Greening Your Business

1. Greening Your Business Will O’Brien Executive-in-Residence, Clark University Director, Worcester Sustainable Business Leader Program Email: wobrien@clarku.edu | Cell: 978-793-1635

2. Reference Daniel Sitarz, (October 2008) Greening Your Business: The Hands-on Guide to Creating a Successful and Sustainable Business, Earthpress, Carbondale, IL ISBN-10: 1892949466

3. Table of Contents • Introduction • Business Strategy • Sustainability Planning • Fostering Sustainable Behavior • Energy Efficiency • Waste Management • Green IT • Green Supply Chain Management • Entrepreneurship & Innovation • Green Marketing • Conclusion

4. Introduction: Four Basic Premises: • Human civilization faces an array of profound environmental problems that have already begun to negatively affect the foundations of life on this planet. • Business is the only force on earth with enough reach to confront and correct the most serious environmental problems that face humanity. • Every single business in the world has both the ability and the opportunity to thrive and prosper by becoming more sustainable in every phase of its operations. • Creating a green and sustainable business is a daunting task, but the steps to doing so can be both straightforward and understandable to anyone.

5. Business Strategy: Why go green? Doing well by doing good

6. Cost Savings • Why are we in business? • How do we reduce our costs of running a business? • The “myth” of the Environmental Premium • “Going green” = “growing green” i.e. money!

7. Employees • Employees will be motivated • They will work harder • They will be more productive • Attract employees who want to work for you • Less turn over • Better products & services • Workplace becomes a safe, clean place

8. Competitive Advantage By going green, you can… • Operate more efficiently than competitors • Offer products that are superior in quality • Better cater to customer needs • Lower health insurance premiums • Gain the trust of investors

9. Business Strategy: Calculating Cost Savings The proof is in the numbers

10. Payback Analysis # years required for improvement to pay for itself is equal to: Total initial cost of the improvement First year cost savings produced by improvement Example: We want to replace 100 old incandescent bulbs with 100 new fluorescent bulbs

11. Payback Analysis Incandescent Bulb Fluorescent Bulb • 1 incandescent bulb = 100 watts • On 18 hours a day/260 days a year • Uses 468 kWh energy (100 x 18 x 260) • 10 cents per kWH= $47 a year per bulb. • For 100 bulbs, this is $470 annually. • 1 fluorescent bulb = 20 watts • On 18 hours a day/260 days a year • Uses 94 kWH energy (20 x 18 x 260) • 10 cents per kWh = $9.40 a year per bulb. • For 100 bulbs, this is $94 annually.

12. Payback Analysis • 100 new compact fluorescent bulbs @ $5 a bulb costs $500. • $470 - $94 = $376 first year cost savings Total initial cost of the improvement First year cost savings produced by improvement $500 $376 = 1.33 Years Payback

13. Return on Investment Return on Investment (ROI) = Net return* Capital cost of investment *Net Return = Net annual savings x life of investment

14. Return on Investment Using the same example… Assume 10 years of life for fluorescent bulbs Net annual savings: $376 $376 x 10 = $3,260 net return Recall that 100 fluorescent bulbs costs $500

15. Return on Investment Return on Investment = Net return Capital cost of investment $3,260 $500 = 652% ROI over 10 years

16. Sustainability Planning:How to Green Your Business A business’s guide to going green

17. Sustainability Planning: Introduction • Every business should have a sustainability plan • Plan is the “go to” source for a company’s stance on environmental issues • Defines clear employee responsibilities • Sets clear, measurable goals • Details how to achieve goals

18. Sustainability Planning: 5 Steps • Develop a Company Environmental Policy Statement • Determine Employee Responsibilities • Prepare the Green Plan • Implement your Green Plan • Communicate Efforts

19. Develop a Company Environmental Policy Statement • Shows stakeholders that environmental issues are important to your company • Keep it simple: • No longer than one page. • Make it clear and easy to read and understand, since it is meant for everyone to see. • It should be realistic, achievable and relevant to a company’s activities and practices. • It should have top-level support (i.e., endorsement from managing director, president, chief executive or other).

