Cost Benefit Analysis of Sustainable Business

Many business owners fear the costs associated with going green and although the net return varies according to the sector, in most cases these fears are unwarranted.

Sustainable business practices should be evaluated based on a cost/benefit analysis. The benefits for things like brand reputation and employee loyalty, must be weighed against the costs and risks.

When considering the value of sustainable practices businesses need to be apprized of a wide range of benefits. The value of practices like energy conservation and resource efficiency are well known but there are other less prominent rewards.

Human resources is a good example of a department that benefits from greener practices. Greening a physical environment contributes to health and reduces sick days. According to The Harvard Business Review's summary of a number of green building studies, green facilities have been shown to increase the productivity of employees. Research further reveals that retailers who installed skylights saved energy and boosted sales by as much as 40 percent. Other research has indicated that loyalty and morale are positively impacted by a green workplace.

The Harvard Business Review summary also found that employees want the companies they work for to go green and a 2007 MonsterTRACK.com study revealed that people want to work for a company that is green. These factors enable green companies to attract and retain the best people, while saving human resources time and money.

Green initiatives can save money, stengthen employee loyalty, enhance a companies reputation and increase productivity.

Businesses that invest in green initiatives improve their bottom line while businesses that ignore climate change are doomed to incur much greater costs down the road. A cost benefit assessment of many sustainable initiatives reveals the merit of being greener.

© 2011, Richard Matthews. All rights reserved.

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New Types of Insurance Reduce Risk and Accelerate the Adoption of Green Energy

Insurance companies are finding that there is money to be made in green technology. In response to growing demand, new types of policies are emerging that provide protection for businesses involved in the green economy.

Some insurance companies are backstopping warranties on solar panels, or protecting against lulls in the wind needed to drive turbines. This is helpful to start-ups whose customers can rely on guaranteed performance. These types of policies can also help to make project financiers feel more secure. The number of companies offering warranty insurance policies is growing quickly, from only a few a year ago, to approximately 12 companies today.

Some property insurance rebuilds a structure in a more environmentally friendly and energy-efficient way in the event of loss. Other policies are geared to cover the activities of carbon traders.

Green policies support modernization by encouraging the development of new technology and enhancing innovation. The research conducted by the insurance companies who underwrite these policies helps the market to better understand itself. This information can prove helpful in very practical ways, for example some insurers are advising clients on issues like solar panel installation.

The green insurance industry can expect meteoric growth in the next five years, particularly as the government introduces green energy mandates.

These new policies respond to the needs of companies who are investing in green technology and looking for ways to shield themselves from risk. By assessing, quantifying and spreading risk, these policies have an important role to play accelerating the adoption of green energy.

© 2011, Richard Matthews. All rights reserved.

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PV America 2011

A Greener Insurance Company

Stewart Title is an insurance company that is engaging initiatives that are beneficial to the environment. Stewart Title Guaranty Co. and Stewart Title Company are wholly owned subsidiaries of Stewart Information Services Corp. (NYSE-STC), a customer-driven, technology-enabled, strategically competitive, real estate information, title insurance and transaction management company. Stewart Title was established in 1893 and has its headquarters in Houston, Texas.

Stewart's green initiatives are part of their strategy for the future. Their steady growth provided a financial position that allowed them to continue innovating and spending on key initiatives during the downturn.

Stewart is reducing the impact the industry has on the environment by playing a leading role in moving the insurance industry in a greener, more paperless direction. They were the first title insurance company to launch a green initiative combining paperless processes with environmentally friendly offices.

Tools like Stewart Online, LenderExpressQuote, SureClose for real estate brokers, the eClosingRoom and electronic signature provide real time information and enhanced customer experience.

© 2011, Richard Matthews. All rights reserved.

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HP's Sustainable Innovation Serves the Planet and Profits

Hewlett-Packard (HP) proves that sustainability efforts can be a win-win proposition that is good for the environment and also good for the bottom line. HP has a long history of ‘doing the right thing’ that dates back to 1957. The company is the largest technology company in the world and it wholly integrates environmental considerations into its business strategy. The company sees sustainability as an integral part of the way business is conducted.

As reported in The Green Economy Post, HP is focused on minimizing environmental impacts and promoting the welfare and safety of employees and customers. For decades HP has worked to manage its environmental impact by adopting environmentally responsible practices in product development, operations and supply chain.

Frances Edmonds, the Director of Environmental Programs for HP Canada outlined how HP’s environmental commitment has led to greater profitability. She said, to be sustainable companies must have "a vision to reduce waste coupled with encouragement for employees to find innovative solutions for the uncertain journey that lies ahead."

