Notice the common thread running through these three tales?
The Starbucks Corp, responding to concerns that growing coffee caused rain-forest carnage, spends some US$200,000 to help Mexican farmers improve the quality of beans grown under a forest canopy. "We weren't sure they'd ever grow beans we would sell," said Orin Smith, the company's chief executive. In fact, the premium-priced coffee produced by the Mexicans turns out to be so tasty, and is selling so well in the US, that Starbucks is introducing it overseas and to institutional customers. It has increased its order for Mexican shade-grown beans 10-fold since the program began in late 1998 and is negotiating with shade-growers in four other countries. "We risked this for the environmental benefits, but it now has potential to be a really profitable product," Smith said.
PHOTO: AFP
At the fervent request of local environmentalists, the Chesapeake, Virginia, plant of Nova Chemicals sets aside 11.5 of its 60 acres for a habitat that Van White, the plant's environmental affairs manager, calls a "bed and breakfast" for migratory birds and other wildlife. The one-time cost is about US$8,000 to plant 24 species of trees and fruit-bearing shrubs. The unanticipated yearly savings is US$16,000.
PHOTO: NY TIMES
"Turns out, that's what we'd been paying to mow those 11.5 acres," White said. Managers of the Los Angeles International Airport, which dumps 19,000 tons of food waste each year, figured that California regulators would soon restrict the practice. So they set up a pilot program with the sewage and utility plants next door. First, the airport grinds up the food scraps. Then the sewage plant puts them through its huge digesters and sends the resulting methane gas back to the utility. "It looks like we'll not only meet future regulations, but we'll save US$12 a tonne in disposal and get US$18 a tonne for the energy," said Louise Riggen, the airport's recycling coordinator.
The yield may be even better: the digesters will also turn out reusable water, a precious commodity in California, and a nutrient-rich sludge that can be sold as fertilizer.
The pattern? All these projects were undertaken with only environmental goals in mind, yet they also yielded unexpected savings or revenue streams.
"The notion that environment is just an expensive cost is way out of date," said Glenn Prickett, executive director of the Center for Environmental Leadership in Business, a unit of Conservation International created with money from the Ford Motor Co. Prickett's group worked with Starbucks on the shade-grown coffee project; has helped the Mobil Corp protect a rain forest while it explored for oil in Peru; and aided Asarco, a mining company, in safeguarding wetlands when it searched for gold in French Guiana.
By now, some 30 years after the environmental movement took hold, many companies are giving second lives to raw materials, fuels and other products that previously went to landfills. Water from their process cooling systems is being used to heat and cool their plants. Fly ash and other pollutants scrubbed from the air often show up in concrete and highway asphalt. Once-disposable cameras are being refurbished for reuse. And makers of deodorants, toothpastes and cold medicines have all but dispensed with cardboard shells for tubes and bottles, reducing paper waste -- and package costs.
But those kinds of projects represent the easy pickings of environmentalism. Today, companies have to do much more. They are often required by law to pull gases from air and materials from water and trash that they never had dreamed would be on any list of environmental problems.
The landfills that have been accepting the nonrecycled wastes, meanwhile, are growing saturated, while dumps where hazardous substances were supposed to find a safe resting place are springing leaks. Gases that were once thought innocuous, like carbon dioxide, are among the greenhouse gases that may contribute to global warming, while others, like the so-called volatile organic compounds found in solvent and paint fumes, have been implicated in depleting the ozone layer. Societal demands have changed, too. Previously, communities were satisfied when companies simply complied with regulations. Today, they want them to set aside wilderness areas, clean up rivers that they never had a hand in soiling and be far more squeaky-clean than the government insists. And companies are loath to fight back."When you reduce waste and emissions, a community is a lot more willing to issue permits for other operations down the road," said Samuel Smolik, vice president for global environment, health and safety at the Dow Chemical Co in Midland, Michican. Most companies assume that they are already using the least expensive materials and most cost-effective processes. They also assume that solving environmental headaches will cost them plenty. So discovering that the answers to environmental demands can shift to the profit side of the ledger is a big financial surprise.
Better efficiency
"When they substitute chemicals or processes, they often have to put in expensive equipment, retrain workers, do lots of costly things," said Gaytha Langlois, professor of ecology at Bryant College in Smithfield, Rhode Island. "But then they find that the new equipment or process really is more efficient and that there are all kinds of savings to be had."
Examples abound. Everyone talks about dreaded holes in the ozone layer -- but the fear is even greater for plant managers who find that some of the chemicals with jaw-breaking names that they have used for years may be making those holes wider.
