Category Archives: Sustainability

Sustainability in 2025 and Beyond, Part 6: Sustainability Strategies, Part III Demand

In our first installment we noted that while sustainability may have fallen out of favour in the current American political and regulatory environment to the point that we had to counter the Chief Sustainability Officer graphics going around earlier this year with a Chief Sustainability Officer: USA Edition, sustainability, at its core is becoming more and more important to corporate survival. In our second installment, we described how sustainability concerns permeate every department of the organization, and failing to adhere to them is not only unsustainable in the environmental sense, but also in the business sense. In our third instalment we dove into the stakeholder engagement that is required for true sustainability success.

Then, in our (forth) installment, we started outlining the key areas of focus to identify the key projects that will increase both environmental AND business sustainability, starting with energy. We followed this up in our fifth installment with (fresh)water reduction. In today’s, sixth, post we continue with key project identification in the areas of demand.

Non-Renewable Resource Reduction

Unlike the first two posts, where we could pinpoint specific situations where you had a lot of opportunity for sustainability improvements that would lead to significant cost reductions (which is the ultimate key to business sustainability), this depends on what you are buying, what options are at your disposal, and how much opportunity you have for substitution and/or re-design.

Let’s take a few examples to try and explain this:

  • Packaging: you can use new packaging made from freshly cut trees, or you can use packaging with a high concentration of recycled material
  • Fuel/Plastics: you can use petroleum-based fuel and plastics or you can use biofuel/bioplastics
  • Electronics: you can use rare earth magnets with ferrite magnites or continue your research into iron-nitride and magnesium-based alloys for permanent magnets and focus on developing alternatives to lithium batteries such as sodium-ion, zinc, or solid-state batteries

There’s no magic formula for identifying which non-renewable resource-based products can be replaced with products that are based mostly, or solely, on renewable resources beyond examining every product you are purchasing for alternatives. Fortunately, that’s not as hard as it was twenty years ago with modern technology that has extensive built-in catalogs, pre-defined SKU similarity groupings, and custom-designed AI for identifying similar products that could be potential replacements that can recommend potentially more sustainable alternatives for consideration on every product selection.

One-Time/Short-Term Use Demand Reduction

As with non-renewable resource reduction, it’s not easy to identify one-time use demands that can be eliminated without careful consideration of why the demand is there and what the alternative is. However, all one-time use products should be evaluated for reduction and elimination opportunities.

For example, you should analyze:

  • print catalogs, newsletters, (free) magazines and flyers: yes, there is still a generation that likes them, but that generation is shrinking fast as even that generation is hooked on the internet, which allows for faster, quicker, paper free delivery; if you have a small percentage of the customer base that wants paper, at least let them self-select into a subscription and then only print (on demand) what you need to; the per unit price may be a few cents more, but if you’re only printing 1/10th of the volume, big savings in cost and resources
  • printer paper similarly, how much do you really need to print — if your team needs reports on the go, consider supplying everyone with a large tablet (with a display optimized for reading) in addition to their laptop
  • plastic cutlery and cups in the break room use real ceramic and stainless steel

Basically, look at anything that has a short life-span and see if you can reduce or substitute the demand with something with a longer lifespan that will lead to savings in the long term.

Equipment Reduction

Basically, how much equipment are you buying vs. how much equipment do you need? Consider the following:

  • end-user electronics focus on selecting phones and tablets with long shelf-lives and extended warranties, and laptops that can be upgraded to extend their shelf-life
  • IT servers and storage how many do you need to support your secure internal operations vs. how much demand can you shift to the cloud for on-demand computation
  • fleet do you need as much as you have? is it hybrid/electric with a longer lifespan than traditional diesel?

Again, as per the past two situations, every organization is different, and it will take careful review of alternatives to determine where sustainability will bring savings and where it won’t. But, as per our section on non-renewable resources, modern technology can do a great job identifying when there are more sustainable cost-saving options to consider.

