How To Grow Your Business

GREEN!

Five Penn Plaza, 23rd Floor, New York, NY 10001 Phone 212.835.1601 www.hudsongain.comCopyright ©2009 Hudson Gain Corporation

Woodbridge Bizmania 2009

Moderator: Victoria Zelin, Hudson Gain

Panelists: Dave Kitts, Mannington

Kevin Tubbs, Ingersoll Rand

Ron Maslo, NJ Clean Energy

Sustainability: The Triple Bottom Line

“Meeting the needs of the present without compromising the ability of future generations to meet their own needs.”

Brundtland Commission

(1987)

2

Planetsustainable resources

and operating environment

Profitssustainable businessincreased present value

Peoplesustainable employee and customer base

Why Green Your Business?

� Regulation

� Competition – Transparency

� Stakeholder demands – Supply Chain

� Recruiting – Retention

� Cut energy costs – Waste

� Government Incentives

THE BOTTOM LINE:

It’s good business sense, short and long-term!

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Green Outperforms the Market

“According to a recent study by A.T. Kearney,

99 sustainability-focused companies* …

outperformed the broader market by an average of

10 percent from September to November 2008,

and by 15 percent from May to November.”

Daniel Mahler, Ph.D., Partner, A.T. Kearney*selected for being on either the Dow Jones Sustainability Index or the Goldman Sachs SUSTAIN focus list, or both

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Hudson Gain’s Evolution to Green

5

TalentAcquisition

TalentDevelopment

Sustainable Leadership

Sustainability Leadership

Going Green? Don't Hire a Sustainability Chief Until You Read This Study!

The Role of the

Chief Sustainability Officer (CSO)

in Corporations

6

How Do You Green Your Business?

� Assess, then prioritize based on your strategy

� Build the business case

� Plan, set goals and accountabilities

� Consider extending ROI timelines

� Grow your people in the process

� Measure and celebrate

� Get professional help if or as needed

There’s NO ONE-SIZE fits all

7

8Copyright ©2009 Hudson Gain Corporation

Victoria ZelinSVP &

Sustainability Practice Leader

Hudson Gain Corporation908.306.0272

victoria.zelin@hudsongain.com

Dave Kitts

VP – Environment

October 5, 2009

Green Tsunami

Chris JordanContemporary artist – Seattle, WA

106,000 aluminum cans

every 60 seconds

2,000,000 plastic bottles

every 5 minutes

11,000 jet trails

every 8 hours

38,000 shipping containers

every 12 hours

Limits to Growth

� Growing population

� Intensive resource usage

� Limited resource stocks

� Fragile ecosystems

� Unsustainable consumption trends(!)

� Two planets needed by 2050? (UNEP)

Family-Owned Flooring Business

� Operating > 94 years

� >2,000 employees - 700 in NJ

� 7 U.S. manufacturing sites – Resilient & HQ’s in New Jersey

– Carpet in Georgia

– Laminate in North Carolina

– Wood in North Carolina and Alabama

– Rubber in California & Florida

– Tile joint venture in Texas

�20,000 landfills - >15,000 reached limit & closed

�40% of landfill content is construction waste

�Construction waste equals municipal garbage

WASTEFUL BUILDINGS - USA

USGBC

Active Member

since 1998

Perception

HHomes

2008*

NCNew Construction

& Major Renovations

2000*

EB: O&MExisting Buildings: Operations

and Maintenance

2004*

CSCore and Shell

2006*

CICommercial Interiors

2004*

The LEED Rating Systems

Schools2007*

* Year rating system first implemented.

*As of April 2009, over 5 billion square feet of commercial building space is involved with the LEED green building

certification system.

*As of April 2009, over 5 billion square feet of commercial building space is involved with the LEED green building

certification system.

