Jonathan Scott, CIPS - Green Business · •Increase in affluence ... Source: Smith, VM and...
Transcript of Jonathan Scott, CIPS - Green Business · •Increase in affluence ... Source: Smith, VM and...
The ‘Mechanics’
of Sustainability
©2016JonathanT.Scott/contact:[email protected]
An Introduction
www.efmd.org
Sustainability:the capacity to continue intothe long-term.
©2016JonathanT.Scott/contact:[email protected]
Focus:conservation,restoration,performance(dynamic, economic, progressive,profitableforall)
32% 32% 29%
7%
Market Potential
Work efficiency
Cost savings
Environment51% 32%
13%
4%
More money for employer
Job security
Control over work
Environment
MANAGERS EMPLOYEES
657 managers and employees in 8 different countries asked, ‘What is most important to you?’©2016JonathanT.Scott/contact:[email protected]
Population Growth• Increaseinaffluence• Increaseinlifespan
SurpriseUnanticipatedchangesin...• Accumulatingproblems• Innovation• Systems/Operations• Education/Training
Eco-System Decline Climate Change
Adaptedfrom:JohanRockstrom
Drivers of Change:
This is not
going away!
©2016JonathanT.Scott/contact:[email protected]
Purchase Costs
Operation Costs
Disposal Costs Future Costs
Populationgrowth
ClimatechangeEco-Systemdecline
Unanticipatedchanges
©2016JonathanT.Scott/contact:[email protected]
ProductionAnexampleof production and deficits:
BeforeWorldWarII
Today
1 calorieoffossilfuel(diesel,fertilizer,pesticide,equipment,transportation)
2.3 caloriesofprocessedfood
10 caloriesoffossilfuel(diesel,fertilizer,pesticide,equipment,transportation)
2.3 caloriesofprocessedfood
55 caloriesoffossilfuel(diesel,fertilizer,pesticide,equipment,transportation)
1 calorieofbeef
Source:Cooked byMichaelPollan (PenguinPress,NY,2013)©2016JonathanT.Scott/contact:[email protected]
Power plant loss60%-70%
Transmission line loss9%-10%
Motor losses10% Pipe losses
20%
Drivetrain & Throttle losses
35%
Fuel input 100%
Typical Industrial Pumping System
Pump losses25%
Understanding Sustainability: Lesson in Waste
Energy output 9%-10%©2013JonathanT.Scott/contact:[email protected]
Waste: not achieving 100% from purchases andinvestments.
¥£$€
¥£$€
¥£$€
¥£
$€
¥ £
$€
Also called: Non-ProductBusinesses make it, but can’t sell it!
JosephLing3M
Externalized costs
©2016JonathanT.Scott/contact:[email protected]
$1 billionLing’s ‘Pollution Prevention Pays’ program
Total savings after 30 years:
1-billionkilosofCO2emissionswereeliminatedintheprocess©2013JonathanT.Scott/contact:[email protected]
Nonna & SonsTyche,Poland
saves€28,800 peryearjustbyturningoffunneededlights
35ElementarySchools9MiddleSchools7HighSchools20otherschools
Escambia County, Florida
Saved: $9 million over3years
Behaviouralchanges:no capital investment
Basic waste elimination...
©2016JonathanT.Scott/contact:[email protected]
Doritos
Factory inCasa Grande, Arizona
Recently completed a large water recycling system designed to re-use up to 90% of the water used in the plant.
‘When water becomes scarce our ability to produce products is affected.’
‘We want to have technology developed and scaled so we don’t need tomove production to follow available water supplies.’
Annual savings: $60 millionThe company is also trying to get off the electricity grid by generating all its power from solar voltaics and cooking its chips with solar heat.
Too many products are over-packaged.
…told its 60,000 suppliers to reduce packaging by 5%.
20%ofitsgarbageispackagingwaste.
Result:- Solid waste reduced by 25%- Annual disposal costs reduced by $3.4 billion
The NEW Square Milk JugReducespackagingexpensesby20 cents perjug.
Allows50%moremilktobestoredincrates.
Increasescoolercapacityfrom80jugsto224.
Oneretailereliminated11,000 truckdeliveriesyearly.©2013JonathanT.Scott/contact:[email protected]
New laws are coming...
15% waste
New lawMaximum waste allowed: 6%
Average leakage: 20% - 30%
New LawMaximum leakage allowed: 6%
©2016JonathanT.Scott/contact:[email protected]
Waste Elimination on a macro-scale:
EnergyWaterRaw materialsLabour
Governments cannot afford to continuously build expensive power plants...
…particularly if up to 90% of the electricity these power plants generate is wasted because of inefficient systems.
©2014JonathanT.Scott/contact:[email protected]
Waste Elimination on a macro-scale:
EnergyWaterRaw materialsLabour
When waste is eliminated, less resources are used,
which means more businesses can be brought into an area…
which creates more jobs…
which increases the tax base…
which can decrease tax rates.
