usage for lubrication by 90 percent. That's just one example of how going green internally has led to more sales opportunities with customers externally.
"We see our green initiatives as ways to be a well managed business," explains Molinaro, a principal chemical engineer in the SIG. "We have 55 facilities worldwide, and we have internal goals for greenhouse gas emissions, water use, waste management, and other factors, but our customers have a lot more facilities than we do. By having a good internal program, we can help our customers with their own efficiency goals, and that means a lot of leverage to reduce water and energy use around the world."
Solid Business Case
The key to understanding the value of greening your business is the time-honored standard for decisions, whether it's buying a new building, investing in a new technology, or hiring more salespeople: What's the business case?
Thrivent is a respected insurance company with 3,000 corporate employees at its Minneapolis and Appleton locations, and another 2,500 field salespeople. Its Green Team, a 70-member cross-functional team that looks for ways to reduce energy and material use, finds more ideas than the company could ever implement. They narrow their choices by performing a hard-headed calculation of what return the company will get from its investment or change in behavior.
They've seen their most notable successes in energy usage. Thrivent started with low-hanging fruit, like the lights; they replaced all of their 32-watt fluorescent bulbs with 25-watt bulbs in the Minneapolis facility. They added variable-speed drives on their air-handling units. They stopped buying chilled water from an energy plant and invested in their own chiller plant. The chiller alone saved them $300,000 a year, but all of their energy-use initiatives saved them more than half a million dollars at the Minneapolis facility alone between 2002 and 2007. Today, between the two facilities, they save $1.2 million annually.
"One of the team's guiding principles is that a new idea needs to not only make green sense and be the right thing from a sustainable perspective-it also has to make financial sense," says Kirsten Spreck, director in the corporate services group for Thrivent.
They also took a look at their restroom facilities, and last year their first round of renovations saved 2,498 gallons of water in the first month after they were completed. They replaced paper towels with hand dryers, reducing their waste removal costs and their carbon emissions at the same time. Even food waste is treated differently now; rather than paying the waste removal costs to throw it away, they sell it to Minnesota hog farmers, who use it for feed.
"The savings weren't huge with this initiative, and the upside was saving not quite $2,000 a year," Spreck says. "But we looked at how much we could save on waste hauling, including the pickups, taxes and fees, and we saw that we would be financially a little bit ahead by taking it on."
The Green Team's success is considerable, but part of that success is being careful to stay integrated with the business. "We always work with the business partners, and they have to be involved at the ground level," Spreck explains.
For example, Thrivent has a continuous improvement (CI) organization, which focuses on lean management and implementing Six Sigma tools and processes. The Green Team deliberately partners with the CI organization, and the CI organization in turn has changed its mission and vision. Where before it searched for seven types of waste, today it searches for an eighth: the use of resources, like paper or energy, that isn't sustainable. "The interaction goes both ways, in that we've been asked to put Green Team members on CI initiatives, and we have several CI people o n the Green Team," Spreck says.
Inputs and Outputs
It's not easy to look at a complicated business entity (and they're all complicated in their own way) and pick out all the pain points where water, energy or other resources could be used less or where one investment could lead to vast savings. But it helps to translate what you do into inputs and outputs.
For example, Molinaro explains that Ecolab has set goals for its greenhouse gas emissions, but it has translated those goals to something every business is preoccupied with: revenue. "We've committed to reducing our U.S. greenhouse gas emissions by 20 percent per dollar of sales between 2006 and 2012," he says. "That means that for every dollar of sales we produce, we want to reduce the carbon emissions that are required to produce that dollar by 20 percent."
They're reducing those emissions in different ways, from the manufacturing floor to the parking lot. In manufacturing, they're looking for ways to take heat created as a by-product in one process and use it in another process where the heat is a valuable input. They also look for ways to get the most out of their raw materials by re-using any that are left over in manufacturing processes.
