Are Companies Really Becoming Greener?

Two-thirds of respondents to the Acceleration of ECO-Operation survey said their companies do not have scorecards to measure supplier sustainability, and do not have goals of supplier carbon neutrality. However, the respondents know there is “tremendous value” in using a scoring system. Seventy-one percent plan to achieve carbon neutrality in four years or less, despite not having it as a goal.

The Business Performance Management (BPM) Forum created the Acceleration of ECO-Operation program with E2open and the Global Renewable Energy and Environmental Network (GREEN). The program’s website defines Acceleration of ECO-Operation as a “new management mantra aimed at bringing business gain to the value chain through enhanced trading partner visibility, flexibility and new levels of verifiable sustainability across the entire demand and supply ecosystem of global corporations.”

“The Acceleration of ECO-Operation initiatives provide comprehensive confirmation supporting our observation that companies with hundreds or thousands of global suppliers need to do a much better job at seeing and measuring the levels of environmental compliance and efficiencies down to the second and third-tier level of supplier,” said Rich Becks, senior vice president at E2open. “Supply chain executives understand the benefits of better managing collaboration and sustainability in the value chain – now they just have to make it happen.”

The majority of respondents (90 percent) to the survey claimed their company’s management follows the principles of ECO-Operation which are enhanced trading partner visibility, flexibility, and new levels of verifiable sustainability across the entire demand and supply ecosystem.

Almost two-thirds of the respondents said their company does not have adequate visibility across their supply and value chain, and 20 percent use a single hosted platform to improve their visibility. Only 38 percent link eco initiatives with operational efficiency to a high degree, and about half to some extent. Forty-two percent do not think their company’s carbon and energy footprint includes their entire extended supply chain, and 55 percent think their customers would agree.

Although 76 percent said their customers have not asked them to measure or reveal their carbon footprint, two-thirds expect them to demand it in the coming year. The majority (85 percent) are involved in new programs that will increase operational efficiency, CSR, and cost-savings throughout their supply and demand chains.

The top initiatives to achieve better ECO-Operation practices, according to the survey, are environmental responsibility, better sustainability compliance, more efficient product manufacturing, and better customer responsiveness.

The biggest drivers for change in supply and demand chain operations this year are:

• Pressure to be more environmentally responsible and sustainable
• Troubled economy creating need to “tighten the belt”
• More competitive, price-sensitive market for goods

The most frequent challenges in synchronizing supply chain operations are:

• No single, universally accessible solution for visibility across the value chain
• Partners unwilling or unable to provide necessary information
• Don’t have access and visibility into second or third tier trading partners

The top three areas of the value chain process most valuable to measure in terms of environmental sustainability and responsibility are:

• Transportation and fuel consumption
• Product and waste recycling
• Packaging materials and processes

“Today’s economic, social and regulatory dynamics are putting real pressures on global companies to be both lean and green in their product sourcing, logistics, distribution and operational practices,” said Donovan Neale-May, executive director of the BPM Forum. “Unifying and controlling complex, globally-distributed value networks in turbulent, unpredictable times requires real-time operational insights down to the product level, accurate sourcing and sell-through intelligence, and relentless dedication to eliminating waste in all areas of the go-to-market process.”

Consumers Think Green Products Cost More

The 2009 Green Brands Survey involved consumers in seven countries: the U.S. U.K., China, Brazil, India, Germany, and France). The survey, released in July, revealed that consumers from all seven countries think green products are costlier than non-green ones, but they plan to spend more on green products in the next year. The research, conducted by Penn, Schoen & Berland Associates (PSB) with Landor Associates and Cohn & Wolfe, plus Esty Environmental Partners, showed that consumers in the U.K., France, and Brazil think their country is “on the wrong track” concerning the environment. However, consumers in the U.S., Germany, China, and India think their country is “going in the right direction.”

The survey highlighted the differences between consumers in developed and developing countries, as the following two examples show:

• Consumers in the U.S. U.K., Germany, and France share similar environmental beliefs and behaviors, while consumers in Brazil, India, and China have different views from the consumers in Western countries.
• The majority of consumers in India and Brazil are more concerned about the environment than the economy, but the majority of consumers in the U.S. are more concerned about the economy.

