Many businesses are finding that sustainability is worth more than just some good PR with the green crowd. Done properly, sustainable practices can be genuinely profitable — in the good old-fashioned bottom line sense.
Recently ICIS.com, a market intelligence journal for the chemical and energy industries, published the findings of research done among ICIS Chemical Business readers, “carried out in association with U.S. bio-based technology developer Genomatica,” updating a 2009 version of the same research to track changes in attitudes towards sustainability over three years.
The survey found that in pretty much all categories across the board, sustainability “has become more deeply entrenched than ever,” and is even considered a good way to reduce costs.
According to the survey, which studied more than 700 respondents, 54 percent of the chemical companies included in the study has a sustainability strategy or policy in place, 17 percent have a policy “in development,” and 17 percent say they’ll get cracking on it in a couple years. Only 12 percent said they have no sustainability policy and no real interest in one.
Improving Manufacturing Processes Is “Key”
“The key initiative over the past five years has been to improve manufacturing processes,” the survey found, “especially with respect to reducing energy and waste. This was mentioned by no less than 75 percent of the respondents.”
In fact, when even defining “sustainability,” “energy and waste in internal manufacturing processes were by far the most important” consideration, as they were cited by 71 percent as “very important.” The environmental qualities of end products, which many probably consider the sole important consideration in sustainability, was cited by 63 percent of the survey’s respondents.
It used to be that making chemical and energy products “green” was regarded as a nuisance, adding costs which had to be passed on to customers. Not anymore. “Companies now are looking for cost savings, improved raw materials supply and reduced carbon footprint, and are clearly seeking to use sustainability in their product design and marketing.” And more and more customers are asking more and more questions about sustainability.
Christophe Schilling, CEO of Genomatica, says the survey shows that sustainability is established as “part of the mainstream of thinking and action for both chemical producers and chemical users.”
The OECD’s Sustainability Guidelines
Recently, we reported that The Organization for Economic Cooperation and Development has published a good summation of some of the best practices for sustainability in manufacturing, identifying three areas where sustainable manufacturing best practices have been successfully implemented: Reducing inputs for production, improving the efficiency of facility operations and improving products to reduce impact in use and at the end of life.
Reducing Inputs For Production
Find ways to reduce non-sustainable materials during production, you’re on the way to the goal of sustainable production. The OECD primer gives the example of Isothane, a modest-sized British manufacturer of products used for insulating buildings, providing buoyancy for boats, protecting bridges and reinforcing roads.
Isothane reduced its solvent use from “165 U.S. tons of three types of flammable solvent to just 24 U.S. tons a year of only one type of non-flammable solvent.” Given that the only real cost was for the R&D involved, OECD officials say the company estimates savings of about $400,000 from not having to upgrade the electrical equipment in the factory and warehouses to comply with the legislated flameproof standards.
Improving Facility Operations
Just simple efficiency can save thousands. Calstone, an Ontario-based family-owned company designing and making metal furniture products, looked for ways to reduce the environmental impact of their manufacturing plant. They found a lot of relatively small improvements that added up to big savings.
A vapour spray system reduced harmful emissions by decreasing the chemicals used for degreasing metal components — “chemical use has since been reduced by 60 percent compared to 2005 levels,” company officials said. Rainwater is collected to use for flushing toilets, and a (separate) tank of rainwater was installed to reuse rainwater for cooling equipment, “significantly reducing” water usage. A heat exchanger was made from an old car radiator and automatic heat control units, and the company hung large pieces of polystyrene foam from the plant’s ceiling to cut down on how much space needed to be heated.
Nothing spectacular, just a lot of small improvements. The savings are there if you look for them. And you don’t even need to call it “sustainability.” You can call it “efficiency.”
Improving Products to Reduce Impact
Henkel, the German producer of such global brands as Somat, Right Guard, and Pritt, studied ways to reduce the environmental impact of their products during usage. They discovered that part of the lifecycle impact of their products “comes from the use of energy required to heat water and run a laundry or dishwasher and the use of water.” So they found a new dishwasher detergent that works at 104 degrees Fahrenheit, as opposed to 122-131 degrees. They improved a spray valve to reduce spray losses of a deodorant by 20 percent, and reconfigured the housing of a correction roller to consist almost 90 percent of plastic made from plants.
Efficiency, Marketing, Good Citizenship – Not Greenwashing
There’s no public relations downside to letting it be known your company’s committed to increasing its sustainability in its manufacturing and supply chain. Of course it never hurts your image to be a good corporate citizen, but the survey found that promotion and marketing, as well as energy efficiency, are also high on a sustainability agenda.
We’re not talking about greenwashing here, the practice of trumpeting loudly “green” or “sustainable” products that are, in reality, just barely greener or more sustainable than the ones they replaced. We’re talking about genuine commitments to trying to find more sustainable practices and policies in all aspects of the company’s operations.
Greenwashing is trying to cash in on the impulse some people have to support only eco-friendly products by presenting your product in such a way that is appears quite eco-friendly, even though in reality it probably isn’t. What we’re talking about here are the genuine sustainability efficiencies in manufacturing you can find.
Energy efficiency is a big area of immediate benefit for sustainability, which is why 71 percent cited it as “very important.” “Promotion and marketing of sustainable products” was the most common business priority for sustainability mentioned by 26 percent of the survey’s respondents, making it the most commonly-given response. Another 23 percent said they want to “take an active lead in sustainability issues.”
Other interesting findings excerpted from the report on the study:
- In both 2012 and 2009, 57 percent of survey respondents said that their company should be reducing its exposure to petroleum-based commodity markets.
- In 2012, “improving health and safety performance” was cited as an important part of sustainability by 63 percent of respondents, more than tripling the 20 percent who said so in 2009.
- In 2012, 72 percent of respondents said their customers had expressed interest in sustainably-produced chemicals. In 2009 only 57 percent reported customer interest in how sustainable a manufacturer’s production was.
- Fully 70 percent of chemical manufacturers require information from suppliers on the sustainability of their products. About 40 percent engage with suppliers jointly to help improve sustainability. Around 30 percent include sustainability on supplier scorecard ratings. Measurable sustainability requirements for suppliers are used by 28% of manufacturers, and 20 percent said yes, they would drop suppliers that don’t meet sustainability criteria.