However, as with energy and water utilization, at the end of the day, there are many opportunities in a business to be truly sustainable …. and by that, we mean choose environmentally friendly options that save the business a considerable amount of money, especially in the mid-and-long term. That’s what sustainability is truly about.

Sustainability in 2025 and Beyond, Part 5: Sustainability Strategies, Part II (Fresh)Water

In our first installment we noted that while sustainability may have fallen out of favour in the current American political and regulatory environment to the point that we had to counter the Chief Sustainability Officer graphics going around earlier this year with a Chief Sustainability Officer: USA Edition, sustainability, at its core is becoming more and more important to corporate survival. In our second installment, we described how sustainability concerns permeate every department of the organization, and failing to adhere to them is not only unsustainable in the environmental sense, but also in the business sense. In our third instalment we dove into the stakeholder engagement that is required for true sustainability success.

Then, in our last (forth) installment, we started outlining the key areas of focus to identify the key projects that will increase both environmental AND business sustainability, starting with energy. In today’s, fifth, post we continue with key project identification in the areas of (fresh)water and resources.

(Fresh)Water Reduction

Water shortages and scarcity is becoming all too common. More than 50% of the USA — the richest country in the world which, theoretically, could have the best infrastructure — has suffered droughts and water scarcity issues, with scarcity often getting so bad in parts of California that even the US President says they need to open a very large faucet (which doesn’t exist, but it is needed).

It’s so bad in California that they had to serve Nestlé a cease-and-desist order to stop it from taking millions of gallons of water it wasn’t entitled to. (Source: The Guardian). Thus, unless you want your taps to run dry (either due to lack of water availability or the local government agency literally turning your taps off), you need to minimize your water usage.

The major uses of water in most businesses, depending on the business type, are:

  • Restrooms/Showers Old fashioned, high water usage toilets and urinals, and high-flow shower heads (instead of low-flow, high pressure) combined with poor maintenance with constant, unaddressed, slow leaks waste a considerable amount of water. Reductions of up to 50% water usage with proper equipment selection and installation are possible. (Proper selection is key, not all low-flow models actually meet the MaP test measure they advertise, and a high scoring model is key, because you don’t save water if you have to flush two or three times.)
  • Water Cooling This is especially critical in power plants (which can consume millions of gallons of water daily) and IT data centers (which can also consume hundreds of thousands of gallons of water daily). Because contaminates like minerals, scale, and bacteria build up over time and evaporation occurs, water cannot be reused indefinitely, but with proper treatment and filtering and cooling systems (passing through high efficiency refrigerated zones), the amount of freshwater required can be greatly reduced, especially if there is a renewable energy source to power the refrigerant based cooling in the closed-loop system (and extremely good high-efficiency reverse osmosis systems). With today’s technology, except for regular top-up to deal with evaporation, it is possible to recycle water for years, whereas a decade or two ago the systems might have needed to be flushed every few months.
  • Irrigation Many office buildings or facilities also include land with greenery that needs to be maintained, usually with fresh water, which, in peak heat periods, can consume thousands of gallons of water a day — if the facility installs a small wastewater filtration and management system, as well as an underground irrigation system, a lot of the wastewater that goes through its building sinks and showers can be automatically pumped through the irrigation system, minimizing the need for freshwater for irrigation

We’ll continue with the other areas in our next installment.

Sustainability in 2025 and Beyond, Part 4: Sustainability Strategies, Part I (Energy)

In our first installment we noted that while sustainability may have fallen out of favour in the current American political and regulatory environment to the point that we had to counter the Chief Sustainability Officer graphics going around earlier this year with a Chief Sustainability Officer: USA Edition, sustainability, at its core is becoming more and more important to corporate survival. In our second installment, we described how sustainability concerns permeate every department of the organization, and failing to adhere to them is not only unsustainable in the environmental sense, but also in the business sense. In our third instalment we dove into the stakeholder engagement that is required for true sustainability success.

In this, our forth installment, we are going to begin by outlining the key areas in which to focus to identify the key projects that will increase both environmental AND business sustainability.

