Share By Sachin Shenolikar
On Earth Day, Real Business takes a look at corporations making efforts to reduce their carbon footprint, and cut costs in the process.
Sustainability. It’s a buzzword you hear often, as many businesses — ranging from big to small — are hyping up their green initiatives.
There is an altruistic purpose to sustainable business practices — after all, it’s a conscious effort to preserve the environment that we all share and future generations will need. But it can also have a positive impact on a business, namely reducing costs and helping to make its workflow more efficient.
Lean economic times have forced companies to rethink how they work, and green initiatives fall right in line with their needs.
“It’s not despite the financial restraints, it’s because of the financial restraints that sustainability will continue,” says Catherine Reeves, a member of the Environment, Health, Safety and Sustainability Organization at Xerox.
“Sustainability is synonymous with simplification. When we simplify, oftentimes we reduce environmental impacts like waste and energy, we reduce our costs, and we improve the way we work.”
It’s not “sustainability” if you don’t have all three benefits.
Many companies are doing the little things that add up to big sustainability results by redesigning their workplaces to replace single-use electronic devices with EPA Energy Star certified multifunctional devices and installing workflow applications and software to go digital as an alternative to printing on paper. Also, municipalities and state governments have implemented solutions that make finding a parking space in congested areas easier and quicker. That too can have a domino effect: Fewer cars idling in traffic means less burning of gas, which means fewer greenhouse emissions and lower costs for consumers who don’t have to refuel as often.
Reeves cites Zipcar’s business model, which focuses on allowing customers to rent cars for a few hours so they can run errands or make other short trips. The result has been a win in several areas: 1) There are reduced greenhouse gas emissions due to people only using cars when they really need them, 2) Zipcar has become a profitable company, and 3) Customers are happy because they save money with hourly rental times.
Building a long-term sustainability strategy is a more complex endeavor, which is why it has become a team effort. The Corporate Ecoforum is an organization in which member companies exchange best-practices and brainstorm ideas. Sixty-six corporations from 18 industries belong to the Ecoforum, which features year-round workshops and virtual meetings, and access to special reports.
Corporations are also gathering and analyzing data on their sustainability initiatives, both to measure their performance and to show investors and customers how well they are doing.
“It’s important to have the data behind your environmentally sustainable claims, or you may fall prey to “greenwashing” allegations. Regulations in the United States, Canada, and some European countries prohibit “greenwashing,” which is punishable by requiring the product to be taken off the market, hefty fines, and further litigation,” says Reeves. “The consumer has gotten more savvy. They want to see the numbers.”
Enter the Carbon Disclosure Project (CDP), a U.K.-based organization that asks companies to submit data in areas such as climate change, water usage, and supply chain — and then calculates a score. Hundreds of companies submitted CDP applications in 2013.
“CDP is the leader in allowing investors to see how successful companies are in the field of sustainability, greenhouse gases, and energy conservation,” says Joe Stulb, manager of assessments and environmental operations at Xerox.
The CDP’s questions are forcing companies to analyze their environmental strategy on a deeper level — and thereby influencing their future.
“Year by year, more participating companies are trying to improve their response and update it,” says environmental consultant Jayne Nippress of URS, which helps corporations with their CDP submissions. “I think they are getting better, definitely.”
Sometimes simplification is not so simple. Achieving sustainability it is a process that requires intricate planning and constant tweaking. But if the short-term results are any indication, the potential long-term impact of going green can be tremendous — for the environment, businesses, and customers alike.