Many otherwise well-informed business leaders, when asked about green business, leap to images of solar panels, windmills and other renewable energy solutions that they cannot afford, that wouldn’t yield a decent ROI even if they could and which, in any case, aren’t going to play a significant role in “greening” our energy economy any time soon. End of interest in green business thinking, right? It shouldn’t be.
The vast majority of companies that have embraced green and sustainable business thinking and made it a core element of the way they operate have started their green journey by focusing on the reduction or elimination of waste in their activities. What is waste? Waste is unnecessary cost that involves the use of a resource that doesn’t contribute directly to the product or service the company is delivering.
EVERY company generates waste regardless of the business it’s in. It may be minor waste like excessive use of office paper through careless printing practices, or poor fuel efficiency in trucks due to underinflated tires. It may be a bigger issue like continued use of in-house servers that are active only 10% of the time when cloud computing services could significantly reduce energy consumption and IT equipment maintenance expenses. Or perhaps the possibility of finding a paying market for some material waste that is currently costing money to haul off to a landfill.
4 good reasons why waste reduction is the best place to begin a green business strategy:
- Waste reduction is the place where green thinking coincides with conventional, profit-oriented business thinking. Whether you believe in climate change or not, whether or not you believe the world is running out of the resources it depends upon, taking waste out of operations is a fundamental driver of financial performance.
- Reducing waste very often doesn’t involve the purchase of expensive equipment or technology and can frequently be achieved with simple changes in the way a business operates.
- Most people find the concept of waste offensive and try to eliminate it in their own lives. If presented with an opportunity to think about cutting waste in their work environment, they will rise to the occasion with surprising enthusiasm (especially if rewarded for their achievements).
- Reducing cost through waste reduction is often a quick and relatively painless way to get some “green” runs on the scoreboard. Once that happens, it will stimulate enthusiasm for – and maybe even free up some funds to tackle – more complex green programs.
In his book “Business Lessons from a Radical Industrialist”, the late Ray Anderson, founder and former Chairman of Interface, Inc., the world’s largest manufacturer of carpet tiles and a pioneer among large corporations in green business thinking, describes waste reduction as “the engine that will pull the whole (green business) train”. He goes on to describe the process by which his company took hundreds of millions of dollars of cost out of its operations over a 13 year period through a conscious focus on reducing waste.
So why is it that so many companies pay little or no attention to attacking waste on a conscious basis and simply accept it as a normal cost of doing business? One major reason is that, for so many companies, especially those in which the cost of people is overwhelmingly the largest line item in the income statement, reducing the cost of, say, electricity, water, office supplies or diesel fuel by even 50% may make only a small dent in the company’s net margin. Leaders often don’t have the time or brain space to get to grips with it when there are so many other challenges requiring immediate attention, even though a large number of small cost reductions can collectively make a big difference.
The key to a truly effective waste reduction strategy is to establish a CONSCIOUS and ORGANIZED effort to uncover the best opportunities. This is often best done by creating a waste reduction team (Interface established a Zero Waste team). No need initially to establish a $$$ budget for equipment, training etc. But it WILL be important to allow the team to spend some work time on analyzing where waste is occurring and how it might be reduced: maybe just a couple hours a week at first. Making it clear there will be some sort of reward for successfully implemented waste reduction programs will help too.
However, you decide to approach it, the bottom line is that a conscious and organized waste reduction program is a green business initiative that will help your bottom line.
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