“Green IT”: Why Environmental Sustainability and Profits Go Hand in Hand

A significant number of the successful companies named to this year’s CIO-100 list have also been recognized for leading earth-friendly initiatives. These companies are learning something that may startle those that have not yet edged toward greenness: More and more, profitability and environmental consciousness go hand in hand. And as energy supplies dip and proposed solutions lead to bitter political fights, good green ideas couldn’t come at a better time. The following six environmental innovations are ideas you can use from some of our 2001 CIO-100 honorees.

Don’t Wait to Be Told In 1975, S.C. Johnson & Son?maker of familiar household products such as Shout, Windex, Ziploc and Edge?took a radical step and eliminated chlorofluorocarbons (CFCs) from its aerosol cans. It did that three years before CFCs were outlawed in the United States. Such forward thinking saved the company money because it didn’t have to scramble to meet regulatory mandates. Since 1990, S.C. Johnson has reduced volatile organic compounds (VOCs) in its U.S.-produced products by 33 percent. When the company moved from a VOC-based to water-based Raid in 1994, the switch accounted for a 7,500-ton reduction in VOC use?and an annual cost savings of more than $1 million. “We save money when we are reducing bad materials and increasing the use of good ones,” says Cynthia Georgeson, director of worldwide corporate public affairs.

Look for Fresh Answers In 1991, Patagonia?the Ventura, Calif.-based maker of outdoor clothing and climbing equipment?studied its four main fibers (polyester, nylon, cotton and wool) to determine their environmental effects. What it learned about cotton was disturbing: Its production relied heavily on pesticides, herbicides, chemical fertilizers and defoliants. “Cotton has a huge negative environmental impact,” says Jil Zilligen, vice president of environmental initiatives. When faced with the study’s results in 1994, the Patagonia board promised that by 1996 it would transition to 100 percent organic cotton. The company’s fabric development and production teams were charged with figuring out whether organic cotton could provide the same quality products as conventionally grown cotton. If not, Patagonia would stop making cotton products altogether?quite a statement for a company heavily dependent on its apparel sales. “That gave everyone the motivation to figure it out. It affected every single person,” says Zilligen. Once Patagonia made the commitment, it had to convince its fabric suppliers to change to organic cotton. Some suppliers made the switch, others didn’t and lost Patagonia’s business.

Continually Question In 1999, Memphis, Tenn.-based FedEx replaced its packaging with an envelope made from 100 percent recycled material (35 percent of which is postconsumer). That effort alone, the company says, has kept 7.9 million pounds of solid waste from going into landfills and decreased total environmental effects from production by an average of 30 percent. FedEx worked environmental concerns into its mission statement over time. “A lot of companies do this because they had some hiccup or issue where there was a violation,” says Mitch Jackson, managing director of corporate and international environmental programs. “We didn’t have that.” In 1998, United Parcel Service (UPS) went after a reusable next-day-air envelope and incorporated increased levels of recycled material into its other packaging?and estimates say that those moves save more than 2,200 tons of trees every year. “We’ve never assumed that the way things are is the way they have to be,” says Linda DiSantis, corporate compliance manger for UPS.

Get Ahead of the Curve In 1998, Patagonia officially incorporated the environment into its core mission with this pledge: “To use business to inspire and implement solutions to the environmental crisis.” Among its goals was switching to renewable energy. “In 1998, we did a lot of research in anticipation of California deregulating,” says Patagonia’s Zilligen. Today, Patagonia uses energy from freshly constructed renewable energy plants in its headquarters and four California stores. Wind powers the Denver store. Solar powers the customer service center in Reno, Nev.

Atone for the Past “Let’s face it, we had a lot of improving to do,” admits Samuel L. Smolik, vice president for environment, health and safety for Dow Chemical. Since 1996, Dow has published an annual report on the state of its 10-year environment, health and safety goals set in 1995. The most recent update, issued in May, claims the company reduced waste-to-production ratios by 25 percent between 1994 and 2000, chemical emissions by 43.5 percent and emissions of ozone depletors by 72 percent. In 1996, Dow recruited five local environmental activists to take part in an initiative to reduce toxic emissions at its Midland, Mich., site. By 1999, the project had reduced air and water emissions by 43 percent and reduced the waste stream by 37 percent with a potential annual savings of $5.4 million. In 2000, Dow gave a $2.5 million grant to the University of Michigan to establish a professorship in sustainable science, technology and commerce.

Embrace the New Although FedEx’s business relies on gas-guzzling trucks to move its customers’ packages, it is working to change that. Its current fleet of delivery trucks includes 570 EPA-certified low emissions vehicles. And, working jointly with the Boston-based Alliance for Environmental Innovation, FedEx has put out an RFP for a hybrid electric vehicle that will reduce air emissions by 90 percent and increase fuel efficiency by 50 percent. The goal is to have energy savers enter the fleet in 2005 and eventually replace FedEx’s fleet of nearly 40,000 vehicles.

Are you Experienced?While the green approach ultimately benefits the environment, companies would not be taking such action if it didn’t benefit their own bottom line. “In large part, companies have begun to understand that there is a connection between a good environment and good business results,” says UPS’s DiSantis. Those results can mean a better relationship with customers. “Our consumers have told us and others consistently for the last 20 years, ’We expect you to deliver what you’re delivering in the most responsible way you can,’” says S.C. Johnson’s Georgeson.

But the bottom line is still the bottom line. “We have to make money to stay in business, and we have to be successful in conventional business terms in order to influence other businesses,” says Patagonia’s Zilligen. “We’re a successful, profitable business trying to figure out how to be successful under a broader definition of success.” That’s innovation for two good causes: your own and the planet’s.