If you review our second installment, the biggest lifts in sustainability come from:

  • (Non-Renewable) Energy Reduction
  • Freshwater Reduction
  • Non-Renewable Resource Reduction
  • Equipment Reduction
  • (One-Time Use) Demand Reduction

We’ll take each of these one-by-one and outline some of the major areas where there is a lot of waste. In future posts we may dive into the details on how to tackle them (where it’s not obvious).

(Non-Renewable) Energy Reduction

Energy is pricey. You want to reduce your energy needs across the board, and where you can’t reduce any further, you want to ensure that 100% of your energy is coming from renewable sources like Solar, Wind, and Hydro because, in the long term, that is the cheaper energy source.

Most operations have major energy inefficiencies in one or more of the following areas:

  • Lighting. Many office buildings have lights on over half the day, if not way longer, and are still running low efficiency flourescent vs. high efficiency LED, where the former will give off 40 to 80 lumens per watt and the latter will give off 75 to 150 lumens per watt, halving to quartering lighting energy requirements; it may not seem like a lot, but a 40 w T12 flurescent bulb running 12 hours a day for a year consumes 175 kWh; an LED equivalent bulb will consume about 15 watts, or 65 kWh over the course of the year for an almost 38% savings. Now consider that you will likely have at least 1500 of these lighting a 10,000 square meter office (10,000 m^2 x 400 lumens / 2,600 lumens), that’s a savings of 165,000 kwH or about $25,000 if you’re paying 15c/kwH. Now, rip and replace of all of your lighting isn’t cheap, but with a lifespan estimate of at least 50,000 hours for an LED outlet, that’s a 10 year plus lifespan. Estimate about $45/unit for a bulk purchase, or $67.5K plus $28.5K for electrical work, and for an upfront investment of $96K, you’re looking at a savings of at least 250K+ (since we aren’t factoring in WACC) for an ROI of at least 260% (while working towards a green building).
  • Heating: Whether you are heating with oil or off the grid, heating adds up quickly, especially if you are in a climate that drops below 0 for much of the winter. In northern climates, space and water heating can be quite significant since the US Energy and Information Agency estimates these costs make up over 2/3 of energy consumption for home and general office buildings. When it comes to heating, it’s not just the space, it’s the energy efficiency of the space. Poor insulation, leaky windows, poor use of natural light (and heat) can double or triple costs. While you can’t do much about this if you rent, if you are buying a commercial building, before you move in, do an energy efficiency analysis, and if it’s not in the top quartile, gut and redo it. If energy hungry lighting can eat up 200K/year in a large office building, heating (or cooling in hot climates) can eat up 2 Million, with a Million of that being unnecessary. Over decades, you will save 10X your up-front investment.
  • IT: After heating and cooling, the next biggest energy hog in most office buildings is the IT infrastructure and the internal server farm. Especially if the IT department is running older servers three or four generations behind, as older servers tend to be huge energy hogs for the relative computing power and output. It’s also critical to ensure that the IT infrastructure is appropriately sized and continually running at 80% utilization, with the ability to spin up and spin down computing resources as needed.

In addition, in manufacturing, you also have to consider:

  • Production/Assembly Lines: these are huge energy consumers; and energy efficiency all comes down to utilization; if you’re not using the line at 90% efficiency or more, you’re wasting energy; many operations who aren’t using a modern Manufacturing Planning / Execution System (MPS/MES) who think they are efficient will only be operating at 60% or 70% efficiency, at best; talk to the leaders in MPS/MES and even Semiconductor Chip Manufacturing and you’ll be shocked at the efficiency gains (and thus energy conservation) these companies find daily

Finally, in distribution, you also have to consider:

  • Fuel Efficiency, and especially if you are transporting over long distances; are you transporting by air when you could be using ocean; are you transporting by truck when you could be using rail; are you using ethanol or hybrid trucks instead of dirty diesel; are you maximizing for full containers/truckloads or sending half-empty trucks; and are you ensuring that return trips are utilized, or sending them back empty?

