I attended the Pew Center’s conference in Chicago last Tuesday (April 6, 2010) and one thing is clear amidst all the doom-and-gloom in Washington today, companies are acting and saving substantial amounts of money. Outside the Beltway, Fortune 500 companies are working on the issue of efficiency, sustainability and greenhouse gas emissions. The Pew Center’s new report called “From Shop Floor to Top Floor: Best Business Practices in Energy Efficiency,” says that “efficiency is the largest near-term greenhouse gas reduction opportunity.” And studies cited in the report say that efficiency for industrial, commercial facilities and residential buildings, and vehicles comprise the largest potential emission reductions, which are often also the lowest cost options that produce the most benefits over time.
Okay, great. Who’s doing that? Speakers at the conference came from some of the biggest names in business – Dow Chemical, IBM, Toyota, United Technologies, Pepsi and Best Buy. Each representative had a different approach and came from different corporate cultures but all of them sent the same message “shoot big.” Fred Moore of Dow Chemical, said the company purchases the equivalent of 10 percent of all the oil the US imports. Energy costs represent about 50 cents on every dollar spent at Dow, mostly in the form of natural gas. In 2007, when natural gas prices skyrocketed, the company’s energy expenses rose from $8 billion to $27 billion. That’s bad, but it would have been worse had the company not implemented a goal in 1995 to cut energy use 20 percent per pound of product by 2005. Dow actually reduced its energy usage by 22 percent. That initiative saved Dow almost $8 billion when energy prices shot up.
Finding efficiency within the company is critical and is a major initiative for Dow’s CEO Andrew Liveris, who called for cutting another 25 percent off the energy needed to make a pound of product by 2015.
“That is a difficult lift,” Moore says.”I’m not exactly certain how we’re going to get there. But the bottom line is, as the big dog at the trough, it’s not only good for the planet but its good for Dow’s bottom line.”
Since 1994, Dow’s efficiency efforts have saved the company over $9.2 billion.
Pepsi is another story worth noting here as well. Rob Schasel, director of energy and resource conservation at Pepsico, said the company’s goal for its FritoLay unit was to reduce electricity usage by 20 percent, fuel usage by 25 percent and water usage by 50 percent from a 2006 baseline, by 2015. How are they doing? So far, the company has reduced its electricity usage by 22 percent, fuel usage by 35 percent and water usage by 44 percent. And the bottom line? Pepsi says it saved more than $60 million since 2000 and realized more than a 20 percent rate of return.
Those are just two examples from the report and the conference. But it shows that there is much in the way of efficiency that can be done. Dow is also a member of the Chicago Climate Exchange and proponent of carbon cap-and-trade. Why? Because they obviously believe that there is more efficiency left to be squeezed out of the company, more innovations that can help improve its emission footprint. And in the world of cap-and-trade, such companies are rewarded for it.
Here’s one final tidbit from the conference that illustrates just how effective some simple solutions are. Suzanne Malec-McKenna, City of Chicago commissioner for the Department of Environment, said that its rooftop garden program has proven its worth, especially in reducing the amount of heat buildings absorb and emit on a given day. Chicago’s City Hall has become the example for the rest of Chicago, with a well manicured rooftop garden. But the city wanted to see just how much heat it was absorbing on an overcast 74 degree day, versus a blacktop roof building nearby. The result’s? City Hall’s temperature was 74 degrees while the other roof was 156 degrees. I can only imagine how much in air conditioning can be saved through such a solution.
The answers are out there. There is real action, real money and real results being made.