Not enough green to tackle green?

Adopting environmentally friendly practices and technology is often presented as an expensive proposition. Fears of added costs almost derailed European climate regulation, as countries feared that the current financial crisis has created circumstances in which any additional expenditures were simply not viable. But companies that presented at the recent EPA Climate Leaders meeting suggest the situation is more complex; many efficiency efforts are big financial wins, but that renewable power generation may have to take a back seat while Wall Street cleans up its mess.

Efficiency pays for itself

Speaker after speaker emphasized how well efficiency was working for their company on a financial basis. Perhaps the most compelling version of it came from Michael Mollnar of Cummins, which manufactures heavy equipment. Describing efficiency efforts, he said, "it's almost embarrassing what some of these returns are, because we never looked at these things"—he then went on to name returns in the area of 300 percent for some projects. Referring to the frequent description of efficiency projects as "low hanging fruit," he described the inefficiencies at Cummins as, "fruit that's sitting on the floor, that you're stepping on."

He wasn't alone in being excited about the returns. Over the past eight years, Intel has invested $24 million in conservation projects; the annual return from that work is now up to over $44 million. Even small efforts can help when magnified by the sheer size of a large company. John Fojut of Kohl's department stores described how a store manager suggested turning off the stores' wall lights during the first hour of business, when few people shopped anyway. Rolled out in a thousand stores, this simple method now saves the company $500,000 a year. A representative of Exelon, a power generating company, estimated that targeting LEED green building certification added less than five percent to construction costs, and would pay for itself quickly.

Aside from having fantastic returns, the efforts don't seem to require creating a new bureaucracy. Fojut said Kohls added a single staff member for high-level planning like LED lighting rollouts, and otherwise simply encouraged its staff to consider energy efficiency part of its job; many of its ideas came up from the ranks, who were much better placed to identify inefficiencies. Cummins added a total of three engineers with energy backgrounds to its staff and used them to devise an evaluation procedure that helps the company identify those projects that will have the highest return at a reasonable cost.

Many of the inefficiencies identified were pure losses. Owens-Corning hired an outside contractor to scan its manufacturing facilities in infrared, which allowed them to identify a number of natural gas leaks. In generating its carbon footprint, Cisco found weird numbers coming out of its Ankara sales office. Its electric meter turned out to be broken, and they were being billed for power they'd never used.

Outside of efficiency, green efforts are a harder sell

The efficiency efforts may cost money, but for now, the returns are high enough that, if anything, tough financial times make them even more appealing. The same doesn't necessarily hold for other climate initiatives. Intel described how changing their manufacturing process to use fewer chlorofluorocarbons made business sense only in that it, "avoided potentially painful regulations." Corning faced a similar dilemma in regards to CFCs in its process. Ultimately, they had to retool the entire process and buy new equipment to roll it out, which they're doing only slowly. They hope to make cash by licensing the technique.

The situation was also mixed when it came to companies getting their own renewable power in place. Corning has placed photovoltaic systems on two of its facilities, but in most cases, the companies are preferring to outsource the risk. Two companies talked about using natural gas generated at landfills in their facilities, but in both cases, a specialized company actually handled the harvesting and processing of the gas at the landfill.





Large, flat roofs offer opportunities

Kohl's, having a lot of roof space available at its retail outlets, is going for photovoltaic installations. But they're essentially leasing their roof space to a company that owns and runs the panels in return for having a guaranteed (and low) rate on the electricity they produce. Aspects of this make sense from the business perspective—these aren't power companies, and there's no reason for them to go into fields outside of the business they're in. But it does suggest there are significant worries that renewable power sources aren't quite there economically, and fluctuations in fossil fuel prices continue to change the equation far too often.