Cutting Water Use – It Starts by Keeping Score

By John Schinter, Executive Director of Energy at AT&T

When I was hired in 2009, my task was – and still is – to improve the way AT&T manages energy use. The company understood that inefficient energy use was having an environmental impact and costing us money. In 2010 and 2011, we found energy savings to the tune of $86 million annually. 

During my time on the job, another resource has caught my attention – water. The fact is that water and energy are connected. As a society, we use a tremendous amount of water to generate electricity and huge amounts of electricity to clean and pump our water.  While the relationship between water use and electricity production varies by region, a look at some data from Texas is telling:  approximately 595,000 megaliters of water annually – enough water for over three million people for a year – are consumed to cool the state’s thermoelectric power plants. At the same time, each year Texas uses enough electricity to power water and wastewater systems for about 100,000 people. (Synthesis, The Energy-Water Nexus in Texas).

The relationship is true at the building level, too.  In fact, the EPA estimates that a full quarter of the daily water use of U.S. office buildings is used in cooling systems. We’ve found that cooling towers can use 50% or more of the water in our technical spaces like data centers because of the relatively small number of building tenants and all of the heat generated from servers and other equipment. Through a company-wide water audit, we found that the largest percentage of our 3.4 billion gallons of water per year is for cooling our buildings with cooling towers.

While water is cheap now, and an effective way of cooling today, McKinsey estimates that in just 20 years, demand for water will be 40 percent higher than it is currently, which means that the cost of it is likely to increase as well. Companies need to look at their water footprint today to find opportunities to save in the future, especially those with operations in drought-prone regions.

Source: WRI: http://aqueduct.wri.org/atlas

To address our cooling tower related energy and water use, we announced this past spring a project that we’re pursuing with Environmental Defense Fund (EDF). The aim of the project is not only to find efficiency opportunities and tools for our own operations, but to develop best practices that can be applied to companies regardless of size and geographic location.  While we’re still plugging away at this project, we have seen real and significant signs of potential for water and energy reductions, in some cases between a 30% to 40% reduction in water use.  In an environment where we’re constantly challenged to build competitive business cases, these types of savings are compelling.

Water Score Card

Before companies can take steps to address their water use, however, they must first understand it. As part of our work with EDF, we’ve developed a toolkit for companies to get started.  The heart of the toolkit is a Water Score Card Guide, which shows how a company can develop its own Water Score Card, a tool I’ve used many times to engage my organization in creating visibility and accountability for efficiency programs.  The Score Card gives facilities a score for their water efficiency efforts by evaluating water usage and prioritizing the opportunities for water conservation.  As we’ve found, it’s also a great way to set the foundation for water program efforts.

The Guide is based on the lessons we learned in creating our Water Score Card. By deploying the Score Card at 125 sites, AT&T has been able to identify the most significant uses of water and identify improvement opportunities. Using a similar Score Card in our energy program helped us realize $86 million in energy savings by tracking 8,700 projects in 2010 and 2011.

We’ll keep working on our side, so stay tuned later this year to hear about our findings. In the meantime, get started! Visit the toolkit at edf.org/attwater and see what opportunities might lay ahead for your company in tackling your water use. You never know what you might find.

Carlyle's Annual Report Highlights $7 Million in ESG Savings

The Carlyle Group's annual report, released last week, highlights significant savings and environmental impact from the sustainability programs ongoing at Carlyle portfolio companies.  In addition, as Carlyle continues to branch out beyond buyouts it's showing an interest in integrating ESG into investment decisions in other asset classes, beginning with real estate.

Environmental initiatives have saved or are anticipated to save Carlyle portfolio companies $7 million while reducing greenhouse gas emissions by more than 31,000 metric tons, Carlyle said. This report marks the first year Carlyle has released measurable results and the third year of reporting on its environmental, social and governance (ESG) program.

We're excited to see these concrete results from the ESG initiatives that we’ve worked with Carlyle to develop in recent years.  By leveraging EcoValuScreen early in the due diligence phase Carlyle is able to create financial and environmental value from the beginning of their investment period.