Accounting for 2% of the world’s carbon emissions, the ICT sector (information and communication technology) has a very heavy footprint. According to Edmonds the information technology sector can reduce its own footprint and offer solutions to the world’s carbon problem. Edmonds was quick to include the fact that HP is firmly focused on playing a key role in finding and implementing these solutions.

Edmonds reviewed some simple yet innovative sustainable solutions including restricting an employee’s ability to book travel to other offices teleconferencing technology is available. HP has also shown leadership in responsible recycling of old technology and print supplies through its Planet Partners program which is active in over 50 countries.

HP's inkjet recycling program is a good illustration of the company's sustainable initiatives. The program was introduced in 2005, it achieved resource reduction through recycling that saves HP money and builds a stronger relationship with valuable supply chain partners like Staples.

HP's life cycle analysis (LCA) of the recycled inkjet cartridges prove the benefits of the company's recycling efforts. Between 2005 and 2010 recycling reduced the carbon footprint of the inkjet cartridges by 22 percent, cut fossil fuel use in half and reduced water use by 69 percent. Despite these impressive results, HP continues to improve. Carbon reductions are now 33 percent better than in 2005, fossil fuel use has been cut by 62 percent and the water savings have increased to 89 percent.

Edmonds highlighted HP’s management structure which encourages innovation and supports ‘doing the right thing.’ She also mentioned the company's reliance on Integrated principles of Extended Producer Responsibility which imply that HP accepts external responsibility for their products. Finally she stressed the importance of employee engagement programs that both explain issues and support them as they innovate.

HP is committed to sustainability because it knows that this approach results in better products, while increasing profits and decreasing environmental impact. For HP sustainability is a powerful competitive advantage.

To see Helwett Packard's document Sustainability as a Competitive Advantage, click here.

© 2011, Richard Matthews. All rights reserved.

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PUMA's Sustainable Packaging Innovation

In 2010 PUMA launched its innovative packaging solution known as the “clever little bag”, conceived in partnership with Yves Béhar. The company says new packaging initiatives will reduce cardboard use by 65 percent. Less packaging materials, means less use of water and energy to produce. This innovative solution reduces carbon emissions by 10,000 tons per year.

The Clever Little Bag has integrated the features of a traditional cardboard shoebox into a re-usable shoe bag. Reducing raw materials and the resources needed to make them.

PUMA will reduce water, energy and diesel consumption on the manufacturing level by more than 60% per year. This translates to saving approximately 8,500 tons of paper, 20 million Megajoules of electricity, 1 million litres less of fuel oil used and 1 million litres of water saved.

The Clever Little Bag also saves emissions and costs in shipping. Because it is smaller and lighter the Clever Little Bag provides reductions in transportation related emissions while reducing diesel fuel requirements by half a million litres.

The replacement of traditional shopping bags with the Clever Little Bag can save up to 275 tons of plastic. PUMA's apparel will be bagged in sustainable biodegradable materials replacing traditional polyethylene bags. This means that 720 tons of polyethylene bags can be avoided per year, which equals a saving of 29 million plastic bags and saves 192 tons of plastic. Replacing paper bags will save 293 tons of paper annually. All of PUMA's packaging materials used will be fully sustainable by 2015.

© 2011, Richard Matthews. All rights reserved.

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PUMA's Comprehensive Sustainable Strategy Now Includes Environmental Accounting

PUMA's efforts to improve social, labor and environmental standards throughout its operations date back to 1999. Since then the company has continuously incorporated environmental standards and practices to reduce its impact on the planet,

According to Jochen Zeitz, Chairman and CEO of PUMA, the companies mission is, “ to be the most desirable and sustainable Sportlifestyle company in the world.” To help with this mission the athletic apparel manufacturer identified opportunities to further manage the company's footprint using E-KPIs (Environmental Key Performance Indicators).

In 2010 PUMA launched another phase of the puma.safe initiatives and long-term sustainability program. It includes a set of ambitious targets. The company announced that it is reducing carbon, energy, water, and waste by 25 percent. PUMA also said that it will produce half of its international product collections in footwear, apparel and accessories according to best practice sustainability standards by 2015.

The athletic apparel manufacturer is cutting paper use by 75 percent and offsetting the remaining paper usage through tree planting initiatives. Through more efficient product transport solutions by logistic partners, the company will reduce CO2 by 25 percent. PUMA is also greening its supply chain by collaborating with strategic suppliers and logistic service providers to offset their own footprints.

Additionally, 50 percent of PUMA’s international collections will be manufactured according to the PUMA S-Index standard by 2015. This involves using sustainable materials such as organic cotton, Cotton Made in Africa or recycled polyester as well as applying best practice production processes.

