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June 29, 2010
The natural products industry is no stranger to eco-friendly practices, such as sourcing organic ingredients or using recyclable packaging. But suppliers and manufacturers that really want to be green through and through are going farther by reducing their use of resources like electricity, water and materials. This is where sustainable practices can turn a company’s bottom line from red to black—or should we say green?
According to case studies evaluated by the Environmental Protection Agency, some companies have seen a 58 percent internal rate of return by reducing emissions and material costs. Better yet: The payback took only 18 months.
At its inception, greening seemed like just another ploy to gain customers, hence the term greenwashing. But today it’s a necessary business practice. “The world’s largest brands now report on sustainable energy policies as a source of competitive positioning to prospective employees, customers and investors,” according to a report by United Kingdom-based Lanner, a simulation software company that optimizes business processes.
Green from the ground up
One company that has looked at sustainability from the inside out is the international food-ingredient producer Danisco. “The environmental and social impacts and benefits of a product are not limited to their manufacture, use or disposal,” says Jeffrey Hogue, vice president of corporate sustainability for Danisco. “Instead, the impacts occur throughout a product’s life cycle, encompassing each element in the value chain, from material sourcing, energy generation, production and use to end-of-life disposal or recovery.”
Danisco recently hired Mikkel Thrane, PhD, a life-cycle assessment strategist, to drive the company toward an even more sustainable operation. “This [LCA] will involve documentation of the products’ environmental profiles (such as the carbon footprint), and entail the use of LCA knowledge for decision support in product development, production planning, purchasing, marketing and collaboration with customers to reduce their impacts,” Hogue says.
Other companies started small and worked their way toward a broader-based plan. For instance, in 2008, Alkemists Labs, a Costa Mesa, Calif.-based third-party testing lab for the dietary-supplements sector, began purchasing renewable energy credits to offset its carbon emissions (the equivalent of 11 metric tons of carbon dioxide). Since then, the company has doubled in size, which means it also doubled its carbon footprint, according to CEO Elan Sudberg.
Alkemists continued to purchase renewable energy credits, but also made internal changes to various processes. Along with recycling paper and botanicals, and switching a print newsletter to digital, Alkemists converted to electronic reporting techniques. In 2011, the company plans to incorporate a fully digital tracking and reporting system that will allow clients to integrate their own systems with Alkemists Labs when seeking current good manufacturing practices compliance.
As is the case with Alkemists Labs, the benefits of sustainability are contagious. The Lanner report found that when companies go green, they often expect their clients to do the same because of increased efficiencies and cost reduction down the entire supply chain. “You could call ‘going green’ a fad if saving money is going out of style in this century,” says Kyle Stewart, CEO of nuMeridian, a newly launched energy solutions company in the fuel cell industry.
“The only barriers to the widespread adoption of alternative energy are in the minds of those too reluctant to change. The benefits are real for the user and the environment."
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