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LEED ADOPTIONS

Environmental ImprovementEnvironmental Improvement

Operations…

“how we build it matters”

Products/Services…

“what we build matters”

Communications…

“what we say matters”

(per yards produced)

2007 vs. 2008

Solid Waste 14%

Energy 5%

Water 14%

‘‘Big 3Big 3’’ Environmental MetricsEnvironmental Metrics

Net user of waste

Waste inWaste in

Waste outWaste out11

Net User of WasteNet User of Waste

2001 2002

2003

2004

2005

2006

2007

2008 2009(1-6)

Calhoun 0.94 0.71 1.3 2.1 3.5 5.5 8.7 4.6 2.3

Salem 0.48 0.24 0.28 0.3 0.17 0.16 0.22 0.47 1.5

Combined 0.51 0.29 0.36 0.43 0.45 0.55 0.83 1.3 1.8

waste in

� >10,000,000 pounds – 2007

(ie >5,000 tons)

� >12,700,000 pounds – 2008

(ie >6,300 tons)

� >8,000,000 pounds – 1st ½ 2009

(ie >4,000 tons)

X 1270

Operations

ISO 14001 (E) & ISO 9001 (Q)

Infinity RErecycled content backing

Relay RE35% recycled content

Premium Tile-25% RC

� 6,000,000 lbs – 2009

� >10,000,000 lbs predicted - 2010

Annual Tile Recycling

X 600

>400 tons recycled

(since started, late 2006)

IAQ

L E E DBuild green. Everyone Profits

NSF 140 Sustainable

Carpet Assessment Standard

� Safe for Public Health & Environment

� Renewable Energy & Energy Efficiency

� Material, Biobased or Recycled

� Facility or Company Based

� Reclamation, Sustainable Reuse & End of Life

Mgt.

(total of 113 available points)

� Informed Product Design

� Intelligent Product Manufacturing

� Long – Term Value

� Progressive Corporate Governance

(total of 99 available points)

NSF 332 Sustainable Product Standard –

Resilient Flooring

ACTIONS SPEAK

The Business Case for SustainabilityAt Ingersoll Rand

Bizmania

October 5, 2009

Kevin R. Tubbs

Bizmania – October 5, 200974

Ingersoll Rand– $ 17 billion company– 64,000 employees– Products and services in nearly 200 countries– Over 100 manufacturing facilities worldwide– In 2008 was named to the Dow Jones Sustainability North America Index and included on seven KLD socially responsible investment indexes.

Trane, a business of Ingersoll Rand– Leading global provider of integrated HVAC systems, services and solutions

– 29,000 employees– 29 manufacturing facilities worldwide

Business overview

Bizmania – October 5, 200975

Sustainability at Ingersoll Rand

Triple bottom line

• We communicate the company's "triple

bottom line" business strategy as Green,

Giving, Growing. Collectively, these three

elements are essential to operating a

responsible business.

Economic Prosperity

Environmental Stewardship

Social Responsibility

GrowingGreen GivingPositioning

Ingersoll Rand as the

industry-leading

provider of green

solutions

Reducing our own

environmental footprint

“Inspiring Progress”

Award recognizing

employee action

Bizmania – October 5, 200976

Expanding to sustainability reporting

• IR published environmental, health

and safety (EHS) reports in 2004,

2005, and 2006

• Trane published Corporate

Citizenship Reports for 2004

through 2006

• 2007 annual report introduction

• 2007 sustainability report

– expansion of our previous

EHS reports; covers our

economic, environmental

and social performance

Bizmania – October 5, 200977

• Tyler Plant produces residential air conditioning systems

• Business landscape:

– Expiration of five year fixed price electrical contract

– Rising energy cost +70% on $4M spend

– Dramatic downturn in housing market

Ingersoll Rand acquires Trane – June, 2008

– Corporate goal of 15% normalized reduction in manufacturing energy use by 2013

Drivers for Change – Tyler, TX.