©2014JonathanT.Scott/contact:[email protected]
Paper
Plastic
Electronics
New Laws (and Physical Waste)
etc...
No more land is available for landfill©2013JonathanT.Scott/contact:[email protected]
Zero Waste Factories• Since 2004, nothing used in this factory (which hasbuilt 1.7 million vehicles) has gone to landfill.
• Since 2004, there have been no job losses or layoffs.
• In 2016, the parent company (Fuji Heavy Industries) willinvest another $400-million into this factory,creating 900 additional jobs.
GM, Honda, and Volkswagen are now working to achieve ‘zero landfill’.
Anheuser-Busch and Xerox have ‘zero-landfill’ factories.
Smuckers and Colgate-Palmolive have stated they want the same.
How difficult is it to find waste and wasteful practices?
These6students foundover€15,000 ofwasteinthisbusinessin2hoursand45minutes.
X5=€ 75,000 X20=€ 300,000©2016JonathanT.Scott/contact:[email protected]
Thesestudentsshowedthisbusinesshowitcouldsave€236,113 annually.
©2013JonathanT.Scott/contact:[email protected]
ü Redundancies in paperwork and systems...
ü Over-buying...
ü Any form of system or operational inefficiency...
ü Not taking advantage of innovations and opportunities...
ü Law-Suits, Fraud...
ü Damages...
ü Wasted time...
ü Bad service…
ü Bad investments...
ü Poor customer relations...
ü Human error...
ü Wasted markets...
ü Wasted skills and labour...
Additional examples of waste (financial loss) in business environments include:
Waste:not achieving 100% ofpurchases andinvestments
©2013JonathanT.Scott/contact:[email protected]
From Saving MoneyTo Making Money
©2014JonathanT.Scott/contact:[email protected]
The next step:Resource-Life Extension
Manpower andEnergy Consumption
in Production Processes
Rawmaterials
+ + =Energy Manpower Basicmaterials
Converting raw materials into basic materials:
Converting basic materials into products:
+ =Manpower Energy Finishedproducts
Walter R. Stahel
©2016JonathanT.Scott/contact:[email protected]
+ =Manpower FinishedproductsEnergy
+=
Manpower and Energy Consumptionin Production Processes
Rawmaterials
+ + =Energy Manpower BasicmaterialsRawmaterials
+ + =Energy manpower Basicmaterials
©2016JonathanT.Scott/contact:[email protected]
Interface
Interface: Making new carpets fromold carpets since 1996.
• Profitsdoubled• Employmentdoubled• The company’s stock priceincreased 550%
Caterpillar
• Operates 3 remanufacturing plants in thesoutheast USA. (job creation)
• Equipment components are manufacturedonce and sold up to three times.
• The business model helps encouragecustomer loyalty.
Overafive-yearperiod:
- allcapitalexpensespaid
- 82% reductioningreenhousegasses
- 60% reductioninpetroleumuse
- 75% reductioninwateruse- theonlymajorcarpetcompanytogainmarketshareinthe2000-2003recession
Source:RayAnderson,TEDlecture(2009)
Overaten-yearperiod:Remanufacturing used engines vs.
manufacturing new engines:
•Lowereconomiccosts (30-53%),•Lowermaterialconsumption(26-90%),•Lowerwastegeneration (65-88%),•Lowerenergyconsumption(68-83%),•Loweremissions (50-88%)•73-78% less carbondioxide(CO2),•48-88% less CO,•72-85% less nitricoxide&nitricdioxide,•71-84% less sulphuroxide,•50-61%lessnon-methanehydrocarbonsemissions.Source:Smith,VMandKeolian,GA(2004)Thevalueofremanufacturedengines,lifecycleenvironmentalandeconomicperspectives,JournalofIndustrialEcology,8(1-2)193-222
Waste Elimination and Resource-Life Extension on a macro-scale:
EnergyWaterRaw materialsLabour
Tokyo Metropolitan Government:
Municipal Environmental Protection Ordinance
• 15 different retailers• Consolidated deliveries
to 30 stores
Result:• Number of delivery trucks
on Tokyo roads reduced by 50%
• 4,000 tons of GHG’s eliminated
CooperativeNetworks
©2014JonathanT.Scott/contact:[email protected]
Lockheed Martin moveditsofficestoanewbuilding litbynatural lightand(alongwitha$500,000 reductioninelectricity)profitedfromthefollowing:
• A 1.67% increase in productivity.
• A decrease in absenteeism of15% (which usually hovered around 7%).
• Further investigation revealed that a 15% drop in a 7% absenteeism rate isequal to a 1% increase in productivity.
• The study concluded that a productivity increase of 2% amounted to$3 million of additional revenue every year.