“With the global climate change discussion focused on what the major new economic powerhouses like China, India, and Brazil are willing to do to control their emissions, those three countries stood out in our polling as more interested in buying from environmentally friendly companies and more willing to spend more on green products,” said Scott Siff, executive vice president of PSB. “From a political perspective, this turns the assumptions about those countries on their heads, and from a business perspective it says the market for green branding and green products may be even bigger than generally thought.”

Over two-thirds of consumers in all countries (77 percent) think it is important that companies be "green." India and China have the highest percentage of consumers who value a companies "green-ness" with 87 percent in India and 98 percent in China. Consumers from all countries think reducing the amount of toxic or dangerous substances in its products and business processes is the most important step a company can take to demonstrate it is green.

“While reducing toxics heads the list of consumer priorities the data also show that the public holds companies accountable for good environmental behavior across the board,” said Dan Esty, chairman of Esty Environmental Partners. “Consumers expect companies to recycle, use energy efficiently, reduce packaging, and pursue green innovation. So to gain loyalty, a company’s environmental strategy must be comprehensive.”

The television and internet are the main sources of information about environmental issues in all countries. Past experiences with products influence consumers the most in France, Germany, and India. Recommendations from friends are most influential for consumers in the U.S. and China. Consumers in the U.K. and Brazil are influenced the most by editorial. Consumers in all countries think intellectuals or activists are the most credible spokespeople for environmental change.

The survey asked participants to rate a number of brands, and the results produced the top ten greenest companies list for each country. The top ten greenest companies list for the U.S. is as follows:

1. Clorox Clean Works
2. Burt’s Bees
3. Tom’s of Maine
4. S.C. Johnson & Son
5. Toyota
6. P&G
7. Wal-Mart
8. Ikea
9. Disney
10. Dove

America Needs to Turn Green

Watch last week's MSNBC interview with the CEO of Green For All, the non-profit organization founded by Van Jones:

Visit msnbc.com for Breaking News, World News, and News about the Economy

Steps to Greening Your Office

Sustainable Industries recently published its Green Office Guide. The Guide could not come at a more oppurtune time. Paper usage is increasing about 20 percent a year. A typical office uses about 1.5 pounds of paper a year per person. Commuting to work makes up 20 percent of of all personal vehicle use, and 93 percent of Americans commute to work using their personal vehicles. About 30 percent of the energy used by U.S. buildings is done inefficiently. 

If you want to make your office space environmentally friendly, the Green Office Guide published by Sustainable Industries, suggests seven steps you can take.

1.  Start by creating a green team. Your green team should include personnel from company's management team and financial department. The purpose of the green team is to set goals and monitor progress. 
2.  After you have created a green team, the Guide suggests consulting with a professional. It can be hard to find a professional. Ask your city government if they offer free services to businesses who want to green their operations.
3.  Choose which measure to tackle first. 
4.  Consider what measure will give you the greatest improvements in environmental impact and operations costs.
5.  Set timely goals. The Guide recommends a plan that will reduce your company's energy consumption by six percent a year over the next three years.
6.  Get everyone in your company on board.
7.  Communicate your successes. 

Paper use

Here are a few ways to reduce paper use:

1. Set your office printers to print on both sides of paper. 

2. Print more on a piece of paper by setting the margins 1.25 inches to 1 inch. This will reduce paper use by up to eight percent.

3. Proofread before you print.

Commuting 

Encourage your employees to carpool by starting a rideshare match program. A rideshare match program helps potential carpoolers find each other.Consider pairing the rideshare match program with a cash benefit program.

Meetings

One way to make your company meetings more environmentally friendly is to do web-meetings whenever possible. If that is not possible then select a hotel from environmentallyfriendlyhotels.com. Make sure the hotel your choose is near public transportation. 

Facilities

There are some easy things you can do to make your office more energy efficient. Make sure lights are turned off in a room when no one is in there. Turn off all computers and computer equipment every night before leaving. Replace light bulbs with compact flourescent lights (CFLs).

Water efficiency is also important. Installing low-flow toilets and motion sensors for faucets will save water. 

Green Office Buildings Save Money, Make Money

A recently published report titled, Doing Well, Doing Good: An Analysis of the Financial Performance of Green Office Buildings in the USA by the Royal Institution of Chartered Surveyors (RICS) concluded that green buildings with Energy Star ratings generate premium rents. However, the report did not find that LEED-rated buildings generated premium rents. The report suggest that tenants and investors will pay for for an energy-efficient building, but not for one that is "advertised as sustainable in a broader sense."