The annual report describes more than a dozen portfolio companies' sustainability efforts including Yashili Group, Syniverse, RAC and Booz Allen Hamilton, with initiatives and status or outcome clearly listed — an important development for future accountability. We're particularly proud of the integral role that EDF's Climate Corps fellows have had in driving results.   Fellows have identified compelling energy efficiency opportunities at Carlyle's real estate portfolio and at specific portfolio companies including Booz, Dunkin Brands and Syniverse.

By integrating sustainability into the firm's annual report, Carlyle emphasizes that ESG is central to the investment direction and strategy, rather than a separate or peripheral interest area.

We’re excited to see Carlyle expand this effort and continue to demonstrate that sustainability can create value across multiple asset classes.

Rubicon Global Disrupts the Waste Stream through Entrepreneurism

By Elizabeth Hill, Director of Corporate and Social Responsibility, Rubicon Global

Why do we throw trash away? Because we have already extracted the value out of a product and we do not need what is left over. What remains is usually seen as dirty or useless. It goes into the can and out of our minds.

American households throw away an average of 4.43 pounds per person, per day. That is over three-quarters of a ton of resources being buried into our soil and dumped into our oceans annually per person. Now imagine how much your restaurant chain, or your retail store–which serves thousands of customers a day–sends to the landfill each year.

The current logic of how to manage waste is backward. The system relies on hauling and storing waste in landfills. That leaves us in the position we are today: very costly waste disposal and numerous environmental impacts.

Environmental impacts of waste:

  • Pollution from methane gas at landfills
  • Contaminated land and water
  • Emissions from trucks which haul waste
  • Loss of raw materials and energy

Financial impacts of waste:

  • Cost of disposing waste, including taxes paid on landfill disposal fees
  • Loss of potential revenue from reusing and reducing waste
  • Industry norms: over-billing, fuel surcharges and price creep
  • Investment in back office administration to manage a service that is non-core to the business

The founders of Rubicon Global thought there had to be a better way to view and manage waste. They knew a huge amount of value was being neglected if not outright destroyed.

Rubicon Global turned this logic on its head by:

A) Viewing waste as a resource

B) Not owning assets (landfills, trucks, recycling operations) and instead depending on a network of thousands of strategically positioned vendors

C) Employing technology for sourcing, managing locations and collecting data

D) Reducing waste sent to the landfill and reducing the number of hauling trips made

E) Building in monetary incentives for our customers to prevent, reduce, reuse and recycle waste

Rubicon Global’s business model is based on the idea that reducing waste is not only good for the planet, but also good for business. Its market-driven approach incentivizes customers to take a closer look at their waste streams and let its experts implement innovative waste prevention and recycling solutions.  Simply put, business is the most powerful way to solve environmental and social issues.

Benefits of disrupting the waste stream:

  • Reduced environmental impact through waste prevention and increased recycling
  • Lowered costs and potential revenue from recyclables
  • Improved logistics through identification of inefficiencies in the system
  • Optimization of equipment and service frequency
  • Prevention of lost resources
  • Engagement of supply chain stakeholders and employees
  • Collection of sustainability metrics
  • Increased preparedness for coming waste and recycling legislation
  • Improved Corporate Social Responsibility
  • Additional points on the U.S. Green Building Council LEED rating system

Americans create more waste per capita than any other country in the world (after Canada)** and a great deal of that waste is a byproduct of our ingenuity and spirit of entrepreneurism. Perhaps the next frontier for entrepreneurs is answering the problems that come along with this consumption and turning these challenges into business opportunities that measure success by looking at the triple bottom line: people, planet and profit.

Let us know how your company manages waste by emailing us at business@edf.org.

