Thursday, February 16, 2012

Carbon Offsets and RECs

Once you've implemented all the energy efficiency work you can, you've changed your fleet, swapped out new boilers, put in high efficiency lighting and even reduced employee commuting and optimized manufacturing lines, how do you drive your carbon footprint even lower?

Why not install solar panels all over your facilities?  Solar can be complex and expensive (>3yr simple payback is intolerable for many companies), and if you live in an area without a lot of sun, it might not make sense.  With the pain of installing wind turbines, that might not work either. 

Your last shot might be through purchasing RECs or Carbon Offsets.  After all, doesn't it make sense to incentivize another project to move forward through meeting its hurdle rates--something that can be done by subsidizing these projects.  (take a look at 3Degrees for a great summary) Think RECs don't work?   Look at the explosion of solar power in MA lately since SRECs are at $529/MWh.  Another option is high-quality offsets from a project that wouldn't move forward without this extra support.  Thus the phrase, "additionality".

The trouble I've seen in practice is that employees and company executives don't buy into the additionality of the project, thus rendering the money in the same category as snake oil and used cars.  How do we know exactly what we're getting?  What is the business benefit?  Why throw money at an external project when we have internal capital needs.  Answers to these questions are tough to pin down. 

On the positive side, these decisions and the discussions around them at least raise awareness about the intricacies of renewable energy projects and practicalities of carbon footprint improvement.

Tuesday, January 31, 2012

Supply Chain Risk

After this week's story in the New York Times on Apple's troubled supplier, Foxconn, we've all seen how the dangers of a supply chain can come back and bite the OEM when not managed carefully.  The working conditions certainly sound atrocious.

But, is supplier EHS management easier said than done?  Some thoughts...

1) Assign staff dedicated to supply chain--existing in-house EHS staff will always get pulled back to their own shop. 

2) Prioritize 1st, 2nd or even 3rd tier suppliers.  This is usually based on spend, but a better way is to take into account other risk issues, such as the type of operation, presence of hazardous chemicals, and availability of EHS policy or programs. 

3) Prioritize products.  An electronic product might have a 8-10 sub assemblies--motor, screen, base, enclosure, hard drive, PC board, for example--but each of those could have dozens or hundreds of parts.  Some suppliers may be single-sourced (there is no other supplier that's been qualified) or even sole sourced (there are no other supplier options...anywhere).   For these instances, suppliers are resistant to change.

4) Decide on where the bar is set.  Some examples that I've seen overseas include employing underage workers, poor industrial hygiene practices, and machine guarding.  Some of these are technical subjects where the OEM could provide expertise to help the supplier. 

5) Think how far you want to go.  Many of us realize also that we can only get in so deep with a supplier before we are directing their EHS programs.  That's not what we want from a strategic relationship, though it might be needed in the beginning. 

OK, this is a start, but it's clearly not an easy issue to tackle!  Companies working together will have better results, as well.

Tuesday, January 10, 2012

Sustainability vs EHS vs Corporate Responsibility

When we started our sustainability program in 2006 we had a lot of debate on what to name the program. Was it Environmental Stewardship, corporate responsibility, global citizenship? There are many legitimate names for these programs that seek to reduce companies' impacts on the environment, our employees and the communities in which we operate.

The lines between EHS and sustainability are blurring. Especially with ISO 14000 programs that seek to prevent pollution and reduce significant impacts, there is a great opportunity for EHS staff to get involved with sustainability development, allowing increased interaction with product managers, customers and executives.

But, compliance needs to come first. I learned that the hard way.

It's critical to have EHS staff involved in sustainability, and maybe they are the most qualified to run these programs; they have technical backgrounds, understand operations and care about employees.

Not all EHS staff are passionate about environmental protection. But not all are Sustainability managers can put together a LOTO or hazcom training, either. That's ok. There's plenty of room across our field for many practitioners.

Each company can figure out how EHS and sustainability fit together. To me, it seems like a nice fit.

Thursday, December 29, 2011

Centralized or Decentralized?

Does it make more sense to run EHS and sustainabity from a centralized corporate setting in a large business, or from the business/plant level?

There are at least two key parts of the EHS and Sustainability Program: strategy, vision and goals; and Executing projects. Ok, they're not mutually exclusive but it helps to have roles defined for each group.

A central or corporate group has to look across the enterprise, see what can be accomplished and then establish an overall roadmap to getting there. They're a fresh set of eyes, people who can bring resources and novel practices.

