The Environmental Protection Agency (EPA) estimates that if manufacturers can cut back their energy use by just 10 percent, they’d save nearly $10.4 billion overall in a year, with enough power left over to run almost 10 billion homes for one year. In April 2008, the EPA and the National Association of Manufacturers (NAM) issued a challenge to the U.S. manufacturing industry—14,000 companies—to meet that goal.

Going Green

The EPA Energy Star Program provides a guide for small businesses called Putting Energy into Profits. Find out more at www.energystar.gov/index.cfm?c=sb_guidebook.sb_guidebook.

In 2007, the EPA Energy Star program recognized just eight small businesses that applied energy conservation methods that reduced their consumption by 25 percent, together saving an estimated $1.2 billion and reducing emissions equivalent to taking 1,600 cars off the road.

Reducing energy use through conservation and efficiency can take a huge chunk of energy costs and emission output off the table, saving considerable amounts of money and protecting our atmosphere at the same time.

Businesses are finding that by reducing waste products, they’re reducing the costs of processing waste and getting more from the resources used at the same time. They are also avoiding the sometimes high costs of transporting that waste.

A small company can experience the same kinds of relative expense reduction by following the lead of the companies that are making the effort to reduce waste.

Going Green

Find out how your business can reduce energy output and join the NAM and EPA Challenge to Save Energy at www.energystar.gov/index.cfm?c=industry.bus_industry.

Selecting materials and supplies for business is also an area that can benefit from a sustainability assessment. For example, it might be possible to replace exotic materials with products that come from local sources. Cutting back on remote sourcing—by finding local resources instead of materials from far away—can save energy and reduce costs, too.

All these suggested reductions can result in lower expenses, which translates into increased profits. Any business person can see the beauty of that, even if he’s not an eco-badge-wearing tree hugger.

What is all this buzz around green anyway? Some choose to think of “green” only in terms of the environment. However, we encourage you to think beyond green and incorporate a social dimension into your green initiatives. This merging of environment, society, and economy brings us to the idea of sustainability. According to Webster’s Dictionary, sustainable means “capable of being sustained.” When we take this definition and apply it to the environment and society, sustainability can mean a multitude of things. We can use it to describe resources used in a way that does not take more from the earth than can be replenished or to describe a company that empowers workers to be innovative and balanced. Sustainability can also describe a society or business that energizes people to be productive contributors to their communities. In short, sustainability is about balancing the intricate cyclic systems of ecology, economy, and society.

By applying the same cyclical approach to our business systems, we can help ensure that we will have a continuous supply of resources, rather than eating them up and leaving nothing but waste. Instead of devouring resources and leaving nothing useful afterward, we want to return those resources to the cycle so they can continue to be productive. For example, when we use water, instead of polluting it with waste products so that it is no longer usable, we want to be aware of what we mix into our water supply and clean it before we put it back into the system. Instead of cutting down a tree and burning it for fuel, producing a waste product that pollutes our air, we use the wood in a way that it can continue to contribute to the life cycle of wood. For example, we might salvage wood and create a new product when its product life has ended and return wood, sawdust, or shavings to the earth, where they can feed and nourish the soil from which new trees will grow. We can replicate this idea with any resource we use. Producing energy from clean, renewable resources such as the sun and wind provides a nonpolluting alternative to conventional burning of fossil fuels and coal, which produces much toxic waste.

The World Watch Institute, much like the Brundtland Commission definition mentioned in Chapter 1, defines sustainability as the ability to meet our needs without compromising the ability of future generations to meet theirs. For the benefit of our children and grandchildren, we can adopt systems and policies that nourish our planet, protect our natural resources, and create thriving societies so they can continue to provide for generations to come. We can incorporate this business practice into our daily routines to ensure we’ll have adequate resources in the future.

Business has thrived for the past 150 years by feeding natural resources such as water, oil, coal, and agricultural products into our economy. However, the process of retrieving those elements from the earth has often created waste products and pollution. In addition, human life and education have been devalued, contributing to increasing societal and health issues. Today, we are beginning to see the real cost of depleting our natural resources and discarding the by-products, and we realize we must develop a new cycle or we’ll soon have destroyed the bounty we’ve been enjoying for so long. Giving back to the earth in proportion to what we use is the foundation of sustainability.

Ray Anderson, CEO of Interface, Inc., a company that is a leader in sustainable business practices, realized more than a decade ago that his industry was using a lot of our natural resources, and when his product’s life ended after just a few years, the old carpets sent to landfills consumed too much space in the landscape. So Anderson went to work retooling his company’s waste practices, and in the process he set standards for his industry to use less of our precious limited natural resources in the production of carpet and flooring products and to put far less of them into landfills. Anderson’s company takes back used flooring materials and reuses them to recreate new products.