Bizmania – October 5, 200978

• Campus style facility; Total 1.1 million square feet, 700KSF manufacturing / test, balance Engineering, offices & warehouse

•• 100PSI & 400PSI Compressor Dry Air (CDA) Systems; 5,000 SCFM total demand @ -40F DP

• Four 900 Ton Trane Centrifugal Chillers running in series / parallel, operating at 380F Comfort cooling in manufacturing area

• 2400 Ton Process Cooling Tower Water System

• 1-600 HP & 1-35 HP gas fired boiler •• Mix of HID lighting, T12, T8 & T5 fluorescents

Facilities & Infrastructure

Bizmania – October 5, 200979

Internal case study

• Trane’s largest production facility in Tyler, Texas, headquarters of residential systems business

• Energy team developed a phased plan that is expected to yield $1.1 million in annual savings

• Approach currently being used at two additional Ingersoll Rand locations, with a goal of six locations in 2009

• Policy & Deployment • Management / factory awareness

• Electrical sub-metering

• Ownership of results and empowerment

• Metrics, monitoring and reporting

• Energy Conservation Measures • Behavior changes

• Off / on controls nights / weekends

• Basic operations and maintenance

• “Low hanging fruit” projects

• Energy Efficiency Projects• Equipment / systems efficiency

• Production methods

• Waste minimization, leaks and losses

• Focused investment

• Pricing Strategies• Supply / rate management

• Demand management

• Off-peak load shifting

Bizmania – October 5, 200980

Tyler Weekend Electrical Cost Avoidance

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

2007 kWh 2008 kWh

Early Success Easter 2008

Bizmania – October 5, 200981

• Multiple Benefits are being achieved:

– Increased Employee Engagement

– Significant decrease in Greenhouse Gas Emissions

– Use of remote monitoring and engineering support to reduce cost and “hold the gains”

– Delivering better than expected raw cost avoidance ($480,000 in calendar year 2008)

• Total Projected Costs: Approximately $1.8 M

• Projected Annual Savings: Approximately $1.1 M

Project Summary

Bizmania – October 5, 200982

Serving Customers

• Ingersoll Rand has the most LEED-accredited engineers of any company. We use that expertise to help our customers and,

increasingly, to help our own facilities achieve green building

status.

• It’s also one of only four energy service companies asked to

participate in the Clinton Climate Initiative (CCI).

• In 2007, Trane’s CenTraVac™ chilled water system won the

prestigious “Best-of-the-Best” Award from the U.S. Environmental

Protection Agency for its contributions to strategic ozone

protection. It is the most energy efficient system available for large

buildings.

Business value of sustainability

Bizmania – October 5, 200983

Ingersoll Rand and Trane help buildings go green by:

• Designing and engineering green buildings – TRACE™ 700 is the complete design tool for load, system, energy and economic analysis, and is recommended by the USGBC to receive LEED points

• Constructing green buildings – EarthWise™ systems use state-of-the-art Trane products, systems and controls to optimize performance.

• Operating and controlling green buildings – Tracer Summit™ controls give advanced control of complex systems to achieve energy savings and measure performance.

Bizmania – October 5, 200984

Energy efficiency curriculum

• Trane’s BTU Crew educational program teaches energy awareness and conservation measures for buildings and offers students the opportunity to conduct comprehensive energy audits as they explore career opportunities that harness their interests in science, technology, engineering and math careers.

• Program elements also incorporated in Girl Scouts of the USA’s national energy journey for Girl Scout Juniors

Bizmania – October 5, 200985

Hussmann provides innovative green solutions for retail food industry

Bizmania – October 5, 200986

Sustainable Practices Bring Recognition

• USEPA Best of the Best Stratospheric Ozone Protection Award

• KLD Indexes

Bizmania – October 5, 200987

Thank you!

A NEW JERSEY PERSPECTIVEOn Energy Saving Incentives

m

Presenter:

Dr. Ron Maslo, P.E.

Project Manager

732-996-2762 (Cell)

732-556-9190 (Office)

Program Market Manager:

TRC Energy Services, Inc.

900 Route 9 North, Suite 104

Woodbridge, NJ, 07095

732-855-0033

NJ Clean Energy Program

• Introduced March 9, 2001, as part of the Electric Discount and Energy Competition Act, N.J.S.A. 48:3-49 et. Seq, February 9, 1999.

• Funding comes from “Societal Benefits” or “SBC” Charge on Utility bill, N.J.S.A. 48:3-60(a)(3).