The building sector accounts for about 40 percent of raw materials and energy consumption, and  for at least 30 percent of world greenhouse gas emissions. Constructed buildings use energy, and energy is 30 percent of office building expenses, "the single largest and most manageable operating expense in the provision of office space."

Green buildings result in an aggregate premium of three percent per square foot compared to identical (average) buildings. Effective rents, rents adjusted for building occupancy levels, result in rent premiums of over six percent. This implies, according to the report, that greening an existing building increases its value by "some $5.5 million."

Increasing energy efficiency by 10 percent is associated with a 0.2% increase in effective rent. This is in addition to the six percent rent premium. A $1 savings in energy costs from increased thermal efficiency results in about $18 worth of "increased valuation."

The report cites four economic benefits from investing in green buildings:

1.  Saves money spent on energy, water and waste disposal, insures against future energy price increases

2.  Improving indoor environmental quality may result in higher employee productivity

3.  A green corporate building might create a positive corporate image

4. Green buildings may have longer economic lives due to less depreciation and lower volatility in market value

Small Businesses Don't Have the Green to Go Green

Small businesses are taking small steps to become more environmentally friendly, according to the Small Business Index survey by Wells Fargo and Gallup. The majority said they are doing at least "everything that can be justified by cost.” However, 67 percent think their customers will not pay more for environmentally friendly goods and services. In April 2007, 49 percent thought customers would pay more. 

Only 37 percent of respondents actively show their green credentials to customers, down from 47 percent in April 2007. The number one reason for showing their green credentials was "as part of a personal commitment or responsibility." The second reason was for public relations purposes, and the third reason was attracting customers.

One-third of the respondents said the current economic situation affected their plans to become more environmentally friendly. Seventeen percent said their companies are doing "very little or nothing at all"to become environmentally friendly. 

There is good news. Over the last year, almost 90 percent participated in recycling, and over three-quarters (77 percent) switched to more environmentally friendly products. Thirty-two percent said they used some form of alternative transportation (other than a car).

Forty-five percent said they assessed how much energy their company uses. Sixty-eight percent switched to energy-saving appliances, light bulbs or vehicles. Forty-five percent percent believe specific actions can be taken by their company to improve environment.

The survey has been conducted for the last 23 quarters. The current survey was conducted on January 22-February 2. It was based on 604 small business owners across the U.S.

“Going green’ has been good for the environment, and even better for our bottom line,” said Marion Hook, owner of the Adobe Rose Inn, a bed and breakfast in Tucson, Arizona. “We know that the money we’ll save long-term by making even small changes, such as using cisterns, florescent light bulbs and solar tubes, will far outweigh the short-term costs. We also find that our guests appreciate our efforts, and happy guests lead to repeat customers. ‘Going green’ is a part of a long-term strategy, and it will help keep our business financially sound, now and in the future.”

“At Wells Fargo we recognize the importance of integrating environmental responsibility into business practices and procedures,” said Marc Bernstein, head of Wells Fargo’s Business Direct lending and Small Business Segment. “We know that the contributions of small business owners are a vital part of the overall success of the economy, and in much the same way, we know their contributions can make a real difference in the state of the environment.”

Recent surveys indicate customers will pay for green products

Recent surveys indicate that customers are willing to pay more for environmentally friendly products and services. A Forester survey said 18 percent of customers would pay more for environmentally products, and recent Carbon Trust research said customers think its important to buy from environmentally responsible companies. In a Yahoo survey, 77 percent described themselves as green, and 57 percent said they made a green purchase in the past six months. 

Four out of five respondents in an Opinion Research Survey said they are still buying green products and services despite the recession. In a 2009 Cone Consumer Environmental Survey, 34 percent said they are more likely to buy environmentally responsible products. Forty-four percent said their environmental shopping habits not changed much, and only eight percent said they are less likely to buy environmentally friendly products.

In a Consumer Electronics Association survey, 33 percent said they expect to make some type of green electronics purchage within next two years. Fifty-three percent said they would be willing to buy a television with green attributes, and 89 percent said energy efficiency would be a factor in choosing their next television.