Sustainable technology is no longer an expensive drag on a company's finances – economies of scale and smarter working practices now mean it can save a business millions of pounds
SOURCE: Darden Restaurants
As procurement professionals consider how to balance environmental benefits with financial savings, they are increasingly finding sustainable technologies can bring together both goals.
These sustainable technologies include smart electrical processes; renewable energy systems; and innovative, even disruptive, software programmes that enhance energy efficiency.
Of course, sustainability professionals still confront objections within their companies when introducing these new systems, usually over the cost or doubts about their relevance to a firm's overall strategy. However, such objections are fast becoming outdated.
Constraints on the world's resources mean forward-thinking companies that revamp their infrastructures, for instance in the IT products they buy and the energy they consume, thrive. Smarter and more nimble companies that plan ahead will withstand both financial and environmental storms as conventional energy prices surge.
SAP is one company that has taken sustainability seriously and as a result gained dramatic financial savings.
In 2007 the US-based software giant reached its highest level of carbon emissions. To tackle this, the company set an aggressive path to reduce its annual emissions to 2000 levels by 2020 – an initiative led by chief sustainability officer Peter Graf. The result so far, according to Graf, has been more than $250m (£160m) in cost savings.
Revamping the company's printing system was a start. "At one point, if our employees stacked all of their printouts in one year, they would stand as tall as Mount Everest," says Graf.
The company started the revamp by raising awareness among its 60,000 employees that small actions could add up big if everyone was ready to change their daily printing habits.
To that end, SAP's engineers developed a proprietary software system that helped shift employees' behaviour. For example, every employee received a PIN number that was needed to activate a printer with the goal to prevent print jobs from piling up at printing stations.
The company also changed the ratio of printers to employees from 1:7 to 1:17. By decreasing the average number of printed pages from eight to six per employee per day, SAP reduced its total internal printing by 13%.
Since 2007, Marks & Spencer has expanded its sustainable business model – known as Plan A. M&S's success in building a truly "triple bottom line", which takes into account the financial, social and environmental performance of a company, starts with the firm's sustainability group engaging with the finance team.
In many organisations finance has looked suspiciously at sustainable technologies because they appeared to be more of a financial liability than a path towards cost savings.
Involving the finance team at M&S, however, led to a more holistic understanding of the business case for various technologies. According to M&S's head of delivery, Adam Elman, such co-operation fostered a spirit of experimentation and innovation within the company.
If finance determined a certain technology was too expensive, then Elman and his team could work with manufacturers to arrive at a more competitive price. "Technology only provides information," says Elman. "What we need to do with that information is build on it and embed it within our employees' daily jobs."
The investment in new energy-efficient technologies, as well as training employees and coaching them to modify their behaviour, has reaped enormous savings for M&S. Together, LED lighting, passive infrared sensors for switches and a centralised control system for reporting on all of the company's energy use improved the firm's energy efficiency by 28% and saved M&S £21.8m annually.
Energy efficiency measures are also embedded throughout the retail chain's fleets. Software that improves route planning and offers lorry drivers feedback on whether they are breaking too hard or accelerating too quickly helped M&S save an additional $3.3m a year. As conventional fuel prices continue to rise, M&S expects these cost benefits to grow.
US company Darden Restaurants is in the midst of a massive technological and behavioural shift throughout its operations. As Darden's sustainability manager, Brandon Tidwell, explains, professionals in Darden's supply chain, facilities and operations departments are working on melding energy efficient technologies with employee training to reduce the company's energy costs.
Changing the lighting to energy-efficient compact fluorescent lights in back areas, such as kitchens, and installing LED bulbs in the restaurants where customers dine was one resulted in immediate savings.
Smart lighting, cooling and heating technologies together formed a smart energy management system (EMS) that uses energy as efficiently as possible without affecting the customers' experience or employees' comfort.
In 2010 and 2011, Darden invested $3.3m (£2.1m) annually to expand its EMS systems across more properties – and as a result the company saved $6m (£3.9m) in energy costs. Darden expects the total savings to reach $30m (£19.4m) by 2015.
The installation of these new systems also inspires additional training and employee engagement; Darden organises "green teams" at each location and tasks them with explaining the new systems and to encourage more responsible and sustainable behaviour at work.
With a wide array of sustainable technologies now more cost-effective and scalable, investment in these systems are now easier to pitch to board members than ever before.
Several years ago, investment in these new technologies could rely on government incentives or powerful social factors, says Tom Rooney, the chief executive officer of Energy Recovery.
Now the market is deciding which technologies will thrive or fade away. Rooney's company, which manufactures energy recovery devices, has benefited from the vigorous demand for smarter energy technologies.
First launched in desalination plants, Energy Recovery's devices are now making headway in the oil and gas, chemical, mining and even the food and beverage sectors.
With the market now looking at renewable energy more kindly because of its decrease in price, companies such as Rooney's are flourishing. But this is a solution that can suit any business – the consequences of doing nothing and not thinking long-term, are actually far more damaging and costly to a business.
This content is brought to you by Guardian Sustainable Business in association with Kyocera. Produced by Guardian Professional to a brief agreed with Kyocera. Paid for by Kyocera. All editorial controlled and overseen by the Guardian.
KEYWORDS: sustainable technology, cost efficiency, Investment, responsible investing, energy-efficient