We’ll continue with the other areas in our next installment.

Sustainability in 2025 and Beyond, Part 3: Breaking Out the Stakeholder Requirements

In our first installment we noted that while sustainability may have fallen out of favour in the current American political and regulatory environment to the point that we had to counter the Chief Sustainability Officer graphics going around earlier this year with a Chief Sustainability Officer: USA Edition, sustainability, at its core is becoming more and more important to corporate survival. In our second installment, we described how sustainability concerns permeate every department of the organization, and failing to adhere to them is not only unsustainable in the environmental sense, but possibly in the business sense (because sustainability, done right, also sustain costs at an affordable level, and thus profits).

In this, our third instalment, we are going to dive into the stakeholder engagement that is required for sustainability success. As per our first post, stakeholder engagement is required beyond just the business departments for success. It also requires alignment across:

  • investors
  • the board
  • suppliers / contractors
  • customers

Investors

The best sustainability initiatives with the longest term potential often involves up-front investment (which often results in short-term losses), which means that the investors need to be on board for any major sustainability effort, and willing to both make the up-front investment and take the short-term hit to the profit margin (for long term gains).

The Board

The Board, who answers to the shareholders, also needs to be onboard because the minute profits drop year-over-year is the minute the board is going to throw you under the bus when the expected profits that they promised the shareholders (they answer to) do not materialize. The Board needs to see the long-term gain potential, accept the vision, and communicate that to the shareholders, of which the majority will need to see the long-term value of up-front sustainability investments, for the initiative to be supported over the necessary term.

Suppliers / Contractors

As an organization, you are not sustainable if your suppliers are not sustainable, especially if your definition of sustainability is to minimize non-renewable energy usage and reduce carbon in your supply chain. You can’t have a clean operation if all of your suppliers, carbon wise, are the dirtiest drunks.

Customers

You might think you are sustainable if your operation and your supplier operations are sustainable, but like every other business, you depend on business from your customers. Unless you are directly selling to the end consumer, if your corporate customers are not sustainable, and they end up in trouble due to consumer revolt or financial troubles from uncontrolled costs, that’s going to trickle down the supply chain to you. You want to seek out, support, and serve sustainable customers.

Your Business Counterparts

For true sustainability to materialize, the entire organization needs to be on board, not just your team or department. As with anything worth doing, sustainability is a continual journey, not an easily accomplished task as the first leg may consist of the equivalent of a thousand miles of effort. But done right, it’s always worth it.

So now that you understand who needs to be onboard, we can start outlining key projects the organization should start with, focussing on key goals that not only help with regulatory support in regions that require it, but can also be used for brand building.

Sustainability in 2025 and Beyond, Part 2: Breaking Down the Organizational Requirements

In our last installment we noted that while sustainability may have fallen out of favour in the current American political and regulatory environment to the point that we had to counter the Chief Sustainability Officer graphics going around earlier this year with a Chief Sustainability Officer: USA Edition, sustainability, at its core is becoming more and more important to corporate survival.

This is because, it relates to all aspects of a business, including, but not limited to:

  • Operations, Procurement, and Supply Chain
    • Facilities
    • IT Infrastructure
    • Materials
    • Manufacturing
    • Utilities
    • Distribution
    • Marketing & Sales
  • Talent
  • Risk Management
  • Legal and Regulatory Compliance

Operations: Facilities

When it comes to your facilities, sustainability is more important than you realize. Buildings, especially those that are poorly insulated, use old style fluorescent lights, high flow toilets and urinals, and don’t recycle water for their landscaping requirements can use a lot of energy for heating and cooling and a lot of water in their daily operation. Basic sustainability is minimizing energy and water usage, as the cost for both is increasing year after year, month after month, and sometimes day after day, especially where there are shortages. Minimizing your facility energy and water utilization is key to sustainability, not just from an environmental point of view but a cost (and thus profit) point of view.