Until last year, the Roanoke, Virginia, factory of ITT Industries, a diversified manufacturer, used an inert, nontoxic compressed gas called sulfur hexafluoride to test tubes used in the night-vision devices it makes for the military. Then Usha Wright, ITT's director for environment, safety and health, put sulfur hexafluoride on a list of ozone-depleting gases that she insisted the plants eliminate.
Its hand forced, the Roanoke plant started trying other gases instead. It settled on nitrogen, which worked as well, did not deplete ozone and cost US$500,000 a year less to buy and to handle. Wright said many other ITT plants had received similarly pleasant surprises from other environmentally inspired substitutions.
"We haven't tallied up the numbers, because we did not include cost reductions as a goal," she said. "But it looks like a lot of plants are going to realize overall savings."
For some companies, the benefits come not only in savings but also in sales. You know those thin slabs of wallboard that are increasingly used instead of plaster in building new homes? There is a chance that they started out as scrubber waste.
A few years ago, the Tennessee Valley Authority, the largest public power utility, switched to new air pollution control equipment that, although much more expensive, yielded powdery residues instead of the gooey ones produced by its old equipment. The TVA's aim was to end up with a substance that would be easier for its on-site landfill to handle.
The results have been much better than that. The utility now sells the 1.2 million tonnes of the powder, calcium sulfate, that it generates annually to a company called Synthetic Materials, which turns it into gypsum, the main ingredient in wallboard. Most of it is bought by Temple-Inland, a wallboard manufacturer that has set up shop at the TVA's largest plant, in Cumberland City, Tennessee. Synthetic Materials sells the rest on the open market. When gypsum supply exceeds demand, the TVA dumps the powder on the landfill; when demand exceeds supply, Synthetic Materials dips into the landfill for more.
Cherie Miller, the TVA's byproduct specialist -- a title created just 11 months ago -- said the arrangement added US$3 million to the TVA's coffers last year. That is on top of the US$5 million or so that the TVA has been gleaning from selling other wastes like fly ash, for use in concrete, and boiler slag, for use in abrasives. "Marketing byproducts has really become a profit center here," Miller said.
Elsewhere as well. Several other utility plants, including the Palatka, Florida, operations of the Seminole Electric Cooperative and a Shippingport, Pennsylvania, plant of FirstEnergy are selling gypsum for wallboard, too.
Sometimes, a little bit of internal sleuthing can turn a company into its best customer for its own waste
Last year, an alert waste-plant operator at Textron's Bell Helicopter unit in Fort Worth, Texas, looking for ways to reduce the amount of messy sludge left over when Bell cleaned up its process water, noticed that the sludge always seemed to be a lot lighter in color than he would have expected.
He guessed that a lot of magnesium hydroxide, a pure white powder that Bell used for electroplating, was moving through the process unused. So Bell conducted tests and found that it could pump the sludge back into its electroplating process three or four times before it needed to be dumped. Bell saved US$100,000 last year just by dumping less sludge and buying less magnesium hydroxide.
"We wanted to stop landfilling hundreds of tons of sludge, but we wound up solving an internal inefficiency," said Donald L. Legg, Bell's director for environmental and industrial safety.
With a variety of forces putting ever more pressure on them to clean up their acts, companies might well hope that their environmental projects yield many more such hidden bounties.So-called socially conscious investing has been growing in popularity in recent years, as more investors include environmental performance as a factor in picking stocks. And many companies -- Procter & Gamble is a notable example -- use such performance as a criterion in choosing suppliers. Banks are taking potential environmental liabilities into closer account when they decide whether to make loans. Insurers, too, are insisting that companies prove that they are running clean shops before they issue policies covering environmental accidents.
And some customers are pushing their own environmental problems into their suppliers' court. A couple of years ago, customers of the Xerox Corp started asking the company to help them dispose of excess toner from their Xerox machines. Customers for the most expensive copiers had the influence to make that request more of an order -- a pretty tall order.
"It was costing us half a million a year just to collect and transport the stuff," said Jack Azar, vice president for environment, health and safety. So Xerox's chemists spent a hefty chunk of their research budget to learn to incorporate the toner waste into new toner. The company still has to pay for collection and transportation, but it is saving about US$800,000 a year on new toners for expensive machines.