In the parking lot, they're improving the efficiency of their vehicle fleet. They're focusing on two areas: the fleet itself, and the way it's used. "We're changing the mix to offer more fuel-efficient vehicles to our associates, but we're also training for more efficient driving behaviors," Molinaro says. "We have a driver training module that goes over best practices, like gentle acceleration and braking, and avoiding idling for long periods. We also offer an efficient route-planning tool so that associates can make the most of every trip."
Enlist the Employees
That example highlights another important aspect of going green: It's not just the technology, it's the people. Some savings can only come through the efforts of the whole organization, and there are times when it's key to enlist your employees in the fight by asking them to change their behaviors.
At Thrivent, a 2010 event called the WasteWise Trash Sort showed employees how many recyclable items ended up in the trash. By calling attention to this fact, Spreck explains, Thrivent hopes to reduce its waste handling costs still further by asking employees to recycle instead of throwing those items away.
"We've conducted a pilot program where we notify people through our janitorial partners when a recyclable item is discovered in their trash, like a bottle or a piece of paper," Spreck says. The employee in question gets a slip that points out the recyclable item and asks them to dispose of it in the appropriate container, and their trash is not emptied.
The point is education: "It doesn't get mentioned to anybody's manager, and we're not trying to have a hall of shame with this program," says Keturah Pestel, code of conduct officer for Thrivent. "Also, if the item is still there the next day, the trash will be emptied and the item recycled."
The company will soon be taking it organization-wide based on the success of the pilot, Spreck explains. "It's changed people's behaviors, and today we give out almost no notices."
In fact, it's often in employee-or subcontractor- behaviors that you can find those cost-saving measures that don't cost anything to implement. Ted Stearns is the facility operations manager for Thrivent's Minneapolis location, and he says that the simplest changes in people's behavior can lead to savings. "We asked our cleaning company to change the way they cleaned, and to do it floor by floor as a team," he says. "That means there's no need for lighting except for the floor they're cleaning. We put up signs to use the revolving doors, and just by eliminating the use of those wing doors, which lead to so much transfer of heat and cold, we've seen savings on the HVAC side."
One way to structure your efforts might be to pursue Energy Star or LEED certifications. They aren't just series of hoops to jump through until you've got a piece of paper that says you're green. Nicolas Thomley says that by pursuing LEED certification in his company's new headquarters, a 100-year-old building in Northeast Minneapolis that was renovated in 2008, he both saved money and sent a message to his customers and community stakeholders.
"We use daylight and motion sensors to reduce electricity costs, water fixtures that use 36 percent less water than standard fixtures, and the building's natural gas and electricity costs have been reduced nearly 20 percent," says Thomley, whose official title is chairman and secret weapon for Pinnacle Services, a company that provides full-time staff to residential human services programs.
The effort to earn Gold LEED status was worth it, Thomley says, not just because it keeps his costs down and has a long-term payback, but because it gives his company an intangible benefit. "The improvements pay for themselves, but I wanted to demonstrate our commitment to being sustainable to the employees, our customers, and the community."
The process also alerted him to future improvements that aren't financially feasible now, but might be later. The renovation included plenty of water-saving features, including dual-option push-button toilets and automatic sinks. But someday Thomley hopes to add a water reclamation system to the building. "We wanted to have a system that would capture rainwater to use in the toilets," he says. "We do plan to add it in the future, but there was only so much money this time around." mb
KEEPING IT GREEN
Going green isn't something you do in a year and never do again. Instead, it's a constant process of finding more and more ways to do more with less. In your own efforts to make your business more sustainable, here are some thoughts to keep in mind:
» Start small. Encourage employees to turn off their monitors at night, or to recycle, or to ride the bus to work. Once they're thinking in green terms, they're more likely to come up with ideas in their own areas to make the business more green.
»Make the business case. It's good financial discipline to ask whether a green option is the best one. If you decide you won't save money this year, you can always revisit it next year.
» Leverage your most important resource. Ask your employees, your subcontractors, your vendors and your customers how you can make your business (and theirs!) greener. You'll get more ideas than you would ever come up with on your own and you'll engage their energy for the changes that have to be made.