Sustainability goals are framed as altruism, but environmentalism often is good for the corporate bottom line.
THE BUSINESS case for corporate sustainability has never been stronger as companies find ways to earn more by using less. Above, a worker walks past a United Airlines plane using aviation biofuel at LAX in June. (Mario Tama Getty Images)
On September 21, 2019, Chris Martin and Millicent Dent write in the Los Angeles Times:
Corporate sustainability efforts are sometimes framed as acts of altruism — but for big businesses, protecting the environment is often good for the bottom line.
Nike Inc. has come up with a way to weave more efficiently, reducing the raw material and labor time needed to make each shoe. That has kept more than 3.5 million pounds of waste from reaching landfills since 2012. But the good news doesn’t stop with the environmental impact. The company is spending less on transportation, materials and waste disposal.
The shoemaker’s “more environmentally conscious product has been a source of cost savings,” said James Duffy, an analyst at Stifel.
Those flimsy plastic water bottles sold by Nestle? The ultra-thin design has a smaller effect on the environment while pushing down costs associated with packaging and shipping. Amazon.com Inc. and Walmart Inc. have poured tens of millions of dollars into a fund that builds out recycling infrastructure, reducing landfill tipping fees and recovering material that could be sold as new products.
Tech giants have spent billions of dollars on solar and wind power, cutting greenhouse gas emissions and energy expenditures at the same time. Alphabet Inc.’s Google, Amazon and Facebook Inc. are now some of the largest buyers of green power in America.
Turns out it’s not just easy being green — it also can be profitable. “We’ve moved past this concept that business versus the environment is a tradeoff,” said Tom Murray, who advises companies on reducing emissions at the Environmental Defense Fund, including Walmart, McDonald’s Corp. and Procter & Gamble Co. “The business benefits were always there, but more and more companies are going after them.”
The business case for going green has never been stronger as companies find ways to make more from less. Here’s a look at the ways corporate America is making environmentalism pay.
Lightweight flights cost less: United Airlines Holdings Inc. has been making its planes lighter, driving down fuel use and costs. Airlines account for almost 2% of global carbon emissions. Not even the in-flight magazine has been spared in the search for unnecessary heft: Changing to a lighter paper stock saved almost $300,000 per year on fuel. United redesigned airplane bathrooms, switched out beverage carts and ended duty-free sales.
What it pays: United has saved more than $2 billion on fuel so far.
Reusing towels saves more than water: It turns out that simply asking guests to hang up towels to dry and forgo daily sheet changes can take 25% off hotel operators’ annual energy costs. “To some surprise within the hotel industry, this option was quickly embraced by hotel guests as a small way to engage in energy conservation,” says a report by the Urban Land Institute. Clarion Partners does that at all its hotels and went a step further by reducing flows through toilets, faucets and showerheads.
What it pays: Cutting water use saves Clarion hotels about $17,250 a year.
Idle trucks, real money: Walmart runs one of the biggest trucking fleets in the United States. That means it has scores of semis standing in traffic at any given time. At that scale, the introduction of technology that reduces energy use when trucks are idling and software that creates more efficient routes can improve fuel efficiency by 90%, reducing carbon dioxide emissions.
What it pays: Diesel averages almost $3 a gallon in the U.S.
Tech’s green power payoff: Google, Facebook and Amazon are among the largest energy consumers in the United States, and a lot of that power is now emission-free. Each company committed to getting 100% of its power for its data centers from renewable resources such as wind and solar. Exxon Mobil signed up to energize its operations in Texas with solar and wind energy starting next year, which would place the oil producer among the top 10 buyers.
What it pays: With renewables now cheaper than fossil fuels, these green energy commitments shave an estimated 10% off tech giants’ gargantuan utility bills.
Ditching paper towels is cheaper: Restaurants, movie theaters and others have been making the switch from paper towels to hand dryers in their restrooms for years. Dryers have become the norm because of the savings on the cost of paper towels and the expense of sending garbage to the landfill. Soldier Field, home of the Chicago Bears, made the switch and cut carbon emissions by 76% per use.
What it pays: A football stadium can save more than $12,000 a year on the cost of paper towels.