Recycling expansion
This year, Xerox will expand the recycling program to toner waste for less-expensive copiers.The Internet is also making corporations more sensitive to environmental issues. "Environmental groups have become truly sophisticated in using the Web to move information to millions of people literally overnight, and to attack companies on a global scale," said Carol M. Browner, who headed the Environmental Protection Agency under President Bill Clinton.
For example, Greenpeace wanted the Coca-Cola Co to stop using hydrofluorocarbons, a heat-trapping greenhouse gas, as a refrigerant in Coke machines. During the Olympic Games in Sydney last year, the Australian chapter of Greenpeace put sticker designs on its Web site that showed polar bears on melting ice caps, and encouraged site visitors to download them and plaster them on Coke machines. Many did so -- and sure enough, Coke soon announced it would phase out use of the gas. Coke has always said it planned to do so anyway, "but Greenpeace really gave them an awful time," Browner recalled.
The switch to a Republican administration in Washington may spur many more such attacks. Many environmentalists worry that their issues now have low priority in the federal government, notwithstanding the EPA's recent decision to force General Electric to dredge the Hudson River for PCBs, or polychlorinated biphenyls. Christie Whitman, the EPA administrator, declined to be interviewed. "The environmental movement was deflated in the 1990s because people thought Bill Clinton was an environmental president," said Andrew Hoffman, assistant professor of management at the Boston University School of Management, who has written about corporate environmental activity.
"It's being ignited again in opposition to George W. Bush."
Alan Metrick, a spokesman for the Natural Resources Defense Council, said that 100,000 more people had joined his group since Bush was inaugurated.
"Americans feel this government will not protect their air and water, and they are energized to a degree we haven't seen in years," Metrick said. "We now have more than half a million members, and that means more funds to take on more cases."
But those are not necessarily fighting words. Few executives today dismiss environmentalists as hippie tree-huggers, as they might have during the 1970s. And fewer environmentalists view business executives as the devil incarnate. Companies and environmentalists are now as likely to be partners as adversaries.
Starbucks gives Conservation International equal credit for the shade-grown coffee project. The Natural Resources Defense Council worked closely with Dow Chemical to reduce pollution at Dow plants in Midland and has offered its services to other companies. (So far, to Metrick's dismay, there have been no takers.) The Alliance for Environmental Innovation, a unit of the better-known Environmental Defense, helped McDonald's figure out a replacement for its much-criticized polystyrene clamshell packaging in the mid-1990s and more recently helped United Parcel Service develop a reusable overnight mailer.
Advocacy groups have learned to incorporate the corporate focus on profits into their environmental pitches. The Alliance for Environmental Innovation persuaded Federal Express to promise carmakers that it would buy more fuel-efficient, cleaner-driving trucks, even if they cost a little more.
"We realize that the auto companies need committed customers to justify what will probably be a very expensive R&D project," said Gwen Ruta, the director of the alliance.
Reaping benefits
Many companies are reaping the benefits of environmental projects that they started in the 1990s, when regulatory scrutiny seemed more intense, and when the booming economy made potentially costly projects more palatable.
Consider Corning Inc. Its plant in Canton, New York, which makes super-pure glass used in manufacturing computer chips, was within the legal limits set by New York state for emissions of hydrochloric acid, but company executives figured that the state would soon tighten the rules. So, in 1999, the plant started making a chlorine-free glass.
The new glass-making chemicals are no panacea -- for example, they freeze at 0 degrres fareinheit where where winter temperatures can plunge to 5 below. "Researching it, trucking it in, building new storage bins and handling equipment -- it cost well over US$5 million, and frankly we didn't enjoy doing it," said Raymond F. Leinen, manager of Corning's semiconductor materials business.
They are, however, enjoying the results. Glass samples that Corning has been monitoring for more than a year remain free of distortion; the chlorinated glass would have warped slightly by now. Corning hopes that the improvement will help the company gain market share. "We won't raise the price of the new glass, but this subtle property may well get more semiconductor companies to buy it," Leinen said.
Sikorsky Aircraft, too, may be getting some new bragging rights from an environmentally induced product change. Last year, Sikorsky, a unit of United Technologies, switched to a new kind of paint for its helicopters, because the old one was sending ozone-depleting fumes up its factory stacks. The change cost a bit in retooling -- but, it turns out, the new paint can be applied with a thinner coating. That means that less paint is used, and that the finished helicopter weighs less -- a fact that Sikorsky is trumpeting to military and commercial customers alike. "Saving even an ounce on a helicopter is a big deal," said Leslie Carothers, vice president for environment, health and safety at United Technologies.