20. Example Company Environmental Policy Statement: Walmart “At Walmart, we know that being an efficient and profitable business and being a good steward of the environment are goals that can work together. Our broad environmental goals at Walmart are simple and straightforward: • To be supplied 100 percent by renewable energy; • To create zero waste; • To sell products that sustain people and the environment.”

21. Determine Employee Responsibilities • Assign particular roles and responsibilities to attain company’s environmental goals • Clear definition = better employee accountability & support • Some work that employees may be assigned to do: • Collecting information for various environmental assessments of the business, such as energy use, water use, waste disposal, etc. • Preparation of various worksheets and process maps regarding your business plan. • Participating in training or education efforts to understand any new policies. • Implementation of any of the changes that your company environmental plan requires. • Communicating your new environmental commitment to customers and the public.

22. Prepare the Green Plan • Choose which areas of your business you plan to assess: i.e. lighting, waste, green IT, etc. • Carry out assessment/audit • Review results of assessment • Determine if action is necessary, and if it is, outline the necessary steps to solve the problem. • Compile all additional information/paperwork • Set meaningful, manageable goals/targets

23. Implement your Green Plan • Follow the outline you created for each of your target areas • Monitor progress towards goals • Document everything • Gather employee feedback • Review goals & employee accountability periodically

24. Communicate Efforts • Share your successes! • Be open and honest about your failures, and make suggestions about how you will fix or improve upon them in the future. • Reap the rewards of a better public image: more customers, more investors, and jealous competitors.

25. Fostering Sustainable Behavior: Making Sustainability the Business of your Business Success is a business-wide effort

26. Fostering Sustainable Behavior • Sustainable behavior can start off strong…and then taper off. • Sustainable behavior only long lasting if: • Employees motivated and involved • Top management is on board • It becomes a part of corporate culture, so that rules and regulations are in place, i.e. environmental management system • Want to create a culture of: “this is how we do things here.”

27. Fostering Sustainable Behavior • Motivating Employees: • Build awareness of the company’s sustainable development commitments and performance • Incorporate sustainable development in performance evaluation, compensation, personal development plans • Create partnerships with NGOs and local communities • Motivating Top Management: • Provide tangible, cost-benefit analysis of improvements • Incorporate sustainable development in performance evaluation, compensation, personal development plans!

28. Fostering Sustainable Behavior • Environmental Management Systems: a formal set of policies that defines how a company will evaluate, manage, and track its overall environmental impacts. • The presence of an EMS can have a variety of benefits, such as: • Improved environmental performance • Better regulatory compliance • Certification and recognition (IS0 140001)

29. Fostering Sustainable Behavior Five Key Elements in an EMS

30. Energy Efficiency: How to reduce Energy Costs The sweetest of the low-hanging fruits

31. Vietnam’s Energy Use • Electricity counts for 35% of all energy demands. • In 1998, industry accounted for 1/3 of final energy use. • In 2007, it accounted for 46 %. • Electricity use by electrical appliances accounted for 39% of total electricity use in Vietnam in 2007. • In 2009, Vietnam… • Exported 535 million kWh. • Imported 3.85 billion kWh. • Vietnam’s consumers currently pay some US$14–15 billion per year for energy!

32. Commercial Energy use in Vietnam

33. Industrial Energy use in Vietnam

34. Energy Efficiency • Lighting is a critical component of every small business and can be a source of immediate savings. • The Electric Power Research Institute estimates that an aggressive drive to reduce energy costs can reduce electricity use by up to 25 to 45%. • The quest for energy efficiency entails a careful look at two main areas: • Examine how your business uses energy and investigate every possible way to reduce or eliminate that use of purchased energy. • Look closely at any possible way to replace that purchased energy with renewable energy sources.