Operations: IT Infrastructure

Your organizational IT Infrastructure, especially if you are running older servers and storage requirements, is likely an energy hog running 24/7/365. Moreover, if you are careless about your purchases, you can be buying equipment that uses more rare earth minerals than necessary, and those mining operations aren’t that clean.

Operations: Materials

Materials are a cornerstone of sustainability, especially if they are not renewable. We like to think otherwise, but there is a fixed amount of any non-renewable material on this planet, and unless we learn to recycle and reuse it, we are going to run out (especially since we shoot so much debris up into space and/or let it crash into the ocean where it is irretrievable from the ocean floor). As for renewable biological materials, unless you can replenish them in a year (like food-stuffs), without proper management, they can run out too.

Operations: Manufacturing

Like facilities, production processes can be energy and water inefficient. Moreover, improper or unoptimized production processes can lead to a lot of material waste, exacerbating material sustainability problems (and costs) even further.

Operations: Distribution

Distribution requires vehicles, and most of those still require a form of combustable fuel. The further you have to transport, the more non-renewable fuel you are going to burn, the more you are going to spend, and the more carbon you are going to produce. Even if you have a hybrid local fleet, when you amortize the carbon that went into producing that vehicle and that battery, if the production operation was not sustainable, you may still contribute more carbon in your calculations than if you had burned high efficiency ethanol. (Also, don’t believe the claims that EVs are carbon neutral between 25,000 and 40,000 kms. Most of those make unrealistic assumptions about the cleanliness of the battery and manufacturing supply chains as well as the availability of renewable energy to recharge which just aren’t realistic. We did our own calculations, and, in some cases, those EVs are still dirty at 1,000,000 kms! Now, any EV created with a modern production process using a battery supply chain that is sustainability focussed should be carbon neutral within 100,000 kms, and run for up to 300,000 kms, effectively making them carbon positive over their lifetime compared to non-EVs, but this is not guaranteed. As with every other marketing claim, you have to verify!)

Operations: Marketing & Sales

Marketing and Sales may seem low-stakes in sustainability, beyond the fact that they can quickly blow their budgets and quickly put your finances in the gutter (leading to existence sustainability), but depending on how they conduct their sales and marketing campaign, they can contribute a significant negative impact to your sustainability bottom line. For example, if sales believes that every meeting and demo has to be done in person across the country, via business class flights, that’s a lot of cost and carbon. If marketing loves their high-gloss fancy print collateral, forcibly handing out over-the-top brochures to everyone who walks by the booth, that’s a lot of wasted paper and money.

Legal & Regulatory Compliance

Let’s face it, despite all of the above, most organization’s won’t put more of a focus on sustainability than they think they need to, because they still believe the path to profitability is more sales (even though at some point the cost of sale becomes too high because their core market is saturated), and failing that, cost cutting through Procurement. Typically, the focus they believe they need is whatever focus is necessary to meet the minimum legal and regulatory compliance.

In some jurisdictions, especially those that will levy big fines or penalties if a requirement is not met, this is currently the leading contributor to sustainability, even though the leading contributor should be the long term business sustainability and profitability that can result from the right sustainability focussed investments.

Risk Management

Without good risk management policies, not only is there no guarantee that the future risk of not being sustainable will never be taken into account in any decision made by any operational department, but a real risk that Legal might not be aware of and miss a (coming) regulatory (reporting) requirement and the organization will end up in hot water.

Talent

Talent is key to your operation, and it’s often the hardest to attract, develop, maintain, and sustain over time. However, you can’t sustain a sustainable operation without the right talent. You need to identify the raw skillsets required to t, hire the talent, develop the talent, mentor the talent, and then have them train and mentor the next generation of talent before they move on or retire. However, if you don’t have this talent, you will make unsustainable decisions across your entire business.

There’s quite a lot to sustainability, but there are some commonalities that, if focussed on, can make a big difference. In a future installment, we’ll review some of those.