• Provisions for Commercial & Industrial projects, Residential Projects, and Renewable Energy projects

• New construction projects must be in designated Smart Growth areas to be eligible for incentives.

• Refer to the Program Guide found at www.njcleanenergy.com/ssbunder “Quick Start”

Why Energy-Efficiency Programs?

• Save energy and money by reducing the

demand for energy

• Protect the environment

– Less emissions

– Cleaner air

• “Transform” the Market Place

– change behaviors - think high efficiency first

– encourage sustainable practices

OWNERSHIP COST SUMMARY(40-year building life cycle approximation)

14%

Operating & Maintenance

Costs

50%

Alteration Costs

25%

11%

Construction

Financing Front-end decisions

result in long range impact

Who Can Participate?

All New Jersey C&I Electric and Gas customers(who pay Societal Benefits, i.e., not served by municipal utility)

Opportunities for all size and type projects:– New construction (new buildings & additions)

– Major renovation (gut-rehabilitations)

– Equipment replacement

Incentives Available For:

• Design Assistance Grants

• Pre-Qualified Equipment

• Custom Measures with energy-saving potential

• Cost-sharing for Studies & Commissioning

Design Assistance Grants

• Comprehensive Design Support

– At conceptual design stage of construction project

– For Facilities of 50,000 Square Feet and Larger

• OR HVAC > 150 tons and Demand > 75kW

– Brainstorming: $1,000 grant

– Energy Modeling: $5000 minimum

– Incremental design incentive: up to $5,000

• Modified Design Support

– Design substantially complete, but before bidding

– Goal to re-consider energy saving potential

– Up to $5,000 on case-by-case basis

Pre-Approved Technologies

– Electric Chillers ($8 to $170 / ton)

– Natural Gas Cooling ($185 to $450 / ton)

– Electric Unitary HVAC Systems ($40 to $92 / ton)

– Ground Source Heat Pumps ($370/ton)

– Gas Heating ($300 minimum / furnace or boiler) & DHW Heating ($50 minimum / heater)

– Variable Frequency Drives ... ($60 to $155 / HP)

– NEMA Premium Motors - 1 to 200 hp ($45 to $700 / motor) ..

– Prescriptive & Performance Lighting ($10 to $284 / fixture)

– Lighting Controls ($20 to $75 / unit)

• Opportunities for non-pre-qualified technologies

• Submit Custom Equipment applications and custom project data sheet estimating:

1. Savings over established “base-line”, for example, 20 kW minimum demand reduction or 25,000 kWh saved per yr. or 10 to 15 % Gas Savings

2. Life-cycle costs vs. life-cycle savings

• If project qualifies: (Benefit/Cost Ratio >1.0, Payback > 24 months

Incentive equals $0.16 per Kwh/yr or $1.60 per Therm saved.

Custom Electric and/or Gas ProjectsCustom Electric and/or Gas Projects

Other Ways to Participate

• Multiple Measures Bonus (up to 10% extra)

For projects with lighting and non-lighting incentives or

2 non-lighting incentives, if lighting previously upgraded

• Building Commissioning (CX)

For K-12 public schools only (at least 50,000 s.f. in area)

Must follow Comprehensive Design Path

50% of Commissioning Agent fee to $30,000 maximum

NJ SmartStart Buildings Rules

• Send to TRC Energy Services (Market Manager):

- Application & Worksheet (if applicable)

- Copies of latest Utility Bills and W-9 form

- Equipment Manufacturer Technical Data Sheets

• You must receive TRC’s approval letter prior to the removal of existing, or installation of new, equipment

- When incentives > $5,000 for HVAC or motors

- For all other energy-efficiency measures (EEMs)

• Install in accordance with the “approval letter” within the

specified time frame

NJ SmartStart Rules (continued)

• Submit “proof-of-purchase” documentation and tax clearance certificate. Incentive will be the lesser of:

� Approved program incentive amount

� Actual equipment cost of the EEM

• Allow 60 days for delivery of incentive after submission of all required documentation.

