As belts continue to tighten in organizations across the country, many companies are looking at reducing waste to save money. We suggest you start looking at that waste as something to profit from. Here are two examples of companies creating products from previously discarded matter.

Just last week, the City of San José unveiled a $20 million deal in which three private partners would produce 900,000 gallons of methane biogas from 150,000 gallons of their residents’ organic waste. If the project passes regulatory approval, it will use yard debris and food waste that would ordinarily go to the landfill. The city estimates that with this new venture they can reduce greenhouse gas emissions equal to 1,800 vehicles a year, create green jobs, not to mention reduce the burden on landfill. Utilizing a process developed by the German company Bekon Energy Technology, the biomass is placed in concrete digesters and fermented. After a dry fermentation process, biogas and fertilizer pellets are leftover and available for sale.

In Portland, Oregon, a facility has just opened employing a new technology able to convert wastewater into environmentally-safe, premium-level, commercial fertilizer. The first of its kind in the U.S., the wastewater treatment facility employs a process that is able to remove various nutrients and up to 90 percent of the phosphorus in the wastewater, producing 500 tons of fertilizer annually. As part of a public/private partnership with Ostara Nutrient Recovery Technologies, Clean Water Services (the owner/operator of the plant) is hoping that what was once considered waste will now be a new revenue stream. As Bill Gaffi, general manager of Clean Water Services puts it,

This technology will save our ratepayers money by extracting nutrients which would otherwise clog our pipes and reduce our plant’s treatment capacity, while also creating a unique and environmentally safe commercial fertilizer product.

It is quite impressive that companies and local governments are finding ways to turn something that used to cost them money to dispose of, into a new product and revenue stream. Isn’t it time we stopped looking at waste as something to dispose of, and started looking at it as a way to grow revenue? What are other examples you’ve seen where organizations are leading the charge to convert trash into cash?

When Neville Isdell, the former Chairman and CEO of Coca-Cola, spoke at the Gathering of One Hundred conference in Washington D.C., he expressed his thoughts on how business can tackle climate change. He called for the formation of new partnerships between business, government, and civil society, as part of what he referred to as the “triangle of sustainability.” Adding, “the political climate has changed. There is a new urgency among governments to address climate change.” Mr. Isdell also observed that this change must come amid our current economic recession, and that the role of business is to:

• Address our footprint;
• Extend our handprint; and
• Help shape the regulatory blueprint

In an effort to address their footprint, Coca-Cola is working on reducing their packaging, and increasing the amount of bottles they recycle. To better extend their handprint, Mr. Isdell says Coca-Cola has changed their refrigeration technology from HFC’s to a more efficient CO2 variety, and has challenged the rest of the industry to join them so the price can come down and the technology can be more broadly deployed. Finally he spoke of helping to shape the regulatory blueprint by endorsing the Caring for Climate Leadership platform of the UN Global compact in 2007.

For all that companies are currently doing, we need to do more.  As Mr. Isdell said, “The mindset of business needs to move from ‘should,’ to ‘must.’”

What do you think of Coca-Cola’s initiatives? Are they on the right track or is there another motive?

photo credit: World Economic Forum (flickr)

As the comprehensive energy bill continues its way through the halls of Congress, we thought it might be a good time to take note of the potential effects for your company.  Though the majority of the policy has yet to be written, much less pass, we’re taking a look at what could happen in order to create an action plan for all of us.

leaning towards cap-and-trade

The pressure on the government to enact policy regulating carbon dioxide (CO2) emissions is growing, as citizens increasingly fear the effects of climate change. Though some may feel that a cap-and-trade policy is not ultimately the most effective at curbing CO2 emissions, it is the route we are currently pursuing. The alternatives, a carbon tax or regulation of emissions by the Environmental Protection Agency (EPA), are not popular policies. Getting anything labeled a “tax” through Congress is nearly impossible and would not sit well with Americans in this economic climate.  As for the EPA regulating emissions, that has received a big rejection from the business community. So we’re left with cap-and-trade.

what is cap-and-trade?

