The Case for Green Growth

It’s clear the economy and construction industry will never be the same again. In fact, they very well may become better than ever. As the world awakens to the dawn of a new economy and the powerful opportunity for the next generation of green, leading manufacturers are beginning to reevaluate their products, systems, manufacturing methods and services.

It no longer simply is enough to have products that contain recycled content or are able to be recycled. As market intelligence develops, companies that ignore their products’ composition, raw-material extraction, the energy intensity of their manufacturing process and size and nature of their waste streams soon will be looking for work in greener pastures, but coming in with little or no sustainability experience. In other words, as consumer awareness grows, demand for truly sustainable products will either change managers’ minds or the managers themselves, whichever comes first.

As we seek to understand the true sustainability of products and systems, this interest is shared among manufacturers and design and construction professionals, as well as owners and end-users of the built environment. Whether you manufacture, sell, specify, buy or use construction products, you probably care whether they will adversely impact you or your family’s health. You might even care if these products affect the quality of the air, water and soil.

Digging still deeper, some managers may begin to explore their products’ durability and life cycle. Globally minded managers increasingly are concerned about their products manufactured outside of the U.S. Are they being produced under fair-labor practices? What is their transportation footprint? When oil prices again rise and gasoline tops $4 or $5 per gallon, will we remember that all sustainability is local?

There certainly is enough work to be done in research, testing, adaptation, innovation, energy and water efficiency, resource conservation, preservation, restoration and renewable systems to keep a large number of the potential workforce employed in meaningful and life-sustaining work. This is our common ground and something we can all do that matters—profitably making every job a green job for business.

Ray Anderson, founder and chairman of Interface, Atlanta, noted that the transformation of his company’s carpet-manufacturing process really began by understanding how bad it was. “For the first 21 years of Interface’s existence, the company gave no serious thought to what we were taking from or doing to the Earth,” he says. “We did what was necessary—we abided by all the necessary laws and regulations—and focused, like most companies, on running a growing business.” All that changed after Anderson read Paul Hawken’s book, The Ecology of Commerce—an experience Anderson describes as an epiphany and often frames as a “mid-course correction.” The book challenges traditional concepts of business and profit and looks at the economic potential of a sustainable, restorative model of commerce.

Interface has made it clear that its sustainability initiative is a journey. Its “Mission Ø” program, which seeks to eliminate any negative environmental impact of its products by 2020, is just that—a pathway or roadmap of opportunities. Between 1996 and 2008, Interface cut its net greenhouse-gas emissions by 71 percent in absolute tons while simultaneously increasing sales by 66 percent and doubling its earnings, expanding its profit margins and propelling innovation.

But how should corporations interested in deeper levels of sustainability get started? Melissa Vernon, director of sustainable strategy at InterfaceFLOR, says, “We have learned a ton by doing product life-cycle analysis. It has focused us on our biggest environmental impacts versus getting distracted by the media’s spin on environmental impacts.”

A life-cycle analysis or assessment is a technique to assess the environmental aspects and potential impacts associated with a product, process or service by compiling an inventory of relevant energy and material inputs and environmental releases, evaluating the potential environmental impacts associated with identified inputs and releases, and interpreting the results to help make a more informed decision.

Knowing what is in your product, what it is composed of and where it comes from is crucial to getting your arms around product sustainability. Talking to your raw materials or components suppliers is similar to the way the Washington, D.C.-based U.S. Green Building Council transformed the built environment through its LEED green-building rating system. Asking good questions is where it all begins.

Last July, Bentonville, Ark.-based Wal-Mart Stores Inc. issued plans for a worldwide sustainable product index for suppliers. The need for the index was explained in three clauses: world population is increasing; world natural resources are decreasing; and consumers want more efficient, longer-lasting, better-performing products. The index begins with a supplier assessment, where Wal-Mart’s suppliers are asked to answer 15 specific questions about whether they measure and publicly report results around energy and climate, natural resources, material efficiency, and people and community.

Mike Duke, president and chief executive officer of Wal-Mart, says, “The index will bring about a more transparent supply chain, drive product innovation and, ultimately, provide consumers with the information they need to assess the sustainability of products. If we work together, we can create a new retail standard for the 21st century.”