Introducing more natural daylight into a buildingis an effective way to make it more energyefficient and less wasteful (cost savings).
Canitalsogeneratemoreresource value?(i.e.:Willitproducemorerevenue?)
More than 1,500 wave lengths in natural light
Thereduction in absenteeismpaidforthebuildinginlessthan1 year.
ü Repeat customers...
ü Employees that continuously create value...
ü Renewable energy...
ü Workplaces and systems that enable increases in productivity...
ü Products that facilitate continuous future revenues, not costs...
ü Systems that facilitate continuous future revenues, not future costs...
Additional examples of closed-loops in a business include:
Resource-Life Extension:Obtaining on-going value from
purchases and investments…
©2016JonathanT.Scott/contact:[email protected]
Reducing resource consumption and increasing profits by reusing and/or reselling currently used materials,
molecules and resources (i.e.: doing more with less)
To the Recycler?
…only AFTER waste elimination!If WalMart sent its waste to a recycler instead of eliminating it, the
company would not be saving $3.4 billion per year!
©2016JonathanT.Scott/contact:[email protected]
Remember theSustainability Mechanism rule:
Waste Elimination (waste prevention)
leading to the ultimate goal of
Resource-Life Extension (material re-use)
©2016JonathanT.Scott/contact:[email protected]
Do you recommend proceeding? No or Yes?
Many factory furnaces and boilers in Central and Eastern Europe
are inefficient – and the region is in need of more electricity.
Your company wants to invest in a plan that captures waste heat
from the inefficient furnaces of partners and converts it into
electricity to sell at a profit.
©2013JonathanT.Scott/contact:[email protected]
Your office building has a 20-year old air-conditioning system.
Installing a new, more efficient system will reduce electricity bills
by tens of thousands of dollars every year.
Do you recommend proceeding with the purchase?
No or Yes?
©2016JonathanT.Scott/contact:[email protected]
A Case Study...19,000 sq. meter office buildingLocation: ChicagoSituation: Needs upgrade (window
seals are leaking)
Improvements made:
- Super insulated windows
- Efficient light bulbs
- Deep day-lighting
- Efficient office equipment
The result:
- Heat load reduced by 85%
- a/c system replaced with a model:• 75% smaller• 4 times more efficient
Total cost: $200,000 • $200,000 cheaper
- Yearly energy bill reduced by 75%
Total savings: $220,000
If all office buildings in the USA did the same, the country couldsave $45 billion in energy costs every year. ©2016JonathanT.Scott/contact:[email protected]
Your company is interested in developing moulded and shaped
batteries for devices like smart-phones. The idea is to make
batteries bigger without increasing the size of the phone.
Do you recommend proceeding? No or Yes?
©2013JonathanT.Scott/contact:[email protected]
Massachusetts
Institute of
Technology
Power amplifiers can waste up to 65% of the electricity in a smart phone
Longer battery use
©2013JonathanT.Scott/contact:[email protected]
Work with your suppliers and your customers.
What will happen to your business if your suppliers or distributors (or customers) are hit hard because they are not thinking ahead?
Where are the weaknesses in your supply chains and
your customer-use chains?
Preparing for the future involves eliminating your waste and closing your loops...
Profiting from Sustainability:
©2013JonathanT.Scott/contact:[email protected]
Proctor & Gamble
...discovered during a rigorous product-lifecycle analysis that using P&Glaundry detergent generated thegreatest amount of waste and pollution.
Specifically, 85% of the energyneeded to wash clothes is used toheat the water in the washingmachine.
Cold water detergent!One of 7 new innovative products thathave generated over $2 billion in sales.
The result?
WasteElimination(WastePrevention)
Resource-LifeExtension
(Closed-LoopEconomicsCircularEconomy)
Sustainability =
Investors
HR professionals
Service providers…
Are you paying attention?
Doyouwanttoinvestyourmoneyinbusinessesthatarefullofwaste?
Doyouwanttohirepeoplethatknowhowtoeliminatewasteand optimizeresources?
MAIN PRINCIPLES...
Sustainability: the capacity to continue into the long-term.
1.
Convey your message in a way that the receiver understands.
2.
Sustainability application: waste elimination leading to resource-life extension.
3.
Involve suppliers, distributers and customers.4.
It’s all or nothing - there is no finish line.5.
©2013JonathanT.Scott/contact:[email protected]
Availablefree from:The European Foundation forManagementDevelopment
www.efmd.orgClickon:
Research
Clickon:TheSustainableBusiness
©2016JonathanT.Scott/contact:[email protected]
YouTubeEnter: cips andefmd
Clickon:Research
Clickon:TheSustainableBusiness
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www.efmd.com
Clickon:Videos
QUESTIONS?
www.cipsfoundation.com
©2016JonathanT.Scott/contact:[email protected]