The plants need to provide input on what can be done, what personnel are available and then only they can work to meet the targets. It's critical to involve both; corporate staff setting targets without the plant won't work. Corporate staff have to be willing to work in a plant or on a project to help out. Each plant establishing its own goals and even capital leads to inconsistent execution. For example, one plant Controller I worked with approved energy efficiency capital as long as it was P&L neutral; savings>depreciation. But, that capital could have been put to better use in another facility. Thus the value of a strong, interactive, central group.

One without the other never works. It's the hard work and eyes at the plant level that can make things happen, identify gaps and find opportunity.

Working together--no matter who reports to whom--is the best way.

Wednesday, December 7, 2011

No Left Turns, and Other Heresies

I recently had the pleasure of meeting and speaking with Andrew Winston, co-author of Green to Gold, and a new book, Green Recovery.  He spoke at the NAEM Annual Forum in Tucson.

Andrew is a guy who really does seem to walk the talk.  He requested a vegetarian meal at dinner, and was familiar off the top of his head with which fish were harvested the most sustainably.  Much of his talk was on how to sell senior executives on the bottom line value of waste reduction, which parallels resource conservation. 

But, one part that struck me was Andrew's interest in innovation around sustainable resource management, and in particular the concept of a heretical idea.  An idea that is totally crazy, different, and has the opportunity to really make a major change in your company.  A couple examples that were cited were (of course) the Toyota Prius, and UPS' "no left turn" concept.  I can't imagine how fast the guy who suggested this got laughed out of the room!   But, UPS claims that the policy cut "28.5 million miles off its delivery routes, which has resulted in savings of roughly three million gallons of gas and has reduced CO2 emissions by 31,000 metric tons".   Not bad.

What's your heresy?

Tuesday, December 6, 2011

Ughh...How to Handle Product Stewardship.

Why is there a connection between the word "Sustainability" and Innovation?  To me, it's pretty simple.  Most of the really cool stuff in the field of sustainability hasn't been figured out yet.  It's going to take some pretty creative ideas and people to tackle the challenges we have ahead.

For example, consider product stewardship: managing the impacts of your products during and after their use.  There just aren't that many companies that have figured out how to manage products in a way that is BOTH environmentally preferable (as shown by lifecycle analysis), and financially viable.  If a product stewardship program doesn't meet these two criteria, it won't be a long-lived program; it will be a marketing campaign.

But, take Patagonia's Common Threads program.  Patagonia has changed the old adage to: "Reduce, Repair, Reuse, Recycle".  What a great way to change its customers behaviors.  This seems to make good sense for both the company and the consumer. 

On the reduce side, a comprehensive guide on its website describes how to care for its garments (Wash lambswool garments by hand in cool water with a bit of dishwashing liquid. Let the garment soak in the basin...) Patagonia says it repaired 12,000 garments last year. Consumers can either send or drop off garments, and Patagonia will fix them (presumably for a small price).  Take a look at the website for the other elements.

I highlight this effort as an innovative way for Patagonia to address one of the toughest challenges that I've seen: managing product impacts in a way that makes good business sense.

Tuesday, November 22, 2011

What's Behind Stop & Shop?

Customer Education Area At Stop & Shop's entrance
Chelmsford, MA
I have usually done most of my food shopping at Trader Joe's and Whole Foods--with the occasional Costco thrown in there.  But after reading about a new "high tech" Stop and Shop opening nearby, I decided last night to give it a try.  How can a supermarket be high tech?

What The Boston Globe didn't mention in its article on the store are the many sustainability features.  Sure, the store will be LEED certified, has the latest LED parking lot lighting, high-efficiency T-5 fluorescents inside and closed dairy cases, but there's more to the story than energy savings.

The new store is seems to be trying to address its real impacts and opportunities. 
  • It was built from a defunct and abandoned movie theater; 
  • There is a nutritionist on site;
  • A free, supervised play area for kids;
  • Free WIFI, a cafe, and tables to sit and enjoy;
  • Organic foods (some at the same cost as conventional--from what I saw), and
  • Better identification of healthy options.   
There is even a drive-through pick-up for busy families that make getting real food as easy as fast food.

It's nice that Stop and Shop has thought about its REAL impacts: its triple-bottom line of people, planet and profit.  And, it has done so in such a thoughtful manner. 

Congratulations, Stop and Shop.