Today’s global population is estimated to be just over 6.7 billion people. Over the last two centuries, the global population has skyrocketed, and global trends show that it will continue to rise at a rapid rate. To put that into perspective, according to NOVA science programming, the population of the earth in 1927 was around 2 billion. Until around 1950, the population growth rate remained steady at around 1 percent per year. About this time, advances in public health, including the use of antibiotics, allowed for longer life spans, adding to the population issue. By 1960, the global population reached roughly 3 billion. In the past 50 years, the global population has increased by almost 4 billion people, and by the year 2050, it is expected to hit 9 billion. Our planet and societal systems will have to provide for nearly 3 billion more people than they do now—3 billion more people who want to live without resource restriction.

The Natural Step’s Resource Funnel is a well-known diagram used to illustrate this concept of finite resource availability. Imagine a funnel viewed from the side. The walls of this funnel represent declining resources and increased demand for those resources used to produce the goods and services we utilize every day. In order to reach sustainability, we need to determine how to balance the supply and demand of resources to create a sustainable future.

Taking strides to move toward more sustainable systems will move us all in a direction that will enable us to thrive as a collective society.

The Natural Step’s Resource Funnel.

Implementing sustainability into a business model is not just about making an impact on society and the planet. Following sustainable frameworks enhances the relations of all the stakeholders in an organization. Stakeholder value is a different concept than shareholder value. In short, shareholder value considers the interest of business shareholders first and foremost, whereas stakeholder value takes into consideration a broader base of parties that the business affects. These can include shareholders, nonprofits, suppliers, government agencies, customers, employees, and anyone else associated with an organization. According to Mark J. Epstein, author of Making Sustainability Work: Best Practices in Managing and Measuring Corporate Social, Environmental, and Economic Impacts, there are two types of stakeholders: core stakeholders and fringe stakeholders. In his book he states, “Core stakeholders are those that are visible and are able to impact corporate decisions due to their power or legitimacy. Fringe stakeholders, on the other hand, are disconnected from the company because they are remote, weak, or currently disinterested.”

Improving stakeholder relationships can have a profound impact on your bottom line. Having a better relationship with your customers enables you to understand what they want and how they want you to deliver your goods or services. Creating an open dialogue for discussion gives you an open door for engagement. This theory also holds true for government organizations and nonprofits. Creating a relationship with a non-profit previously seen as an adversary enables dialogue that encourages collaboration over conflict, and having an open dialogue with government gives you the ability to stay one step ahead of impending regulations. Thus you could save thousands of dollars by avoiding controversy and miscommunication. Enhancing the importance of employees as stakeholders improves the image of your organization and the morale of your workforce. If employees feel they are invested in your organization for more than just a paycheck, they are more inclined to work harder and remain loyal.

Going Green

According to Walker and Marr (2001), the evolution of stakeholder relationships contains four steps:

1. Awareness

2. Knowledge

3. Admiration

4. Action

Showing your stakeholders—customers, employees, and investors—that you’re fulfilling a commitment to the environment will produce a payoff that goes beyond the stock report and is sure to result in financial benefits over the long term. Your stakeholders will thank you for recognizing the importance of protecting the environment through your business practices.

The consensus is in: green is the hot new branding technique. It is more important than ever to back up your green story with a sustainability program that produces a credible back story and provable, verifiable data. Greenwashing—claiming you are greener than you actually are—is a term an increasing number of people are becoming familiar with (and more and more companies want to avoid).

Note

Conscious consumers purchase on the basis of environmental or social criteria. They often purchase products that have a reduced environmental impact and/or a positive social impact, and they support responsible companies.

According to BBMG, a New York–based marketing agency that brings conscious consumers together with forward-thinking brands, five values drive the conscious consumer:

More and more consumers are looking to identify with brands that they can feel good about—brands that can deliver a product and a feeling.

Implementing sustainability into your business model helps you develop a credible green story, increasing your brand value and your corporate image for both your internal and external messaging. After all, your employees can be your most trusted brand angels. Giving them the tools and resources to understand your sustainability initiatives enables them to tout your efforts in a transparent, credible manner. From blogs to social networks, let your employees spread the good word about the positive impact your company is making. We touch more on green marketing and branding in Part 5 of this book. Stay tuned!

Healthier employees make happier employees, and when employees feel good about their work, they are more inclined to give 110 percent each day. Embarking on a journey toward sustainability can make your organization stable in volatile economic times, giving employees a greater sense of job security. This reduces stress and nervousness, which in turn increases productivity. Increased productivity adds to financial gains, which in turn makes your company more stable. Are you beginning to see a trend here?

Talented workers are looking for more meaning from their everyday jobs. They want to be a part of something greater than the company they work for and contribute their productivity to a positive agenda. Outlining a clear vision for sustainability and a well-defined sustainability action plan serves as a magnet for dedicated, talented workers.

To reap the benefits of implementing a full sustainability program, all employees must be on board. Top company executives and management need to embrace and embody sustainability not only to set an example for all employees, but also to maintain integrity in their organizations. Espousing this commitment throughout your organization makes a world of difference in the outcome of your sustainability initiatives. After your organization is committed to the initiatives, open the lines of communication to all employees in your organization. This will strengthen all employee relations.