How Manufacturers Can Maximize Environmental Sustainability
Private corporations can — and should — take the lead in helping the US achieve its emissions reductions goals under the Paris climate agreement, writes Tensie Whelan, director of the Center for Sustainable Business at NYU Stern School of Business, in a Fortune column.
Companies produce the vast majority of products and services that emit carbon, at every point in their lifecycle: from manufacturing processes and transport, to consumer use and end-of-life disposal.
“Firms that place sustainability at the core of their business strategy will drive positive climate performance, create wealth while creating competitive advantage, reduce risk and create stable ecosystems that drive both ecological and corporate value,” Whelan writes.
Several corporations are already doing this, employing sustainability strategies that are also saving money and driving sales.
Unilever, for example, has set a goal to halve the environmental footprint of the making and use of its products by 2020. In an earlier interview with Environmental Leader, a spokesperson said about 50 percent of its growth in 2014 came from its “sustainable living brands,” which also grew at twice the rate of the rest of the business.
Similarly, General Electric’s GE’s Ecomagination line of products and services has generated more than $200 billion in revenues since GE started the program 10 years ago. Revenue from Ecomagination products totaled $34 billion in 2014, representing about 30 percent of total GE sales, the company says.
Another example is jet engine manufacturer Pratt & Whitney. In an interview with Environmental Leader, Mary Anne Cannon, VP of environmental health and safety, said despite doubling its jet engine production over the next five to 10 years, Pratt & Whitney is not normalizing its 2025 sustainability goals. These include reducing greenhouse gas emissions and water consumption by 80 percent compared to 2000 levels, as well as leaving zero landfill waste.
To date, P&W has cut emissions by 36 percent, water use by 72 percent and saved about 1 billion gallons of water from its manufacturing processes. It also recycles 61 percent of its waste. And all of these sustainability improvement have resulted in financial savings, Cannon says.
“There’s always a business case,” Cannon says. “We’ve invested around $60 million in all of our environmental projects. On average the payback is two to five years.”
While P&W, along with GE and Unilever are major corporations, even small manufacturers can take steps to maximize sustainability, maintain compliance and leave a smaller environmental footprint.
But where do you start? “Closing the loop is a big one,” Cannon says. P&W recycles its water for use in manufacturing processes, which also saves money on utility bills. In addition, the company collects its waste metal used to make jet engines, remelts it and then reuses it.
Cannon says another important consideration when working to reduce water use is process change, where water can be conserved and used more efficiently. Fix leaks. Also look at restrooms: automatic shutoff faucets, low-flow toilets and shower heads can be a source of savings. “Look at your water bill,” Cannon says. “Follow where the money is going. Where is water being consumed? In employee showers? Manufacturing water processes?”
Improving lighting efficiency by installing LEDs, as well as automatic timers to turn off lights at night, are cost-effective ways to cut emissions and save money on electricity bills. At a sustainable manufacturing forum P&W held for its suppliers last week, Cannon says one supplier said it only took 6 months to see a return on investment for re-lighting his shop.
“One of our buildings put reflective film on the windows to help with heating and cooling,” Cannon says. “The payback was 6 months.”
Minimizing packaging, and investing in reusable packing, can be simple ways to reduce waste while saving money on shipping costs.
P&W has also reduced waste through its “paper revert process,” in which waste paper is shredded and compressed into bales before being picked up Rand Whitney, which processes the paper. The reverted material is then sent to SCA Tissue of North American where it is turned into recycled paper products and returned to P&W. The company recycled 30,000 pounds of paper each month through this process and saves 64,000 gallons of water annually.
While Cannon won’t say how much money paper reverting and other environmental initiatives save P&W, “we always do a business-case analysis and ask does it make financial sense for the company,” she says. “The payback is always good. And the other benefit — aside from environmental — there are quality improvements.”
Cannon says one supplier found employee absenteeism improved after energy efficient lights were installed. “Not just my electric bill went down, but my employees were happier and more productive, and the quality of my product went up as well.”
Last week We Mean Business released a report that found national climate plans under the Paris agreement represent a more than $13.5 trillion market through 2030. Additional business benefits to companies that act on climate change include compliance with future climate and energy regulation, first-mover advantages in low-carbon markets, more resilient operations and supply chains, and stronger reputations.
Corporations can take steps to shrink their carbon footprint and the ones that are already doing this are seeing the benefits to their business and the environment.
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