A new kind of e-business is taking hold.
It's not as speedy as the Internet. Critics say it's about as exciting as watching a forest grow. Nevertheless, the trends are clear.
Companies are going "environmental."
You can see it everywhere. Corporations are cutting pollution, reducing waste, measuring environmental progress, and making products more "earth friendly."
Every CEO, it seems, dreams of becoming chief environmental officer. And unlike previous generations of chief executives, who cleaned up because regulations forced them to, many of today's CEOs are doing it because they want to.
"They're going well beyond ordinary environmental compliance," says Don Reed, deputy director for environment and business with the World Resources Institute, an environmental think tank in Washington. "And they're doing it for business reasons."
Some companies go "green" to boost their images; others hope to head off further regulation. But increasingly, companies are doing it to save money and make their products more competitive.
"We have a philosophy around here that good economic performance and good environmental performance are compatible," says Mack Hogans, senior vice president of corporate affairs for the Weyerhaeuser Company, based in Federal Way, Wash. "You can't have one without the other."
In 1997, the forest-products giant started an experimental program with the US Environmental Protection Agency (EPA), in which the agency reduced regulatory requirements in exchange for superior pollution-cutting performance at its Georgia pulp mill. Weyerhaeuser estimates it is saving some $200,000 to $500,000 a year in operating costs alone, not to mention additional capital savings.
Last fall, the company agreed to align all of its operations with an internationally recognized environmental management standard by 2005. The idea: By taking the environment into account in key decisions, management can improve efficiency, reduce waste, cut costs and risks, and improve relations with its customers and community.
United Parcel Service is cutting energy consumption, saving 2,200 trees, and eliminating some 550 tons of solid waste a year, thanks to its recent move to greener packaging. The company has pioneered a reusable delivery envelope and increased its use of recycled materials. Bottom-line savings: about $1.6 million annually.
Environmentalists, however, remain skeptical that the business world has really turned a corner.
"Some American companies are saying they're green," says Daniel Becker, director of the global warming and energy program at the Sierra Club in Washington. "A much smaller number are doing things that are green."
And business polluters remain an important problem. In fiscal 1999, EPA assessed US businesses a record $166.7 million in civil penalties.
Still, environmentalists and regulators agree that some companies do stand out for their environmental performance.
For example, last month the Sierra Club handed out the first-ever product award in its 108-year history - and to a car, no less. The group honored the new Honda Insight, a low-emission hybrid vehicle that gets more than 60 miles per gallon. "We felt that we needed to recognize a good step when an auto company made one," Mr. Becker says.
Mr. Reed of the World Resources Institute points to companies such as Xerox, which builds copiers with parts that can be reused in future models.
The EPA last month commended Detroit's three major automakers for their moves to voluntarily remove polychlorinated biphenyls (PCBs) from their electrical equipment. DaimlerChrysler, for example, has eliminated all its transformers and 99 percent of its capacitors that use the toxins. PCBs present a health hazard to people, fish, and wildlife.
One recognized environmental innovator is Interface Inc., an Atlanta-based manufacturer of carpet tiles and other commercial interior products. "For the first 21 years of Interface's existence, I never gave one thought to what we took from or did to the Earth, except to be sure we obeyed all laws and regulations," writes chairman Ray Anderson on the company's Web site.
But in 1994, looking to set the company's vision, he became convinced of the importance of sustainable business practices. Now, the company incorporates recycling and reuse and has started a program leasing instead of selling carpeting. When the customer is done with it, the company comes and picks it up.
Interface can already recapture and reuse 95 percent of the backing and fiber of its latest tile, Solenium. It's aiming for 100 percent. "If successful, we'll spend the rest of our days harvesting yesteryear's carpets, recycling old petrochemicals into new materials, and converting sunlight into energy," Mr. Anderson writes. "Literally, our company will grow by cleaning up the world, not by polluting or degrading it."
Another company with a zero-emission, zero-waste goal is DuPont. The Wilmington, Del., firm hasn't set a deadline yet. But last September it announced that by 2010, it plans to reduce its carbon-equivalent greenhouse-gas emissions by 65 percent, use no more energy than it did in 1990, and fuel 10 percent of its energy needs with renewable resources. (At the moment, such a move would cost an extra $60 million to $90 million a year.)
The company has also said that by 2010 a quarter of its revenues will come from renewable resources, up from 5 percent today. In the early 1970s, "DuPont was a compliance company," says Dawn Rittenhouse, the firm's business sustainability manger. But "it's no longer OK to make incremental improvements."
Companies still have to make tradeoffs, at times, in deciding how much they're willing to spend to clean up after themselves. Last September, Goodyear Tire & Rubber announced it had patented a process to devulcanize the rubber in old tires and reuse it to make new ones.
But the company has not yet figured out whether its laboratory process can be scaled up into a commercially viable business. Until it does, Goodyear continues to emphasize current programs that shred tires to burn them for fuel or make them into railroad crossings and auto floor mats. Three out of every four tires that come off American cars are reused in some way. But if the company's new process takes off, landfills and scrap yards could be cleared of millions of old tires while reducing demand for new rubber.
"It's going to be a very difficult road to get to," cautions Jim Whiteley, vice president of global product and process quality for the Akron, Ohio-based tiremaker. But "we certainly want to be known as environmentally friendly.... Good business is being a good corporate citizen."
(c) Copyright 2000. The Christian Science Publishing Society