Resold clothes are a moneymaker: Patagonia Inc. has been repairing and recycling clothes since its inception in the 1970s, making the practice a core part of the brand’s environmental image. Two years ago, the company added incentives for customers who return used items that Patagonia can sell again. This wasn’t just an act of urgency to keep clothing out of landfills. A 3-in-1 Snowshot Jacket that retails new for about $400 was recently listed on Patagonia’s Wornwear website for $187 to $207, more than twice the amount paid to customers in a voucher. “It’s a profitable business unit,” said Phil Graves, director of corporate development at Patagonia.
What it pays: Each resale of a high-quality used jacket can net $100.
Cutting down on plastic: Nestle has been saving money with ever-thinner plastic bottles, cutting the content in its half-liters by more than 60% since 1990. That also reduces the harmful chemicals and emissions produced from making plastic and saves on transportation costs. There also has been a push to use more recycled material. Nestle recently started offering a 100% recycled bottle for its Pure Life water brand. Coca-Cola Inc. has decided to ditch plastic altogether for its Dasani line by pumping water into aluminum cans. That switch will make it easier to recycle and boost profitability. The cans weigh less, which cuts transportation costs.
What it pays: 72 cents per pound of plastic resin.
Gary Reber Comments:
We desperately need to create a responsible democratic growth economy, based on binary economics (human and non-human productive inputs), where in the ownership of productive capital assets would be spread more broadly as the economy grows. The ownership pie would desirably get much bigger and the current few owners’, who control the corporation producing the bulk of the goods, products and services, percentage of the total ownership would decrease, as ownership gets broader and broader, benefiting EVERY citizen (all children, women and men), including the traditionally disenfranchised poor and working and middle class. EVERY citizen would become a full-voting capital asset owner in the corporations growing the economy, effectively enabling operating decisions to be made from the bottom up, eliminating the lopsided distribution of profits, and creating democratic control. Thus, productive capital income, from full corporate earnings dividend payouts, would be distributed more broadly and the demand for goods, products, and services would be distributed more broadly from the earnings of capital and result in the sustentation of consumer demand, which will promote and support environmentally responsible economic growth and more profitable and responsible enterprise.
That also means that society can profitably employ unused productive capacity and invest in more “green,” environmentally productive and enhanced productive capacity to service the demands of an environmentally responsible growth economy. As a result, our business corporations would be enabled to operate more efficiency and competitively, and greener, while broadening wealth-creating, income-producing capital ownership participation, creating new capital owners and jobs resulting from the green growth spiral, and “customers with money” to support the green goods, products, and services being responsibly produced by the added technology, renewable and “green” energy systems, manufactories, rentable space for entrepreneurial endeavor and infrastructure, both repaired and new, added to the economy. As well, the quality and craftsmanship of goods, products and services, freed of the corner-cutting imposed by the chronic shortage of consumer purchasing power, would see a new high standard.
Technological change and our peoples’ secure financial ability to support responsible green production is the way to renew and enhance our environment and address the climate crisis.
Technological change makes tools, machines, structures, and processes ever more productive while leaving human productiveness largely unchanged (our human abilities are limited by physical strength and brain power — and relatively constant). Industries are always changing, evolving and innovating. The result is that primary distribution through the free-market economy, whose distributive principle is “to each according to his production,” delivers progressively more market-sourced income to capital owners and progressively less to workers who make their contribution through labor.
We need to refocus and create equal opportunity to produce under conditions of full green and responsible production and broader capital ownership accumulation. We need to build a future economy that can support secure financial health, a green enhanced environment, and general affluence for EVERY citizen.
The more broadly real productive capital is acquired by individuals, throughout our society, with the earnings of capital, the more we can profitably employ unused capacity and promote responsible, environmentally sustainable economic growth. With greater earnings from capital investment, people will be able to support and pay for more desirable high-quality products resulting from “greener” technologies and advanced, environmentally sustainable energy systems, and afford to purchase the best, heirloom build quality that today people cannot afford––instead of the cheap and exceedingly wasteful and environmentally harmful––produced and disposed––products they only can afford today. Such policies are perfectly in tune wit the natural incentive of business corporations to broaden ownership so that the market for their products will increase. Such policies will liberate the economy and result in general affluence and a far higher quality of life.
