21st Century Economy: If it is Good for the Environment, It Can Be Good for Business

When German-owned Evonik Industries sought to reduce its greenhouse gas emissions and to bolster its standing in the local communities where it serves, it looked inward — to one of its own units to come up with solutions. The speciality chemical maker’s site in Darmstadt, Germany found a source of waste heat to run its production processes. In co-operation with a local energy supplier, a mile-long steam pipeline was built to connect a waste incineration plant with Evonik’s site.

About 200 million pounds of steam are delivered to Evonik each year displacing natural gas and thus cutting approximately 26 million to 31 million pounds of greenhouse gas emissions each year. While the company says that such investments do reap a return, it often takes longer than the typically anticipated pay back periods it sees on its investments in its chemical plants.

“We don’t do it for publicity reasons,” says Andree Blesgen, senior process engineer for Evonik’s Mobile, Ala. office, in a phone interview. “The investments in capturing waste heat need to be financially sound. It saves greenhouse gas emissions and it saves money for everyone: Evonik and the energy supplier.”

Blesgen will participate in a panel discussion moderated by this reporter at Environmental Leader’s conference in Denver on June 21-23. The topic is the strategies that leading companies are taking to reduce their greenhouse gas emissions, or those of the businesses for which they consult. The other panelists are Yum Brands’ David Harpring and Siemens’ Dan Kubala.

To that end, about 43 percent of Fortune 500 companies have already set targets to reduce carbon pollution, improve energy efficiency and procure more renewable energy, according to CERES, a business group dedicated to sustainability issues.

More than half of the Fortune 100 are publicly disclosing their climate and energy-saving targets – and they’ve collectively reduced carbon emissions by 58 million tons, while saving $1.1 billion annually by doing so, it adds. These carbon reductions by corporations are the equivalent of retiring 15 coal-fired power plants.

The Catalysts?

What’s the motivation? Analytics firm Target Rock Advisors says that if companies focus on the so-called triple bottom line — economics, environment and social — they can outperform other broader indices. Doing so also demonstrates that they are living their missions and ingraining their brands among their customers.

As long as companies are meeting the standards that their governors have set forth, then they are within their right to pursue societal objectives, says Richard Rudden, managing partner of the benchmarking firm in New York State. In other words, companies can still maximize returns while being environmental stewards. 

Corporate missions now, actually, have a more extensive scope. That evolution is occurring because activists, regulators and investors have united to make businesses live up to higher standards. By creating goodwill among all of their stakeholders, those enterprises are building a “brand” — an image of who they are and how they will be viewed.

“How does sustainability fit into your overall branding?” asks Harpring, director of global sustainability and engineering for Yum Brands in Louisville, KY.

“Is it an obvious part of your brand DNA, like Starbucks, in which customers associate it with a sustainable product? he continues, in a phone interview. “If it is not, then most companies first approach sustainability from a business perspective — to drive results. It has to have a good payback.”

As for Yum, it has nearly 43,000 facilities in nearly 140 countries, with many operated by franchises. Yum itself owns roughly 9,000 KFCs, Taco Bells and Pizza Huts, with around 5,700 of those in China and 1,600 in the United States. With this huge global footprint, one of it’s biggest challenges is trying to measure its carbon footprint, says Harpring.

Its initial task is to get the data on how much energy each store is using, as well as how much gasoline its vehicles are consuming. With that, plus a lot of other data, it can gauge what level of emissions it is actually releasing.

The company also wants to know how much emissions it is causing just from being in business by looking at such things as air travel and the pollution tied to the products it uses. And, it provides a template for how to report the data that is gathered. Because Yum is a growth company, it aims to reduce greenhouse gas emissions on a per restaurant basis.

Among the items that are often made more energy efficient and that generate a “solid payback:” air conditioning units, lighting and equipment and refrigeration. Combing technologies can often reduce energy usage and emissions by more than 20 percent.

“Once you know where you are starting from, you can put your efforts toward reducing greenhouse gas emissions,” says Harpring. “Our big emphasis has been on the design of buildings and looking at all aspects of how the systems interact.”

Some Help

While Yum has its own in-house energy and environmental managers, a lot of retailers need to get that help from a third party. Siemens offers such expertise. It is working with major chain retailers as well as large industrials.

Its focus is on helping those end users reduce their energy demand and ultimate consumption. For most retailers, the electricity purchased to run their store represents 60-80 percent of their carbon footprint, says Kubala, director of retail management for Siemens Retail & Commercial Systems in Austin. Success means reducing both their bills and their emissions.

To get there, it relies heavily on new technologies and specifically automation, he adds. For example, Siemens provides the tools so that retailers can remotely manage their heating, ventilation and air conditioning units to improve their operations and better understand how efficient they are. By optimizing them, a standard retailer can cut its electricity bills between 15-30 percent, Kubala says, which will reduce its overall carbon footprint by 9-24 percent.

Beyond that, Siemens can automate lighting equipment to ensure that it is turned off in the evenings and during holiday schedules. At the same time, the technologies can ensure that the air quality is always acceptable while HVAC fans only turned on during occupied hours to avoid wasting energy.

“If you have 1,500 stores, you need these automated processes,” says Kubala, in a phone conversation. 

For some, the catalyst toward action is government regulations. For others, it is increasing energy efficiencies and saving money. For still others, it is developing and growing their community relations.

Indeed, enterprises, big and small, are indebted to the communities where they do business — the same folks who shop at their retail outlets or who work inside their factories. Improving the brand thus means making new investments in technologies that can both reduce energy consumption and create fewer emissions. It’s good for the environment and its good for business, which is the common standard in the 21st Century economy.