Manufacturers & Distributors ARTICLE -

Go Green to Save More Green

Sustainable processes can attract global lenders and customers

Target Audience: Manufacturing and Distribution Companies, M&D Industry, Manufacturing Distributors, Energy Tax Rebates Interest, Federal Energy Tax Credits Interest, Green Tax Credits Interest

Can you, as a manufacturer, be environmentally responsible and a good businessperson at the same time? The answer depends on whom you ask, but a growing number of experts are responding with a qualified “yes.”

Changing government rules — particularly outside the United States — along with evolving technology and growing public awareness of the value of “green” all are helping to push companies into more sustainable business practices. Fortunately, such practices also are starting to show some benefits on the bottom line as well as for the environment.

Laws Push Sustainability

Hybrid electric vehicles, compact fluorescent light bulbs and software distribution through the Internet are just some of the advances cited by environmental economists. But the same experts note that U.S. companies continue to lag behind countries in Europe and Japan in embracing eco-friendly processes.

The gap is due in part to stricter government regulations abroad. More than 28 countries outside the United States have adopted product “take-back” laws that require manufacturers, not consumers, to dispose of end-of-life products and packaging, according to Business for Social Responsibility, a nonprofit consulting and research organization.

Such laws may force multinational U.S. companies to decide whether to make different products in the United States and abroad — a decision that may encourage broader adoption of sustainable processes at home.

Bottom And Top Line Benefits

Not only are states offering energy efficient tax credits among those federal energy tax credits, but in the United States, green technologies can save money for companies, making them more appealing. One example is microfiltration techniques that allow metals manufacturers to extend the useful life of metalworking fluids — fluids that University of Michigan researchers say can cost large plants more than $2 million a year to replace.

Manufacturers also are discovering the value of using recycled materials for their products. Paper and cardboard manufacturers that use recycled products, for instance, see reduced supply costs because the suppliers don’t have to separate cellulose fibers from wood. Similarly, some cell phones contain components that can be reused economically when they’re disassembled.

In addition to the direct cost savings that green manufacturing can generate, many firms are seeing “top line” advantages. Companies with sustainable policies are becoming more attractive both to lenders and to consumers as the global marketplace grows more environmentally sophisticated. Lower production costs and increasing sales make environmentally responsible companies better risks for lenders. And you need only to look at Ben & Jerry’s, The Body Shop and Whole Foods Market to understand the advantages that sustainable business practices can bring to brand and corporate images.

Conservation Can Bolster Innovation

Sustainability can breed innovation, as well. If you encourage your research and development team to devise ways to reduce the amount of materials needed to make products without sacrificing — or, even better, while improving — quality, you’re working to benefit your company and the environment simultaneously.

One leader in sustainability has been Chiquita, which reduced the amount of chemicals used on its farms by 14% over five years, for an annual cost savings of $5 million per year. Other companies with clearly defined sustainability policies in place around the world include Unilever and Procter & Gamble.

These and other environmentally sensitive businesses look beyond products and subassemblies to consider waste streams, energy use, worn tools and catalysts, and, often, ways to improve the communities in which they do business by increasing access to potable water or child nutrition.

Eco-Friendly Business = Good Business

Such companies are finding there is a business case to be made for sustainability, and they can balance environmental and business concerns to the benefit of all. As they demonstrate success with green manufacturing, they’re also building the case for increased cooperation between the government and corporations — a case many say must be made if the environment is to sustain business.

Think Green In-House

When manufacturers think of “going green,” they often focus on externals, such as using recycled components or reducing greenhouse gas emissions.

You also should consider how environmental friendliness can improve your internal operations. Sustainable buildings can improve morale and productivity among employees, as well as reducing electrical and water/sewer costs.

If your plant has no windows, higher-than-normal noise levels, inadequate temperature controls and dingy, drab colors, your employees will be eager to leave and not so eager to arrive. By contrast, a properly designed, sustainable building not only reduces pollution and uses resources efficiently, but also enhances employees’ performance and attitudes.

Your building is more than a place that keeps your employees out of the weather. It’s the place your employees — and you — spend at least 40 hours every week. If you make it light, airy and attractive, you’ll find those hours are more pleasant — and more productive.

Find out how our accountants can help your business learn more about energy tax credits and rebates. Email us or call us at 1 (888) 875-9770.

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