Green Is Good

Columns From: 2/1/2017 Automotive Design & Production, , Editor-in-Chief from Gardner Business Media, Inc.

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• The Toyota Motor North America Environmental Action Plan for FY 2014-2016 called for the company to reduce energy consumption per vehicle produced by 12 percent on a FY 2010 baseline. By FY 2016 it reduced energy per vehicle produced by 23.6 percent. It targeted a reduction of greenhouse gas emissions from operations by 12 percent per vehicle produced. The reduction it achieved by FY 2016 was 22 percent per vehicle

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• GM announced that it was planning to have a total of 150 landfill-free facilities—both production plants and offices included—by 2020. In 2016 it reached 152 landfill-free facilities. Of them, 100 are manufacturing sites and 52 non-manufacturing. The company calculates that it has generated as much as $1-billion from recycling during the past few years

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• In 2000 Ford announced that it would begin reducing its water usage per vehicle produced. From 2000 to 2015 it saved 10-billion gallons of water, a decrease of 61 percent. It is on track to reduce water usage per vehicle by 72 percent.

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• In FY 2016 299 suppliers to Honda North America reported their CO2 emissions data to the company. Those suppliers represent, on a dollar basis, 95 percent of new-vehicle parts purchasing. Approximately 2,500 metric tons of CO2 emissions were avoided in FY 2016 on new-vehicle parts shipments thanks to a green logistics strategy used by Honda North America.

These numbers are impressive. And by no means was this an exercise in cherry-picking in order to find them.

While I’ve just cited four companies here, I could have found four other automotive companies that are doing their parts in the arena of sustainability. And note that in the examples it isn’t about the reduction of emissions in the use phase. Every single auto company is working hard to reduce those.

But tailpipe emissions are subject to regulations worldwide, so the fact that automakers are doing their best to reduce those numbers is as much about being able to sell cars and trucks as it is of being good stewards of the planet. However, other initiatives are not predicated just on law. They are also a recognition that it is important to maintain this planet of ours because it’s the only one we have.

What’s more, it makes good sense from a business standpoint. Consider this from John Bradburn, GM global manager of Waste Reduction: “We view sustainability as a business approach. We look at ways we can grow and strengthen our business for the long term, and that often means reducing our environmental footprint while maximizing social benefit.”

In a new book, The Sustainability Edge: How to Drive Top-Line Growth with Triple-Bottom-Line Thinking (University of Toronto Press), authors Suhas Apte and Jagdish N. Sheth argue that for the past several years companies have been pursuing a competitive advantage through such efforts as Total Quality Management and Customer Relationship Management.

They maintain: “The next major competency that businesses will need to pursue and fully integrate to gain a sustainable and consistent competitive advantage will be sustainability itself.”

And it may be more than just an advantage in that it may be something of a requirement to meet the demands of a growing cohort of consumers: the Millennials. The authors cite a 2015 Nielsen global sustainability survey that shows that while overall 66 percent are willing to pay more for sustainable products and services, nearly 75 percent of the Millennial respondents said that they’d pay more.

Obviously, those companies that aren’t operating in a way that is deemed to be responsible—sustainable—are going to sell fewer products or services to that group. And even if the number is wildly off—say that it is 50 percent—recognize that the Millennial generation, those who were ages 18 to 34 in 2015, outnumber the Baby Boomers: according to the Pew Research Center, U.S. Millennials numbered 75.4-million in 2015 compared with 74.9-million Boomers, and the delta is increasing with time.

The Sustainability Edge explains the ways and the means, the hows and the whys of companies executing in a way that is, simply, more responsible. And because this is a business book, it provides examples of a variety of companies that have undertaken efforts to improve their capabilities and outputs so as to achieve financial, environmental and societal success (the triple bottom line).