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Green – just hype or source of real innovation?

I just read a humorous WSJ article from Penn Jillette (Yes – of Penn & Teller fame) on the death of Hummer. No surprise, but he said something quite provocative: “American auto manufacturers are thinking in terms of electric vehicles so the disgusting smoke will come out of coal smokestacks many, many miles away, and not right out of the tailpipe where you can see it, smell it and enjoy it.”

Reading that, I realized what we hear about the environment is too often fueled by media hype and fashion – not science or practicality. Hybrid has become a badge of honor, even for highway driving where carrying that extra battery weight actually uses more fuel. And we’ve all seen wanna be green celebs forgiven their other indulgences because they own Priuses … yeah, right.

But there is a case for green innovation with a real impact. So, let me tell you a story. One about a leader that saw how green could make a difference – both for the environment and the bottom-line.

Today, the harm that CFC’s do to the ozone layer is well understood and wherever possible these man made chemicals have been replaced. But it wasn’t that long ago that CFC’s were the propellant of choice for the billions of aerosol products sold every year.

Then in 1975, Sam Johnson broke with the industry norm and announced an innovation that got his competition fuming, so to speak. Johnson Wax was stopping the production of CFC aerosols, and it was doing so all over the world – not just in the US and Sweden where regulations were coming in a few years. Many saw this innovation as a monumental commitment to protecting the environment.

Having worked for the company, I can tell you that protecting the environment is definitely a core value. But I can also tell you that protecting the environment adds to the bottom line. And not just because of good public relations. In fact, eliminating CFC’s was eventually a cost savings because butane was cheaper.

And so it went over the years of Sam’s leadership, a culture of protecting the environment also became a culture of eliminating waste, whether from incinerating waste solvents to capture their energy content or buying landfill gas that would have otherwise been vented or flared.

Sustainable innovation practices like this eliminate waste, and while reducing environmental impact, have the added benefit of reducing costs and increasing profits. Examples from other industries include:

  • Use of office waste paper in corrugated box making
  • Walmart’s call for reduced packaging materials in everything it sells
  • Raising industrial boiler efficiency from 75 to 95%

And sometimes they create entirely new business opportunities such as:

  • Mini-mills that use recycled steel rather than iron ore
  • Paints and inks that use water as a solvent instead of volatile organic solvents
  • UV inks and digital print toners that use no solvent at all
  • Powder coatings that use no solvent at all

When you think about the real environmental progress that has been made and the progress we still need to make, ignore the hype. Instead, remember Sam Johnson’s vision and how innovations that reduce waste are a sustainable practice that benefits the environment and the bottom line.

So what do you think?

{ 4 comments… add one }
  • Michael Kinkley April 20, 2010, 12:43 pm

    Mr Dalton:

    "Green" is really a label that, unfortunately, can mean what the user wants it to mean.

    The example you give of eliminating CFCs became an economic decision because butane was cheaper. How far would the company have gone if the next best alternative was ten times as expensive, in the absense of regulation that made all competitors equal?

    The best example of applying the "green" concept that I have seen is Chicago's "Green Housing" program. Many if not most of the criteria make economic sense, that a company could adopt without thinking twice about. Some criteria might also make economic sense for the community, if not the company. such as controlling run-off. There are a few criteria that actually, exclusively benefit the environment. By requiring or incenting companies to apply the criteria, I imagine that higher volume demand will lower the cost of "green" products so that they eventually will become the norm. It also gets people to change their thinking, their paradigm, about how to design things.

    I am not opposed to win-win-win formulas, but we should be clear about the motivations involved. "Green" is just a label that has marketing advantages, but because the definition is arbitrary, it has little real power. As I understand it, the Chicago Green Housing Program sets a benchmark that, if met, enables the compliant company to advertise it has met or exceeded Chicago's standard. That has marketing value. It can only be said to protect the environment if the standard causes more environmentally protective actions than would otherwise have occurred. Who is doing the study to prove that this actually happens?

    Mike Kinkley

  • Charles Warner April 20, 2010, 4:15 pm

    Unfortunately, "Green" and "Environmentally Friendly" are terms that have been so abused that they are not only totally meaningless, they will also turn me off a company/product where the terms are used- today it means, "this is more expensive, but at least you can pretend you are helping the environment". Sam Johnson's model may or may not be a good example- what is the environmental impact of releasing all that butane into the atmosphere? What is the half-life of the butane released, and what are the final products? I suspect CO2 is at least one of the products of decomposition of butane…

    K-Mart's model is a bit more realistic- reduce waste at the outset. What is really needed is a reduction in consumption across the board- which is a paradigm shift I doubt many are going to be willing to accept- so we need to pretend we are doing something by slapping "Green" labels on innocuous products. If you want me to buy your product, call it "Yellow" or "Blue" or ANYTHING but green!

  • michael April 26, 2010, 1:29 pm

    "green"…. rhymes w/ "lean"….. is a marketing scam…..

    great for consultants, but not much substance…. and not hardwired to any meaningful measure and / or supporting structure for the 3 fundamental conditions required of any enterprise…..

    Michael

    • Michael A. Dalton April 27, 2010, 5:43 am

      Michael – it would be helpful to know what you think the 3 fundamental conditions are, but the only green projects that are sustainable are those which address the 3 requirement for improving a companies results and are hard-wired to the most important measures for running any business – They either 1) reduce operating expense, 2) reduce investment (working capital) or 3) increase cash flow from sales.

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