Environmental Opportunities, Inc.

Ask the Experts

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Courtesy of Environmental Opportunities, Inc.

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A monthly column on strategic EH&S management, sustainability and Responsible Care Management Systems by experts who have spent time in both the trenches and the boardrooms.

This month's topics:

Benchmarking Followup : Last month's column included a question back to you, our readers, asking for your additional suggestions on how a reader's company (in the lubrication fluid blending/packaging market) might go about benchmarking environmental performance and metrics across the industry, including peer competitors, for mutual environmental performance improvement.

While we offered a few suggestions, the reader would still like to hear yours, as well as if any lubrication fluid blenders/packagers might like to participate in a cooperative one-day environmental performance benchmarking workshop. I have been asked to serve as moderator to ensure peer confidentiality and anti-trust protection.

As before, helpful suggestions will be listed in a future column!

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How can a small company get suppliers to provide affordable sustainable solutions?

Steve: Not easily, as you just don't have the purchasing prowess, or public relations value, of a government or large, multi-national company. You can, however, take small steps within your control:

•  Pay more. Realize that without the purchasing power you may be an expensive customer for that airline ticket, electricity, hotel room, or office/maintenance supplies. Being willing, or not willing, to pay that higher price will say much to your employees about your commitment to your values.

•  Take a stand. As I noted back in April 2004, my office used Great White Multiuse 24 paper with 30% postconsumer recycled content. Lately, it's been very hard to find without ordering from a regional distributor and paying outrageous shipping cost. So, searching for alternatives without the added shipping cost, I found Staples brand ‘Printing' paper. It has the same specifications, although a bit brighter, and is readily available either at the store or by phone/web with free shipping. Since it's only available in half-cases, though, it's quite expensive to purchase full case equivalents. So, we:

•  Short term: Buy when it's on sale (which brings it back down to regular case price); and

•  Longer term: Began discussions with the area store manager and regional buyer to get Staples to begin offering the product in lower-priced full cases. While not a major customer, we made it clear that we would like to remain their customer but could not see ourselves buying our non-paper supplies at one store and office paper at another (hint, hint). We'll keep you abreast of our effort in a future column.

•  Do what you can. Take pride in what you can do, and keep what you can't do on the ‘to do' think list. Keep your eyes and ears out for new solutions and alternatives. Surrender for those you can't do, but only for the time-being.

Like any small company, you can't do some of the things that larger companies can do. Remember, though, that you CAN do lots of things that they can't. Seek your opportunities, leverage your small company strengths and tell others in your same situation through business network and personal contacts, listserves, blogs, etc.

If you have a success that you'd like to share with others, let us know! We'll be glad to pass it along.

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Postscripts: The Story Behind The GE Story. The renowned radio announcer Paul Harvey had a few catchy phrases for the unique features on his show. One was called ‘The Story Behind The Story'. This segment is where he would look at a news story not only for its ‘current events' facet but for its deeper meaning, cause and effect. He went beyond the ‘what' to the ‘why' and the ‘lessons learned'.

This feature came to mind as I was reading Alan Murray's recent column, ‘Will Social Responsibility Harm Business?', published in the May 18 th issue of The Wall Street Journal (WSJ) . In it, Mr. Murray questioned why General Electric would do something like issue a “Citizenship Report” and take self-imposed steps to restrict its emissions of greenhouse gases. He reminds readers of the Adam Smith posit that the primary mission of a corporation is to make profits, and that will be the vehicle that leads to social improvement. Of course, this glosses over minor things like Love Canal , PCBs in the upper Hudson River , Enron, etc., but who's counting?

As a regular CNBC viewer and occasional WSJ reader, I appreciate Mr. Murray's financial insights and commentary. I think, however, he missed the entire point on this one. As I see it, GE's recent actions are founded on two fundamental realities:

•  GE's historical environmental reputation has been one of a laggard, at best. Environmental issues have been handled by lawyers with a ‘we'll fight you all the way' attitude and ‘we won't do anything we aren't absolutely forced to do' approach. This got them what might be one of the biggest river cleanup orders, and associated operational expenses and required liability reserves, ever issued.

•  Company revenue and profit growth has slowed the last few quarters; Six Sigma seems to have just about run its course. Selling its slower growing insurance units and attempts to instill a new ‘anything for the customer' employee culture might help, but will take the company only so far. The company had to do something else.

So, the company has begun to reshape its image through its Citizenship Report and leveraged its strengths by recasting its energy and transportation segments into something more than merely energy and transportation. This reshaping also fits in well with its water treatment and services business. To do these and NOT take steps to address social responsibility and greenhouse gas emissions would provide the ultimate business disconnect between what a company says and what it does. Those who don't care won't care anyway; those who do care would notice the disconnect right away, eliminating the credibility of all the company's other efforts.

If Mr. Murray had looked into the story behind the story, he would have seen that this integrated approach displays smart business sense. As Mr. Murray noted, GE President Immelt indicated that the report and self-imposed greenhouse gas restrictions will have ‘de minimis impact on our investors'. While still a ‘cost', they at least supplement and enhance GE's other strategic efforts – sort of like an internal capital investment that generates future market positioning and/or profit. For GE NOT to do so would definitely have a significant, and negative, impact on its investors.

And yet, GE's new approach is more than that. It's a recognition that this can be a strategy to a) improve company image and b) bolster and grow certain targeted segments of its business, e.g. increase revenue and profit for – that's right – shareholder benefit. In addition, maybe now GE stock will pass the screens of the many socially responsible funds, leading to increased demand for its stock, thus driving its price higher.

Both Adam Smith and Paul Harvey would have been very, very proud.

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Steve Rice (973-966-5505) is president of Environmental Opportunities, Inc., a strategic EH&S management and project support services company in Florham Park, New Jersey. He has 30 years of executive EH&S leadership experience, including 25 years with both Exxon and BASF, and is an ACC- authorized Responsible Care Management Systems (RCMS) auditor.

Copyright 2005, Environmental Opportunities, Inc.

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