Recently, a question was asked in a forum on a website. "Is it possible for companies to save money and lower their carbon footprint?" The answer is yes for many companies. In fact, going Green may be the only way many companies could survive this recession. In the past, companies have survived recessions by cutting employees, performing business process re-engineering, and other techniques.
Energy efficiency/Green solutions are an area which most companies have not focused on in past recessions. As a result, this route represents a new area of cost savings. Business Process Re-engineering (BPR), employee cuts, and other techniques have been done many times before. Each time these cost measures pull in less cost savings. Process have been re-engineered .Employees have been cut to the point where companies lose revenue and services if they cut anymore. Companies are becoming desperate for new avenues of costs savings. Even profitable public companies have to cut available costs because of the economic forces driving down the stock market.
With new technology and favorable tax codes, new avenues of savings are possible. Areas which have traditionally been considered fixed costs are now no longer fixed. The problem is the box. You remember the box. Traditional thinking is referred to as thinking inside the box. Non-traditional thinking is called thinking outside of the box. The problem is that many companies are stuck thinking inside the box by repeating the same old recession cycle cost saving strategies. They know that cutting employees had saved money in the past so why not cut employees again? Why? There are many reasons: loss of employee morale/loyalty, productivity loss, and the eventual rehiring costs for recruiting and training. What about re-engineering business processes? Most companies have re-engineered processes repeatedly. Any significant cost savings have already been saved.
Ecologically friendly cost savings have rarely been investigated to any great extent by the average company. Paper recycling is done in more companies than energy audits. Most companies go through a similar cycle during economic downturns - cut employees, cut product lines, and re-engineer the business. When the economic cycle returns to the positive, the same companies go through the same cycle. Rehire employees, expand the product lines, and re-engineer the new business processes. The problem is that this cycle reduces not only costs but limits production and revenue.. Cutting employees removes productivity. Rehiring employees incur costs through recruiting and training
How do companies get these savings? There are many ways depending on the type of company. They include using energy as a consideration when doing projects. In many cases, no savings are possible. However, in some projects huge savings are available. Using telecom companies as an example, energy efficient data centers cost about the same as regular data centers. This concept is at least five years old. However, regular data centers are still being built, even when energy represents the majority cost in a data center. Companies are stuck thinking inside the box. They take the easy route. Regular data centers are still being built. As a result, companies are forced to rely more heavily on cost savings are being sought through employee cuts, BPR, etc.
"Is it possible for companies to save money and lower their carbon footprint?" If a company looks at conservation from the standpoint of cost saving, then yes. Companies can increase revenue and reduce its environmental footprint. With this economy and the reduction of available capitol - cost saving measures become more important than usual. Unlike during previous recessions, the technology exists which will save energy and may also qualify for tax credits. Tax credits are available at the federal, state, and municipal levels for green buildings.
How do companies get savings from reducing their carbon footprint? UPS for example identified more cost efficient delivery routes. They identified routes which focus on right turns rather than left turns. This was made possible through the use of traffic simulators. Other companies are making the heating/cooling in their buildings more cost efficient while at the same time reaping benefits from tax breaks.
Are there other benefits from companies seeking savings through reducing their carbon footprints? In the words of James Champy.
'Not a company exists whose management doesn't say, at least for public consumption, that it wants an organization flexible enough to adjust to changing market conditions, lean enough to beat any competitor's price, innovative enough to keep its products and services technologically fresh, and dedicated enough to deliver quality and customer service.'
This is easier for a company to obtain if it does so through green technologies and green tax credits in addition to other techniques.
Andrew Horan is a member of the Paskamansett Project.
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