But even as the environmental pressure on companies heats up, the number of surprising benefits from environmental programs may dwindle. That is because more and more companies are installing formal programs to ferret out savings at the outset. Dow Chemical now routinely applies complex statistical analysis to environmental projects to ensure that its businesses are wresting the maximum economic benefits from meeting the company's anti-pollution goals. Dow has even assigned dollar amounts to intangible benefits like community good will or employee satisfaction, then plugs those numbers into its formulas for evaluating environmental projects.
"Historically, projects were discussed in either the language of economic value or of environmental performance, but we've figured out how to translate from one language to the other," said Smolik of Dow.
Often, corporate environmental officials are using such translation to persuade plant managers that profit, not environmental benefit, is the primary goal even when it is not. For instance, in March, William Blackburn, vice president for environment, health and safety at Baxter International, the medical products maker in Deerfield, Illinois, pulled together a group of purchasing and engineering people to discuss ways to reduce energy use. They are now exploring several. "My goal was to reduce emissions of carbon dioxide, the only greenhouse gas we emit," he said. But he recognized that managers with bottom-line responsibilities would be more attracted to cheaper energy bills. "Environment is heart and economics is head, and to motivate everyone, you need to combine the two."
Indeed, Blackburn has used that psychology to persuade profit-oriented plant managers to revisit environmental problems that they had thought were solved.
The plant managers figured out how to turn the waste into fuel and fertilizer, which the university now uses. The project cost Baxter US$350,000, but it cut disposal costs to zero.
TYPHOON: The storm’s path indicates a high possibility of Krathon making landfall in Pingtung County, depending on when the storm turns north, the CWA said Typhoon Krathon is strengthening and is more likely to make landfall in Taiwan, the Central Weather Administration (CWA) said in a forecast released yesterday afternoon. As of 2pm yesterday, the CWA’s updated sea warning for Krathon showed that the storm was about 430km southeast of Oluanpi (鵝鑾鼻), Taiwan’s southernmost point. It was moving in west-northwest at 9kph, with maximum sustained winds of 119kph and gusts of up to 155kph, CWA data showed. Krathon is expected to move further west before turning north tomorrow, CWA forecaster Wu Wan-hua (伍婉華) said. The CWA’s latest forecast and other countries’ projections of the storm’s path indicate a higher
SLOW-MOVING STORM: The typhoon has started moving north, but at a very slow pace, adding uncertainty to the extent of its impact on the nation Work and classes have been canceled across the nation today because of Typhoon Krathon, with residents in the south advised to brace for winds that could reach force 17 on the Beaufort scale as the Central Weather Administration (CWA) forecast that the storm would make landfall there. Force 17 wind with speeds of 56.1 to 61.2 meters per second, the highest number on the Beaufort scale, rarely occur and could cause serious damage. Krathon could be the second typhoon to land in southwestern Taiwan, following typhoon Elsie in 1996, CWA records showed. As of 8pm yesterday, the typhoon’s center was 180km
TYPHOON DAY: Taitung, Pingtung, Tainan, Chiayi, Hualien and Kaohsiung canceled work and classes today. The storm is to start moving north this afternoon The outer rim of Typhoon Krathon made landfall in Taitung County and the Hengchun Peninsula (恆春半島) at about noon yesterday, the Central Weather Administration (CWA) said, adding that the eye of the storm was expected to hit land tomorrow. The CWA at 2:30pm yesterday issued a land alert for Krathon after issuing a sea alert on Sunday. It also expanded the scope of the sea alert to include waters north of Taiwan Strait, in addition to its south, from the Bashi Channel to the Pratas Islands (Dongsha Islands, 東沙群島). As of 6pm yesterday, the typhoon’s center was 160km south of
SECURITY: The New Zealand and Australian navies also sailed military vessels through the Strait yesterday to assert the right of freedom of navigation The Japan Maritime Self-Defense Force on Wednesday made its first-ever transit through the Taiwan Strait in response to the intrusion by a Chinese reconnaissance aircraft into Japan’s sovereign airspace last month, Yomiuri Shimbun reported yesterday. The Japanese news platform reported that the destroyer JS Sazanamisailed down through the Taiwan Strait on Wednesday, citing sources in the Japanese government with knowledge of the matter. Japanese Chief Cabinet Secretary Yoshimasa Hayashi declined to comment on the reports at a regular briefing because they concern military operations. Military vessels from New Zealand and Australia also sailed through the Strait on the same day, Wellington’s defense ministry
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