Recent News of Interest:
Article on Green building and the difference between real Sustainability and Green washing. Know the difference.
http://www.coloradoconstructionmag.com/features/archive/0310_feature4.asp
Modern Material Handling on re-using existing buildings for new purposes.
http://www.mmh.com/article/CA6635516.html?q=Modern+Thinking
Friday, February 27, 2009
Sustainability in the recession
A lot of hype about companies decreasing focus on sustainability given the current economy. I disagree. As companies are being challenged by the economy, they are very actively looking at any cost reduction they can get. This includes: employee travel restrictions (and more use of video conferences), reduced packaging, reduced product transportation, more focus on cost reduction projects. While these initiatives have the primary goal of reducing costs and maintaining cash flow, they also reduce the overall carbon footprint. Frustrated sustainability advocates, should see this as an opportunity.
Just 12 months ago, many environmentalists were pushing technologies that did not have a rate of return that met most companies hurdle rates for capital. The investments you will see over the next few years, will have payback. That is good. Unfortunately, we will not have the R&D $$ to get the next technologies down to a price point that justifies investment. But expect to continue to see a strong focus on energy conservation, wind, and solar hot water. The wildcard is the USA government investments as part of the stimulus package that may have a way of distorting market forces in the selection of technologies.
The other thing that is happening is that many companies are now working beyond the "low hanging fruit" based on pure cost reductions. We are seeing the much longer/more significant changes. This includes:
1) Product reformulation - Manying companies are working on new formulations that use less toxic chemicals. You are already seeing "green" alternatives of major brands. You will start seeing the "green" alternative become the brand itself. I believe "clorox" green cleaner will replace the older clorox window cleaner.
2) Supply Chain reconfiguration - Companies are looking at their carbon footprint as part of their distribution network design. IBM announced they have sofware and services to help in this area. It takes years to change distribution networks, but I keep seeing, smaller DCs, closer to the customer. Part (no all) is based on reducing transportation miles.
3) Packaging Changes - With all the push back on plastic bags, etc, you will see companies get more green in their packaging. No company will compromise on the "look" of their product on the shelf, but packaging companies (see packaging digest) are all pushing green packaging. Green package will become the "attractive" shelf display. This includes recycled content, non-plastic based packaging, and reducing layers. I believe this will start in areas that are more environmental aware areas and over the next 3-5 years become the standard. Get used to bagged cereal and boxed milk.
This economic downturn is exactly what companies need to enable the very large supply chain changes. Many older companies will fail, allowing new companies with more efficient ways of doing business to thrive. This is a great thing for sustainability. Agree?
Just 12 months ago, many environmentalists were pushing technologies that did not have a rate of return that met most companies hurdle rates for capital. The investments you will see over the next few years, will have payback. That is good. Unfortunately, we will not have the R&D $$ to get the next technologies down to a price point that justifies investment. But expect to continue to see a strong focus on energy conservation, wind, and solar hot water. The wildcard is the USA government investments as part of the stimulus package that may have a way of distorting market forces in the selection of technologies.
The other thing that is happening is that many companies are now working beyond the "low hanging fruit" based on pure cost reductions. We are seeing the much longer/more significant changes. This includes:
1) Product reformulation - Manying companies are working on new formulations that use less toxic chemicals. You are already seeing "green" alternatives of major brands. You will start seeing the "green" alternative become the brand itself. I believe "clorox" green cleaner will replace the older clorox window cleaner.
2) Supply Chain reconfiguration - Companies are looking at their carbon footprint as part of their distribution network design. IBM announced they have sofware and services to help in this area. It takes years to change distribution networks, but I keep seeing, smaller DCs, closer to the customer. Part (no all) is based on reducing transportation miles.
3) Packaging Changes - With all the push back on plastic bags, etc, you will see companies get more green in their packaging. No company will compromise on the "look" of their product on the shelf, but packaging companies (see packaging digest) are all pushing green packaging. Green package will become the "attractive" shelf display. This includes recycled content, non-plastic based packaging, and reducing layers. I believe this will start in areas that are more environmental aware areas and over the next 3-5 years become the standard. Get used to bagged cereal and boxed milk.
This economic downturn is exactly what companies need to enable the very large supply chain changes. Many older companies will fail, allowing new companies with more efficient ways of doing business to thrive. This is a great thing for sustainability. Agree?
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