Industrial Ecology: A Call for Papers

By Reid Lifset, Associate Research Scholar, Resident Fellow in Industrial Ecology, Associate Director of the Industrial Environmental Management Program, and Editor-in-Chief of the Journal of Industrial Ecology

Industrial ecology (IE) is an ensemble concept that specifies ways in which firms can and are currently starting to deal with their environmental impact. It builds on a metaphor of natural ecological phenomena to analyze and develop tools and prescriptions for industrial systems that are, for the most part, larger than a single firm. The normative goal of industrial ecology is to optimize resource efficiencies and close material loops within this more encompassing system boundary as part of the pursuit of sustainable production and consumption.

Industrial ecology encompasses a variety of characteristic concepts:

  • a systems perspective
  • an emphasis on loop closing
  • use of a life cycle perspective
  • inspiration from a biological/ecological analysis
  • enthusiasm for industrial symbiosis
  • attention to dematerialization

Industrial Ecology Tools:

  • life cycle assessment (LCA)
  • material flow analysis (MFA)
  • environmentally-extended input-output analysis

The Journal of Industrial Ecology invites you to submit articles for a special issue on Industrial Ecology as a Source of Competitive Advantage in Business by June 1, 2013. Submission of abstracts for review and feedback prior to that date, while not required, is strongly encouraged.

The goal of the special issue is to explore how the concepts and tools of industrial ecology can and do serve as a source of competitive advantage for firms, groups of firms and industry sectors.  Analyses can range from the theoretical and conceptual to systematic empirical analysis to case studies of individual firms, business ventures or strategies. Case studies that specify in quantitative terms the nature and magnitude of the competitive advantage based on industrial ecology are especially welcome.

Two sets of audiences are envisioned for this special issue: Those knowledgeable in business -­ both scholars and industry practitioners -­ seeking to apply their expertise to the novel environmental concepts that have emerged from industrial ecology and those familiar with industrial ecology, curious to understand how industrial ecology is or can be the basis for profitable business endeavors.

Learn more about how to submit a paper: http://www.yale.edu/jie/CFPs/CFP_IE4comp_ad.html

Saving Business from Itself

Is the business community its own worst enemy? That was my takeaway from a recent post on FastCompany’s blog. In it, Joss Tantram makes the provocative argument that trade — “rights of enterprise, private trade and market activity” — is a fundamental human right.  But he also notes that that right is increasingly at risk, given the market’s failure to address the disruptive effects of global warming and other environmental challenges. 

“Trade as we have known it is endangered,” Tantram writes. “Clear trends in demographics, urbanization, water quality and availability, climate stability, resource scarcity and ecosystem health represent risks to the continuation of trade as usual.”  He suggests changes to trade law, policy and regulation that remedy the problem.

I agree with Tantram. Mostly. Trade is the lifeblood of the world economy and the engine that enables people to live better lives. And, yes, systems of commerce are increasingly at risk due to self-inflicted social and environmental wounds.  So we do need new public policies to ensure future prosperity.

It's also true that a growing number of businesses are keenly aware that environmental threats are also threats to the bottom line.  As Tantram notes:

“A growing number of companies …recogniz(e) that their longevity relies upon the health and vitality of natural capital and the continuing stable functioning of natural systems, have developed plans to transform their production activities to become sustainable.”

So far so good. But I don’t think Tantram’s diagnosis or his cure, are precise enough. The real question to ask is: can business save itself from itself?

In fact, despite the progress that has been made, the primary obstacle to enacting policies that will safeguard the environment and protect the “right to trade” is still the business community and its allies. Far too frequently, their knee-jerk reaction to proposed environmental policies is to try to kill them.  Or, nearly as bad, many executives will sit on the sidelines while their more aggressive peers disrupt meaningful, system-wide action.

In the very worst  cases, companies speak out of both sides of their mouths. Publicly, they maintain the importance of sustainability; privately, they apply money and influence to thwarting meaningful action – often by undermining sound science (as detailed in this report by Union of Concerned Scientists).