To monitor these objectives the sports and lifestyle brand is also establishing an external Advisory Board of experts in sustainability to consult on the company’s mission and audit their sustainability program.

PUMA joined the UN Climate Neutral Network and has the industry’s first carbon neutral head office — the PUMA Vision Headquarters in Herzogenaurach, Germany.

Now Puma is producing the first-ever Environmental Profit and Loss (EP&L) statement. The company's new method of accounting will allow it to produce a new type of integrated reporting. The EP&L statement will attempt to measure the full economic impact of the brand on ecological systems including water and air. Puma commissioned Trucost and PwC to assist in developing the EP&L methodology.

The EP&L project is part of a larger environmental initiative by Puma’s parent company PPR Group, whose other brands include Gucci, Yves Saint Laurent and Stella McCartney. The group is also launching a “creative sustainability lab” in consultation with Cradle-to-Cradle, which PPR says will foster a new approach to product and business development. In this new approach, products and services will move beyond typical measures of quality--cost, performance and aesthetics--to integrate and apply additional objectives addressing environmental and social concerns.

The group said the overarching program, dubbed PPR Home, will go beyond the traditional Corporate Social Responsibility model and set a new standard in sustainability and business practice in the Luxury, Sport & Lifestyle and Retail sectors.

PBR bought carbon credits from Wildlife Works Reduced Emissions from Deforestation and Degradation (REDD) offsetting project in Kenya. The group has offset 98,729 tons of global CO2 emissions in 2010 for its Luxury group. Further, the Puma brand and PPR’s headquarters are both committed to carbon neutrality.

© 2011, Richard Matthews. All rights reserved.

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Xerox's Green Innovation

Sustainable innovation is key to Xerox's strategy. The company is putting green innovation to work for profit and the planet. For Xerox sustainability and profitability are mutually reinforcing goals for themselves and their customers.

Xerox Corporation is a $22 billion global enterprise for business process and document management. The 136,000 people of Xerox serve clients in more than 160 countries. Through its broad portfolio of technology and services, Xerox provides leading-edge document technology, services, software and supplies for graphic communication and office printing environments of all sizes. ACS, a company which Xerox acquired in February 2010, offers extensive business process outsourcing and IT outsourcing services.

The photocopying giant has also partnered with The Nature Conservancy to promote sustainable forestry, preserve biodiversity and help minimize forest loss and degradation that contributes to greenhouse gas emissions.

Xerox has been a leader for decades, as a mature company they now claim that green is part of their DNA. The company has maintained a business strategy focused on sustainable innovation. Xerox pioneered two-sided copying, print-on-demand, recycled paper and toner cartridges. More recently Xerox developed managed print services that enable customers to achieve their goals of reducing paper and energy usage, while boosting productivity.

The company claims that sustainability is a business fundamental, embedded in their operations and technologies, written into supplier specifications and creating economic value for their customers. They approach sustainability from a life cycle perspective because they recognize that the biggest opportunity to make an impact is by addressing all aspects of their actions, products and services.

Xerox’s innovative solid ink technology enables customers to cut costs and reduce their environmental impact. According to company, their ColorQube™ multifunction printer generates 90 percent less supplies waste, uses 9 percent less life cycle energy and produces 10 percent fewer greenhouse gases than comparable laser devices. Compared with conventional systems, it saves water, and is easier to recycle.

Xerox created the industry’s first Sustainability Calculator to help customers develop a fact-based estimate of their print-related environmental footprint. It enables customers to pinpoint opportunities to reduce both their environmental impact and their costs. They also help customers move from paper to digital documents with innovative business process and document management solutions

On April 7, 2011 Xerox Canada celebrated the achievement of reaching 1,500 patents. U.S. Patent 7,875,411 – XRCC’s 1,500th patent is part of the patent portfolio that covers long life photoreceptor technologies, a key area for increasing the sustainability attributes of Xerox’s laser printers and related products. The Xerox Research Centre Canada is responsible for developing the armour technology that almost doubles the life of photoreceptors - multi-layer thin film devices that convert light into electrostatic images.

“This technology has enabled a 30 percent reduction in waste, less down time and disruption to work flow, improved productivity, and fewer service calls,” says Yonn Rasmussen, vice president of the Xerographic Component Systems Group.

Investment in innovation can provide lucrative returns. Xerox discovered that their innovations have ended up either saving their customers and Xerox money or creating new markets and new profits.

See Xerox's environmental initiatives related to Solid ink technology and ColorQube. The company also has a sustainability Kit (PDF).

For more information, visit Xerox, or for investor information, click here.

© 2011, Richard Matthews. All rights reserved.