A Guide to Implementing Sustainable Operations

argaiv1330

to Deliver Substantial Cost Savings

and Environmental and Social Improvements

Premise

Through passive awareness, active education, continual networking and confident persuasion you can suggest, implement, monitor and market new technologies and process changes which promote more sustainable operations and enhance your company’s triple bottom line. 

OUTLINE

What is Sustainability and Sustainable Operations

Developed 20 years ago my operating mantra continues to be

In Business, as in Nature, All Wastes are Assets in Disguise

In every business assets are brought into the company in the form of people (human resources), production materials, vehicles, fuel, equipment, food, utilities, and natural and synthetic resources. These assets are recorded, in one way or another, on the Assets and Liabilities sheet. Once those assets become obsolete to the company they become wastes and are listed as liabilities.  Since no one likes to look at, smell or even talk about waste, this loss to the company is considered Standard Operating Procedure.

Consider this: The leaves falling outside my window are assets to the Sweetgum tree. When the leaf is no longer an asset, it is severed by the tree and drops to the ground.  In nature, all wastes are assets in disguise.  So the leaf is broken-down into usable parts (nutrients) which are taken in by earthworms, grubs, and microorganisms as assets. Consequently, the leaf never becomes a waste.  Your business will benefit from similar thinking.

So, if your competition has a commitment to Zero Waste how do their Assets & Liabilities sheet compare to yours?  Even if a company commits to Zero Waste but never achieves it, they are still reducing the amount of waste generated, meaning they are doing better at maintaining assets and moving fewer items into the Liabilities column. My advice: Start considering everything as an asset – even a resource which has become obsolete - which is going to cost you a second time when you allow it to become a waste.

Take packaging as an example. You order supplies and equipment which are delivered in some form of protective packaging.  Conventional thinking says to focus on the quality and price of the ordered goods and pay little mind to the packaging.  However, even if not listed on the invoice, you paid for that packaging when you paid for the ordered goods.  You may as well have some say in what happens to that package once its original value to you has passed.  If you determine the package is now a waste you will pay again to have it removed from your business.  Wouldn’t it be better if that package could still serve a purpose, either for you or someone down the supply chain, and not become a waste?

Let’s review the Sustainable Packaging Coalition’s definition of Sustainable Packaging:

  • Is beneficial, safe & healthy for individuals and communities throughout its life cycle;
  • Meets market criteria for performance and cost;
  • Is sourced, manufactured, transported, and recycled using renewable energy;
  • Maximizes the use of renewable or recycled source materials;
  • Is manufactured using clean production technologies and best practices;
  • Is made from materials healthy in all probable end of life scenarios;
  • Is physically designed to optimize materials and energy;
  • Is effectively recovered and utilized in biological and/or industrial cycles.


Based upon these guidelines, take a new look at the packaging you receive from suppliers. Remember the packaging is part of the product during its journey through the supply chain. Begin treating the package as an asset by specifying its composition, dimensions, and downstream use after the product is unpacked. This is not a new concept. Retailers fulfill orders from smaller grocery and drug stores with reusable plastic totes which are nested and returned on the distribution center backhaul.

Alternatively, recycle the package. If it’s a corrugated container, you may get revenue for sending the valuable fibers from your shop floor to a paper mill for reuse in other products.

TAKING A CLOSER LOOK AT SUSTAINABLE OPERATIONS

Although seemingly quite vogue in the present day, operating in a sustainable manner has been around for centuries.  The Iroquois Confederacy, an organized and centrally governed group of Native American tribes in the mid-Atlantic regions of the U.S., relied on sustainability to promote sound judgments.  Here is a quote from their written laws:

In every deliberation we must consider the impact on the seventh generation... even if  it requires having skin as thick as the bark of a pine.

              • Great Law of the Iroquois

Consequently, they would take the time to consider what impact their actions,

for instance setting fire to a forested area to foster recovered growth as a meadow, would have on the seventh generation of the Iroquois. Unfortunately, it’s doubtful that most businesses are considering present-day decisions much beyond the next fiscal year.

Closer to the present is the 1987 Brundtland Report, developed by the Center for a World in Balance and included in the United Nations resolution 42/187, contained the first widely recognized definition of Sustainable Development:

    Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.

    Brundtland Report

This report directed world attention on future generations and their ability to meet future needs based upon how the current generation uses resources.

This definition is one of many being used in the world today.  Several versions of sustainability include a direct tie to Triple Bottom Line operations:  People, Profit, and Planet.  If you operate with your employees, customer and neighborhoods in mind (people), consider the impact of your operations on the environment (planet), and promote the highest return on investment for your stakeholders and investors (people); you will succeed and sustain your business into the future.   

RATIONALE FOR IMPLEMENTING SUSTAINABLE OPERATIONS

First and foremost are the financial benefits to your bottom line.  You must make decisions that promote financial security if you are to sustain your business.  This is the key reason to cite when promoting adoption of sustainable operations – especially with company management and board members because this is priority #1 for them.  There are other, more secondary reasons, also.

Sustainable operations provides the means of responding to external environmental factors: climate change, energy shortages, higher fuel costs, compliance with environmental regulations and pressure from NGOs (Non-Governmental Organizations), customers and the media.