• The NJBPU reserves the right to cap incentives at $500,000 per utility account per calendar year.

• Budget for 2009: $51.59M (Includes P4P CHP)

New Incentives for 2009

• Direct Install Program

• Pay For Performance Program

• TEACH Energy Education Program

• Local Government Energy Audit Program

Direct Install Direct Install

... back

• Retro-fit Program for facilities with an average peak demand <200 kW.

• Incentives and education are to encourage early replacement of eligible, energy consuming equipment.

• Provides for direct installation by pre-qualified contractors. Incentives are paid directly to the contractor.

• Qualifying Users are eligible for incentives up to 80% of installed cost of approved projects.

• User pays contractor remaining 20%.

• Budget for 2009 ~ $10.2 M

Pay For Performance Pay For Performance • For facilities with an average peak demand of > 200 kW.

• Incentives are based on analysis & simulation and are linked directly to energy savings, with a 15% reduction as the minimum goal, Lighting cannot exceed 50% of projected savings.

• Three milestone payments:

1) Submittal of Energy Reduction Plan – Incentives are Contingent on moving forward and are based on $0.10 / sq ft and range from $5K to $50K max ( not to exceed 50% of annual energy expense).

2) Installation of all Recommended Energy Saving Measures – Incentives equal 60% of total Performance Based incentive.

3) Completion Benchmarking Report - Final incentive equals remaining 40% of total Performance Based incentive.

• Incentive is capped at $1M / utility meter and $2M / facility. Doubled for Hospitals, Non-Profits, Universities and Gov’t Facilities

• Payment 1 cannot exceed 50% of annual energy cost.

• Combined Payments 2 & 3 cannot exceed 50% of Project Cost

• EPA Portfolio Manager or LEED EB may be followed to validate savings, along with post Retrofit billing data.

• Budget for 2009 ~$23.2M

• An educational, practical program for approximately 100 K – 12 Public Schools in 6 to 9 Districts.

• Schools to be Selected by State of NJ based on building characteristics

• Requires 24 months of energy consumption data to serve as baseline for comparison of savings versus baseline.

• Will entail modeling of facility to establish a base condition and to identify energy saving alternatives.

• Will allow administrators to see how their schools are performing against a local and national sample.

• Provide energy efficiency educational programs for the students and training of the faculty to teach these programs.

• Budget for 2009: $796K

Teach - Energy Education Program (Teaching Energy Awareness with Children’s Help)

Teach - Energy Education Program (Teaching Energy Awareness with Children’s Help)

• Program to audit municipal/county government facilities & NJ State Colleges and State Universities and to determine energy saving measures.

• Agency submits information to TRC and requests proposal for an energy audit from contractor on approved NJ Dept of Treasury list.

• Agency pays 25% of audit fee - if recommended upgrades are installed, equivalent in amount to the 25% fee, the 25% fee is refunded to Agency.

• Agency participating is eligible for upgrade equipment installation through the Smart Start Program or the Direct Install Program (3Q009).

• Incentive Caps Based on Sq Ft of Facility:

– <750K SF $100K/Yr

– >750K SF, <1,500K SF $150K/Yr

– >1,500 SF, < 2,000K SF $200K/Yr

– >2,000K SF $300K/Yr

• Total 2009 Funding ~ $13.3M

Local Government Energy Audit ProgramLocal Government Energy Audit Program

For More Information

• Commercial & Industrial Market Manager

TRC Energy Services, Inc.

(732) 855-0033

• Marketing Outreach - EAM Associates, Inc.

Dr. Ron Maslo, P.E.

(732) 996-2762

rmaslo@eamenergy.com

Five Penn Plaza, 23rd Floor, New York, NY 10001 Phone 212.835.1601 www.hudsongain.comCopyright ©2009 Hudson Gain Corporation

Questions?

How Do You Green Your Business?

� Assess, then prioritize based on your strategy

� Build the business case

� Plan, set goals and accountabilities

� Consider extending ROI timelines

� Grow your people in the process

� Measure and celebrate

� Get professional help if or as needed

There’s NO ONE-SIZE fits all

108