35. Energy Efficiency: What’s using it? • Lighting is the biggest expense for retailers, at about 37% of total energy use. • Retail businesses spend nearly $20 billion on energy each year. • A 10% reduction in energy costs for the average retailer can boost net profit margins by nearly 2% and sales per square foot by $25. • Office businesses attribute 16% of their energy use to office equipment – more towards equipment to cool it. • It is estimate that 42% of all lodging energy is used towards the heating of water, water which could otherwise be heated by thermal solar systems rather than electricity.

36. Energy Efficiency: Lighting • Highest returns are usually on lighting • Always upgrade your lighting first • Improved lighting = improved productivity • Lighting also the easiest change to make: • Switch from incandescent to fluorescent bulbs • Use timers/dimmers/motion sensors

37. Energy Efficiency: HVAC • Heating, Ventilation and Air Conditioning account for 40% of electricity used in commercial buildings • Benefit from upgrades and building improvements • But also benefit from cleaning. • Remove need for HVAC by using awnings, shades, trees, etc.

38. Energy Efficiency Plan • Conduct a comprehensive energy use assessment of your business operations • Create a strategy to eliminate problems • Evaluate energy efficiency actions on an economic basis • Implement the plan

39. Waste Management: reducing your waste-related costs Waste is money

40. Waste Management • The current lifestyle that the developed world leads is not sustainable. • The average North American consumes 10 times as much as the average person living in China. • 30 times as much as the person living in India. • Across the globe, only 7% of materials consumed actually become saleable products, 93% is waste. • 99% becomes waste within six weeks. • Vietnam produces over 15 million tons of waste each year. • Urban areas produce 60% of this waste, but have only 24% of Vietnam’s population!

41. Waste Management • Waste is money lost: • Every single thing that your company disposes of, from used packaging, to trimmings, to waste oil, to smoke stack emissions, to plant effluents – were all initially purchased. • When purchased materials become waste, you are throwing away money. • Waste is money gained: • Turn waste from an expense item into an income item

42. Waste Management: Priorities

43. Waste Management: How to Reduce Waste at the Source • Are you are overproducing? • Are you keeping unnecessary inventory? • Are you controlling for product quality and defects? • Are you over-processing materials? • Is there excessive waiting?

44. Waste Management Plan • Conduct a comprehensive waste assessment of your business operations • Create a strategy to eliminate problems • Evaluate waste management actions on an economic basis • Implement the plan

45. Green IT: Reducing IT Costs A growing problem with easy solutions

46. Green IT: The Facts • By 2008, over 1 billion computers have been put into use around the world. • Due to rapid expansion in computer use in China, that amount is expected to double by 2015. • A generation ago, a six person office might have used 600 watts of power. • Today, a similar size office has a connected load of over 7,000 watts of power. • According to a recent UN report, the amount of fossil fuels necessary to manufacture one desktop computer is over 500 pounds. • This is over ten times the weight of the computer itself. • Many harmful chemicals, like lead, go into the computer.

47. Green IT: The Burden of Computers • Computers not designed to be biodegradable at the end of their lifespan • A computer is used on average for 3 years before it is replaced • In 10 years that’s 3 computers. • That’s 3 billion computers being disposed of every 10 years worldwide, releasing lead, mercury, cadmium, and chromium into the soil. • Instead of buying new computers: focus on upgrading computers!

48. Green IT: The Burden of Behavior • Technology isn’t inherently bad; our behavior is. • Changing behavior is very difficult. • The changes we make, however, can be very small: • Turn computer off at the end of the day • Make double-sided copies • Use low-power management modes • Run data centers 4-8 degrees higher • Discourage screensaver use • Buy energy efficient electronics • Switch to laptops

49. Green IT Conservation Plan • Conduct a comprehensive computer & electronics of your business operations • Inventory your current electronics and computer equipment • Create a strategy to eliminate problems • Evaluate strategy on an economic basis • Implement the plan

50. Green Supply Chain Management: Making Your Supply Chain Sustainable Because every business is also a customer