We’ve come a long way in the past decade.  Environmentalists have gone from being seen as the enemy in corporate boardrooms to trusted advisors.  As a result, there are many exciting initiatives underway at corporations around the world aimed at tackling critical environmental problems.  But we cannot continue to pretend that voluntary programs alone are sufficient to solve the scope of the challenges we face.

Over the next decade, being a business leader (or a leading corporation) will mean helping to shape smart government policies that preserve ecosystems vital  to the continued profitability of business itself.  It will also mean taking a more aggressive role in overriding those voices within the business community that wish to maintain the status quo.

Business leadership of this sort is one of the critical elements to meeting the global threat of climate change. The stakes are high: our systems of global trade and the ecosystems life depends on hang in the balance.

Originally posted on EDFVoices.

It's not just about the trucks, but we can't do it without the trucks

A great piece in the Wall Street Journal caught my eye last week.  The article highlighted the impressive productivity gains trucking fleets have made recently. These, in turn, have led to a reduction in average truck miles of two percent from 2006. 

Two percent might not seem like much. But, by increasing the productivity of these assets, this change avoided over 8 million tons of carbon pollution last year.That’s no small feat.

As the article noted, these gains weren’t the result of a new technology or a superior truck. These gains were driven by operational improvements, such as  moving more goods per truck because of lighter weight and smaller packages, and better planning and routing so there are fewer empty trucks on the road. These are the exact types of operational strategies that comprise our Five Principles For Improving Supply Chain Efficiency And Sustainability.

When it comes to the carbon reduction potential of these  strategies, an 8 million ton reduction is just the tip of the iceberg.  Supply chain optimization and modal switches can save millions more tons. Collaborative logistics strategies have the potential to cut annual emissions by 200 million tons. These steps save companies money too – as Ocean Spray Cranberries has demonstrated.  We need to do all of these … and we need to do a lot more too.

For as important as these efficiency steps are, they are not going to be sufficient on their own. 

Fact of the matter is that emissions from freight transportation are projected to increase by nearly 200 million metric tons over the coming years.  For context, this increase is greater than what is expected in the commercial, industrial or residential sectors.  Freight already accounts for over half-a-billion tons of carbon pollution each year in the U.S.  We simply can’t afford to see such a significant growth in freight emissions.

So, how do we not only avoid this growth in emissions, but actually bring them down?  We need to pair increases in significant productivity gains with radically more efficient trucks.

Trucks are expected to account for over 80 percent of the increase in freight greenhouse gas emissions. Successful efforts to not only slow the growth in freight emissions – but actually reduce emissions from today’s levels, must improve trucks first and foremost.

Increasing the productivity of trucks is a needed step forward.  Every time a company gets more products on a truck or avoids an empty backhaul it equates to fewer trucks on the road. Using more carbon efficient modes is critical too.  Rail emits six times less carbon per ton mile than trucks. Ultimately, there will still be a lot of trucks on the road and we need for these to be as efficient as possible.

It was, therefore, great to also read in the article the interest truck buyers and truck makers have in more efficient trucks.  As the piece noted,

“Truck makers are pinning their hopes on more fuel-efficient vehicles to stimulate replacement demand, looking to emulate the success of auto makers in driving demand back to pre-recession levels.” And;

“A loaded heavy-duty tractor with a detachable trailer typically uses a gallon of fuel every 5 to 6.5 miles. Getting just one more mile a gallon saves thousands of dollars a year on the fuel cost for a single truck.”

How far can we push these trucks? Cummins and Peterbilt recently revealed that they built a truck for the DOE Supertruck program that "averaged 9.9 miles a gallon in road tests last fall."

Also, the CEO of Daimler Trucks North America (DTNA) Martin Daum recently called for his company to deliver a 10 MPG truck to the U.S. market. He noted that the company – which is the market leader for truck chassis and number two for truck engines – already manufactures a tractor that combined with a full trailer aerodynamic package can produce today a 9.3 mpg tractor-trailer today.

We have the technology to build radically more efficient trucks today. We also have the knowhow to use them much more productively. Let’s do it.