You will be promoting more efficient use of natural and human resources by focusing on maintaining assets and reducing wastes.  Take the previous comment on packaging, by maintaining the packaging as an asset you not only reduce the amount of waste you pay to have landfilled, you garner revenue from selling the fibers as a recyclable asset.  Additionally, you can promote this environmental accomplishment to customers, regulatory agencies and the media.  Is it good for the environment? Yes.  But above all else it was good for your bottom line.

Reduced waste generation equates to fewer hauls of compactors and trash dumpsters to the local landfill which, in turn, reduces truck traffic servicing your facility, traffic congestion, vehicle fuel use and GHG emissions.

Additional benefits include marketing opportunities in the form of awards, media releases, community partnerships, co-promotions with NGOs and non-profit organizations and enhanced employee morale.  Many human resource experts cite the desire of the current workforce to not only make a good living but feel good about their place of employment.  Sustainable operations can be used to recruit and retain motivated employees.

Finally, by promoting social responsibility (one of the three legs of the triple bottom line), your company can enhance customer loyalty. 

How to Begin

A suggested first step is to review your business processes and seek out opportunities that have worked for others and would work for you. Refer to the Case stories section for ideas.

Next, target key personnel who will need to be on-board for successful implementation.  The best way to initiate the conversation is to promote the potential cost savings, revenue generation or both. Very few companies can afford to promote new initiatives that do not promote the bottom line.  Additionally, if you propose sustainable operations from a strictly environmental vantage point, your idea will most likely be dead in the water because most executives associate environmental benefits with unbudgeted expenses. You may even jeopardize your ability to propose and implement future ideas.

Key personnel include:

• Your immediate supervisor

• Chief Financial Officer

• General Counsel

• Chief Marketing Officer

• CEO

• CSO (Chief Sustainability Officer)

• At least one member of the Board

You can succeed without buy-in from all of these positions, but long-term efforts will require awareness and support of these and others in your company.

A Note on the Value of Financials

I know, you dread financials: So did I.  But finances are the first thing management is going to review; therefore finances are the best way to get and maintain support for your sustainability initiatives. So get a finance person on your side: one who can communicate ROIs (Returns on Investment) and projected revenues in a simple, demonstrable manner, and proceed.

Building Your Argument

Consider the introduction of your ideas as planting seeds. You can briefly mention ideas and opportunities to spur interest and garner attention.  For instance, mention energy conservation opportunities when asked to dim the lights for a presentation.  Or, bring up waste diversion savings when you hear the waste hauler truck emptying your facility’s trash dumpster.  Then, within a few days, provide an outline of your idea to your previously identified key member of management – and always copy your immediate supervisor.  Then let the hallway conversations commence.

Presenting to Upper Management

Some important points to consider when you are given the chance to make a more formal presentation:

Networking: Make sure you have lined up the support of at least one person in the audience who will provide positive comments and assist you in addressing pointed and sometimes awkwardly-worded questions. Networks of greater than one are even better.

Proper Language Speak: You know your idea.  So now you have the chance to convey it to those who can make it happen.  Make sure you speak their language.  Here’s a “for instance”: When I first started at Albertson as Resource Conservation Manager I quickly discovered that the store compactors were on a scheduled haul with the waste hauler.  Every Tuesday, regardless of how full or empty the compactor was, the hauler emptied it at the local landfill.  Since there was no scale at the landfill it was anybody’s guess as to how full the compactor was. To address this costly situation I placed pressure gauges on the store compactors, instructed staff to cancel the scheduled hauls and switch to an on-call basis, and use the color-coded reading on the gauge - set to read “yellow” when the compactor was 80% full.  The result: Frequency of hauls decreased from once per week to once every ten days.  The first quarter one store alone saved $3,000 in operating costs.

So, when I told the store director of the savings he shrugged his shoulders.  As he walked away I realized I had to translate the savings into his language: store sales.  I caught up to him and announced the changes in waste hauling equated to new sales of $150,000.  His face lit up and he firmly shook my hand.  I was repeating myself – only now in his preferred language. In a 2% profit-margin business $3,000 in savings equals profits from sales of $150,000 (a factor of 50).

Moral: Learn your target audience’s language and you will more effectively communicate your ideas.

 

Marketing Your Accomplishments

Be prepared to manage the majority of this effort despite the existence of a Marketing Department. Why?  Because they may not initially recognize the opportunities nor dedicate time and personnel to fully take advantage of the competitive edge you are providing to your company.  Try to sit down with someone from Marketing and show them examples of what other companies have implemented and the recognition they garnered.  Since sustainable operations impacts the Triple Bottom Line, relate your project to the personal interests of your targeted Marketing personnel. Maybe community involvement means a lot to them or perhaps they are known for their fiscal conservancy – either way you can spin your project to catch their attention.

Once you have several projects implemented suggest the company consider producing a Corporate Social Responsibility (CSR) report which provides details on company financials (profits); social impact (people) and environmental stewardship (planet). In short, an annual report on your company’s triple bottom line. This is how a majority of Fortune 500 companies communicate their sustainability efforts.  Industry-recognized guidelines, including The Global Reporting Initiatives (GRI) guidelines (endorsed by the United Nations), are available at no cost and global in nature  

Spread the Flames

Make things happen at your company and then promote your ideas (and yourself) by spreading the flames to others:

• Present at industry conferences and seminars

• Submit articles for industry publications

• Solicit your availability to speak to media and peers in industry.

• Inform regulatory agencies of your accomplishments

• Share the credit with key players