Cap-and-trade would set a cap on the CO2 companies are allowed to emit, and then gradually reduce the allowed levels over time. Companies that need to increase their emission allowance must buy credits from others who pollute less, creating the trade portion of the policy. The buyer is being fined, in effect, for polluting more, while the seller is being rewarded for reducing emissions more than required. Issues arise when determining the cost of this policy and where those costs fall.

possible effects of cap-and-trade

In short, the price of energy could become even more volatile. Cap-and-trade will create a new system for pricing carbon, adding volatility to the energy markets. The European system of cap-and-trade often experiences price movements of 17 percent a month. This volatility could lead to financial speculation on permit pricing, with energy companies having a distinct advantage in predicting future demand. Stefan Heck of McKinsey believes “cap-and-trade might add 20 – 30 percent to energy costs.” The rise in energy prices could increase production costs for American companies, decreasing their competitiveness in the world market. Businesses which can no longer compete with foreign producers would have to close or move–which is how we get back to asking whether this policy will move more of our industries to China.

Photo credit: voux

move to china? the answer is no

Well, perhaps no one knows for certain. Currently, it is unclear if higher energy costs will create a profit incentive to move to China. One should keep in mind that China is the world greatest emitter of CO2. They too will be facing internal and international pressures to implement a CO2 policy of their own, negating any prior energy price advantage. If that doesn’t happen, the U.S. would have the option of instituting carbon tariffs on goods from countries without a carbon cap. There are problems with this policy, notably with certain existing trade agreements as well as the tendency of other countries to enact tariffs of their own in response.

solutions

Reduce, reuse, recycle. Indeed, it may sound like something from 1996, right out of an episode of Captain Planet, but it should be your corporate mantra. Opportunities exist throughout the supply chain to put these techniques into action. Implementation is industry specific, however here are a couple of examples.

Wal-Mart is executing a plan to reduce their packaging five percent by 2013; they estimate that for Wal-Mart U.S.A. 667,000 metric tons of CO2 will not be emitted into the atmosphere, 66.7 million gallons of diesel fuel will be saved, and 213,000 trucks will come off the road annually. The bonus: Wal-Mart is saving money too.

In the textile industry, use of AirDye® technology can result in energy savings of up to 87 percent. Using AirDye can additionally eliminate excess inventories. This allows goods to be ordered as needed, better matching supply with demand.

When faced with a cap-and-trade policy that could increase the cost of energy 20-30 percent, will you reduce, reuse, and recycle, or do you plan on learning Mandarin?

In these tough economic times, there are very few areas of growth.  Currently green purchasing is bucking the trend. A recent IRI Times & Trends Report showed that green-product popularity has grown for the past five years.

You might ask just who is buying more eco-friendly products? Interestingly, the report showed that the most environmentally focused consumers aren’t increasing their purchasing. Probably because their shopping baskets are “already saturated with sustainable products.” On the other hand, consumers who are slightly less committed to a sustainable lifestyle have yet to reach their green purchasing limit. It’s these folks who have increased spending on sustainable items by 15 percent.

The report goes on to break consumers into several categories, or segments:

• Eco-Centrics are the most well-informed and actively involved in environmental issues. They are willing to pay more for eco-friendly products.
• Respectful Stewards are idealistic and community focused. They are also willing to pay for more eco-friendly products.
• Proud Traditionalists are hard-working and focused on family. They run environmentally responsible homes and experiment with eco-friendly products.
• Frugal Earth Mothers are lower-income women looking for ways to save money wherever possible. They are more focused finding good, wholesome products for their families.
• Skeptical Individualists are highly-educated, high-income men who tend to be skeptical about corporate green initiatives.
• Eco-Chics are young adults who see green as new and hip. Impulse buyers and early adopters, they tend to be drawn to environmental causes but aren’t necessarily well-informed about them.
• Green Naives are young, lower-income shoppers with little interest in environmental responsibility.
• Eco-Villians – generally middle-income men – do not environmental concerns into their purchasing choices.

Think about which segments your products attract and target your marketing to suit their needs. They’ll beat a path to your door.

green is gold

If the IRI report isn’t enough to convince you that environmentally friendly products are selling, a recent national poll found that two thirds of people who buy “green” have maintained their spending  through the recession and one quarter have actually increased their eco friendly purchases.  Only eight percent of people purchasing “green” had reduced their spending due to the economy.

companies are feeling the pressure

What’s more, according to a recent U.K. study conducted by YouGov, one in four people consider a company’s ethics before purchasing. One in seven people don’t purchase anything from companies with poor environmental records. In the same study, 59 percent of consumers are skeptical of the environmental claims made by companies, and 44 percent want more information on a company’s environmental record.

It seems everyday more studies and polls are showing that consumers want sustainable, green products, and that this is not a fad but a trend with staying power. Even with the recession consumers are not changing their habits. The fact that consumer demand for green products hasn’t waned under economic pressure, and that it is one of the few current growth segments, makes producing green an enticing option for companies seeking growth.