by Caroline D’Angelo
July 20, 2011
“Reduce” – One of the three “Rs” of sustainability, the concept of Reduce is one that is challenging to consumption-based societies. After all, to build off Oliver Sanche, the late Apple data center sustainability guru, the most efficient and sustainable data center, office, etc. that you can have is the one you don’t have to build. So won’t reducing consumption reduce our economy? The short answer is No. In fact, a look around the business-scape today shows that there is business opportunity in “Reduce”; from better marketing and relationships with consumers and employees, to new product lines.
Some companies have taken the lead on “Reduce” in a variety of ways, from reducing the use of virgin materials, to investing in energy-efficiency, to creating company recycling programs. Responding to consumer and company desires to reduce the use of paper, Xerox invented a reusable paper that erases itself, creating a product line for temporary paper needs. Patagonia, the outdoor equipment and clothing company, used internal demand to drive carbon footprint analysis on all of their products and shifted to all organic cotton in the 1990s. Now they create fleece out of recycled soda bottles, reducing the demand for virgin petroleum products. Coca-cola has been working to reduce its water use and has redesigned its packaging across the company to reduce materials use. Bank of America recently devoted $55 million to help finance energy-efficient retrofits.
Indeed, perhaps the underutilized “R” is now set to become more mainstream as companies recognize that there are serious benefits to Reduce, both environmental, social and financial. Making processes and products more efficient reaps financial returns from lower materials costs, lower shipping costs, and lower waste disposal fees. Cloud computing, better manufacturing and redesigned products are ways that companies are benefiting their triple-bottom lines. Companies are also using natural systems, rather than working against them. Companies like Yahoo and Microsoft are recreating data centers to harness natural cooling, like winds off of lakes and cool outside air.
Reducing all virgin resource use is critical, but water may be the utmost. At our March 22 conference on Valuing Water, representatives from companies, government, NGOs and academia convened to discuss challenges and opportunities. The water situation is dire – demand is outstripping supply throughout much of the world, and will only get worse. With water, reductions are crucial, for the sake of ecosystems, biodiversity and people. Yet even here, reductions provide business opportunities. Will Sarni of Deloitte Consulting highlighted Intel’s aggressive reduction of water use for manufacturing. Jeff Fulgham of GE talked about GE’s new innovations and partnerships around the world in water reuse, which decreases demand on stressed ecosystems. Finding opportunities in scarcity is an excellent way to encourage innovation and problem-solving.
Of course, while business opportunities are great, a mainstay point of the three “Rs” is ethical behavior. It may be that some investments in sustainability do not recoup costs on a simple cost-benefit analysis, due to subsidies, poor policy, or a high adoption cost. Sustainability efforts are hard to quantify in many cases, though efforts by the Global Reporting Initiative, SAP and others are certainly making it easier and better. Some ethical behavior may not never be adequately quantifiable; certainly at the very least, not everyone will agree on what constitutes ethical behavior. Perhaps risk is therefore an inherent part of ethics, but with smart design and proper outreach, risk can be mitigated and pay off to a triple-bottom line. In the 70s, for example, Patagonia pulled a product for rock-climbing off the shelves when the founder saw first-hand how much damage it was doing to rock faces and took a risky turn to an alternative product unknown to the consumer market; it became the standard.
“Reduce” may sound like a risk to economic growth, but it can be a boon to
bottom lines. “Reduce” is an important component of living more sustainably; it encompasses smarter design, more efficient processes, and working with natural mechanisms, rather than against them. How does your company interact with “reduce”?
(If you’re interested in seeing what a fully shifted economy could look like, see Paul Hawken’s brilliant books “Natural Capital: Creating the Next Industrial Revolution” and “The Ecology of Commerce: A Declaration of Sustainability“)
**the views of the author are her own and should not be construed as the views of Wharton or the University of Pennsylvania**