2012 Conference: Measurement and Engagement to Create Green from Sustainability
“It isn’t easy being green,” said facilitator Richard Pringle of GrantStream opening the “Green is Green” panel with Kermit the Frog’s most famous quote. The panel, featuring Bloomberg LP’s Lee Ballin and Riva Krut from Praxair, Inc. showcased how reducing environmental impact by measuring results and engaging employees can be hard work but also be profitable.
Sustainability at Bloomberg LP is about measurement, according to Ballin, sustainability manager for the company. “You really need to measure your impact and identify where your opportunities are,” he said. The leader in financial market data most recognized for the “Bloomberg Terminals” that scroll spot data on global markets at company sites around the world takes results seriously. Sustainability initiatives currently cover 22 operating departments to source approximately 350 projects that reduce costs annually.
The team uses three criteria to evaluate projects: financial, environmental and cultural. All projects must rate high on two of the three with heavy emphasis on financial using a 15% internal rate of return, a payback of 5 years or less, and an operating expense structure that requires savings of $1.25 for every $1 invested in sustainability. “What’s been really successful is that we bundle projects together – two lighting projects with good returns bundled with a water project,” said Ballin of a strategy to implement a portfolio of projects.
Nearly 80% of employees believe sustainability is a core part of firm culture, the firm has reduced energy by 7 million kWh just by turning off lights, and carbon emissions remain at 2007 levels (minus acquisitions) even with approximately 30% growth in revenue. “Despite growth in customers and revenue, we have not adversely affected emissions, and we’ve saved the firm $25 million.”
Driving financial performance through sustainability is also central for Praxair. “Praxair makes money by increasing productivity within company, we make margin by reducing our own costs,” said Riva Krut, director of sustainable development for the $11 billion specialty gas producer (carbon dioxide for soda, argon for window insulation, and much more). The sustainability division teams work with operations to quantify the environmental impact of lean cost reduction projects. “If we can be responsible for 5-6% margin creation, that’s a big story for stockholders.”
The company also focuses heavily on culture change and employee engagement. “If employees think the right way, they’re going to make the right decision,” Krut said of one of her guiding principles. In 2009, her team rolled out a project to reduce employee carbon emissions 20% through small actions like waste minimization and car pooling in offices with over 30 employees. “We wanted to establish a feedback loop that quickly rewarded any action in the right direction,” she said. They created an easy to use spreadsheet that tracked results and reported office progress toward goals.
In the process, they received support from their vendors, specifically on paper use and reduction. When they approached Office Max and Staples about double sided printing, they found solutions that met multiple goals. “Our vendors offered a solution that was cheaper and helped reduce environmental impact,” Krut said. They reached their goal quicker than expected and are already setting more ambitious targets for the next few years.
Pringle concluded with cross-cutting themes from both panelists. “It’s productivity via sustainability and not the other way around,” he said. Neither panelist claimed it was easy work, but when tied to measurement and employees, it can be profitable.