Does Going Green Always Mean Making Green ($)?John Carey
Lots of companies talk big about ‘sustainability,’ bragging about how much they are cutting energy use, greenhouse gas emissions, and their impact on the planet. Many — from Ford to Sun Microsystems — now have vice-presidents for ‘sustainability’ or ‘eco-responsibility’ to oversee these efforts.
Some of this is public relations, of course. But proven reductions in energy or emissions are important, no matter what the original motives. And companies usually get a bottom line benefit. DuPont, for instance, pegs its ‘green’ savings at more than $2 billion.
But I have a question. How many companies are taking actions that go beyond providing an immediate or short-term payback? I look forward to hearing from readers on this question. But over and over, I hear from the ‘sustainability’ or energy efficiency gurus in companies that their efforts can be a hard sell. Both top execs and the guys in the factories or stores have to be convinced that the bottom line will be helped — or at least not hurt.
Take one good example: Wal-Mart.
CEO Lee Scott readily admits that his ‘green’ strategy was born from a desire to improve the beleaguered retail giant’s image. But as it was implemented, the effort quickly became colored by Wal-Mart’s relentless penny-pinching culture. Most steps have to be rigorously justified in terms of cost-savings or revenue-boosting.
It was a no brainer, for instance, to switch stores over to more energy efficient lighting (more --or better--fluorescents and natural light through skylights). But the individual store managers resisted. What if the new light made the meat look funny, or the shirts a different color, and people bought less of them? The managers are under such constant pressure to keep sales up that they never want to take any risks.
So Wal-Mart’s energy efficiency team outfitted some test stores with skylights and more efficient lights. Lo and behold, the goods looked better not worse, even boosting sales. That got people’s attention: They suddenly wanted the new lighting rolled out in all 3700 stores in a few weeks!
It took a lot longer than that. Now that it’s complete, Wal-Mart has gotten a double benefit. Its electricity bill dropped 17%. And the stores look brighter and more appealing to customers.
Another obvious energy-cutting move was putting doors on the refrigerated meat counters. No way, the store managers said. They firmly believed that people would buy less meat if they had to open a door to get at it.
So again, the company had to test the impact in a few stores. The initial results: sales didn’t drop. And managers discovered an unexpected benefit. Kids often toss gum or other trash into the old style open meat cases, requiring periodic cleaning. The doors stopped that. So things look good for rolling out the new energy-saving cases in more stores.
Such are the internal hurdles that companies’ ‘green’ teams must leap to cut energy use or reduce greenhouse gas emissions. I hear similar tales from other companies. My suspicion is that demands for a short-term bottom line benefit are common. But let me know if there are examples out there of companies with a longer-range outlook!