With more advice about getting started, Chuck Otto, principal of Corporate Sustainability Communications, Holland, Mich., says, “Get involved with local USGBC chapters for networking and ideas. Around here we have the West Michigan Sustainable Business Forum, a group that includes Steelcase, Haworth and Herman Miller, as well as architects, industrial designers and suppliers. Similar groups are popping up around the country. Companies also can find virtual sustainable organizations online via LinkedIn and other business sites that offer webinars, white papers and other helpful tools.”

One such online resource for helping product manufacturers and suppliers get started with sustainability, recently unveiled by the Alexandria, Va.-based Construction Specifications Institute, is GreenFormat. GreenFormat is a Web-based database and resource program that allows users to search green products, evaluate their characteristics, choose products that fit the desired performance requirements and obtain specification-friendly results.

With GreenFormat, manufacturers have the opportunity to distinguish themselves from competitors. Manufacturers can indicate their products’ potential contributions to LEED points, as well as list other sustainable features or benefits. GreenFormat provides a place to look beyond the greenwashing and marketing brochures for performance characteristics and deeper sustainability performance, as well as third-party certifications. It demonstrates a comfortable level of transparency.

The real challenges to product sustainability lie not with knowing where you are, but rather where you should be going. Making improvements are not the easiest challenges to face. But the rewards for these and other kinds of improvements can be bountiful. As in the case of Wal-Mart and Interface, companies can find and eliminate waste, as well as any bad practices, materials and processes, and increase margins over time.

Most corporations that have gone through a greenhouse-gas inventory using the Greenhouse Gas Protocol have noted it is critical to define the boundaries of study. The GHG Protocol is a popular international accounting tool for government and business leaders to understand, quantify and manage greenhouse-gas emissions. The most transparent and thorough approach is to include upstream and downstream impacts (looking at your supply chain and end-of-product-life issues). At last year’s Green Manufacturing Conference, Barbara Chung, senior manager, Sustainable Growth for Los Angeles-based Fiji Water, noted that in documenting the company’s GHG inventory, “We learned about cost-reduction opportunities throughout our supply chain.”

Anderson estimates that Interface is about 15 years away and 60 percent of the way on its path to a zero footprint; this journey has reduced the company’s costs and increased its market share. If a chemical-laden, petroleum-intensive company can do it, others can, too.

A recent study by global-management consultants A.T. Kearney found that 99 sustainability-focused companies—each of which excel in protecting the environment and promoting social well-being while preserving shareholder value—outperformed the broader market by an average of 10 percent from September to November 2008 and by 15 percent from May to November of the same year. The key is that these high-performing companies all see sustainability as fundamental to their business strategy.

It’s little wonder then that Wal-Mart; Seattle-based Starbucks; Dearborn, Mich.-based Ford; and Midland, Mich.-based Dow Chemical, among many others, have figured out they need to be engaged in sustainable business practices. It simply makes financial sense. One of sustainability’s most powerful attributes is it works on the top and bottom lines. Although saving energy dollars goes straight to the bottom line, increasing market share or attracting new customers because of green practices is a top line, revenue-enhancing bonus.

Whenever I think about money, timing and what to do next, I am reminded of the British statesman who turned to his colleagues in the trenches during the deepest and darkest days of World War II and said, “Gentlemen, we are out of money—therefore, we shall have to think.”

Certainly, difficult economic times warrant concern about revenues and expense-cutting exercises, but these times very well may pose the absolute best time to strategize how, where and what your product is made of. I informally polled several senior executives regarding the best time to rethink their products. Without hesitation, all agreed that it is not when you are making hay but rather when there is staff time and bandwidth for innovation. In other words: now.

This deep-reaching economic crisis, although sometimes difficult to endure, is not new to the world. We have been here before. This time, however, there is a feeling of great opportunity for real change, not simply weathering the storm. It’s up to us now. We truly are the people we’ve been waiting for.

James Scott Brew is a principal architect with Rocky Mountain Institute, Boulder, Colo., and a member of the CSI GreenFormat Task team. He can be reached at jbrew@rmi.org.