The Green Enterprise: the road to sustainability

By Ann Calder, Retail Solutions Specialist, SAS Canada 

Toronto  (04 May 2009)  –  With increased customer awareness and consumer demand about the virtues of going “green,” getting your company to become more environmentally friendly is a winning strategy. But sustainable business practices are relatively new to many Canadian companies. The most common question I get is: “Where do I start?”

There is no direct “green” path laid out for businesses to follow, which means the chances of taking a wrong turn are high. Yet the good news is that with no set roadmap to sustainability there are many places to begin.

Companies choose to go green for several reasons: environmental concerns, shareholder or public pressure, cost cutting opportunities, corporate image, and regulatory requirements. Many leading retailers understand environmental and social responsibility and take responsibility and create and vision. This vision is typically linked to driving business value.

Begin with a vision
Sustainability is central to corporate social responsibility (CSR). However, leading businesses understand that sustainability must ultimately link to business value. Altruism serves no business purpose in a vacuum – it needs to support the bottom line. Once the vision is in place you will need a green champion – a leader who can work across the whole organization with executive support.

And as the old saying goes, you cannot manage what you can’t measure. So determine your current carbon footprint using standard reporting measures such as the Global Reporting Initiative; then apply scenario-based modeling to help decide what green priorities to tackle first.

Many retailers have found that store design, packaging and the supply chain – including transportation – offer the biggest opportunities to reduce their carbon footprint. Other areas to investigate are marketing (save trees by sending out flyers only to customers profiled as most likely to respond), and IT (optimize your data centre to use fewer servers, which saves both on power and cooling costs). 

The Green Enterprise Checklist below will help you identify specific areas to create a greener business. Consider the following to determine ways to minimize your company’s ecological footprint while navigating the road to sustainability.

Green governance
Once the corporate sustainability vision is in place you will need a green champion – a leader who can work across the whole organization with executive support, and with a goal of integrating green into every facet of the business. This person will lead the charge internally, pushing for greener practices and policies by communicating the benefits of sustainability to everyone in the organization: merchandising, logistics and operations.

It’s important to have employees onside, so finding innovative ways to recognize and reward green accomplishments at the individual, departmental, and organizational levels will inspire everyone to bring forward their ideas and enthusiasm.

1. Your business operations
Green architecture is making inroads in the retail world as large companies like Wal-Mart, Best Buy and Home Depot are building or retrofitting stores to LEED (Leadership in Energy and Environmental Design) specifications. Retailers who rent their facilities will need to get landlords onside to make changes. Most will be supportive of plans that outline possibilities for savings through energy efficiency.

Data compiled by Platts Research and Consulting shows retail buildings in the U.S. spend an annual average of $1.21 per square foot on electricity and 14 cents per square foot on natural gas. In a typical retail building, lighting, cooling and heating represent 69-84% of total use depending on climate, making those systems the best targets for energy savings. BC Hydro provides an excellent guide to managing energy costs in retail at www.bchydro.com. Immediate areas to consider:

Reduce unnecessary lighting:

• Evaluate actual lighting needs since many spaces are over lit.
• Bring in a lighting consultant who can review your lighting layout for appropriate light levels, quality, color rendering, colour uniformity and energy efficiency.
• If your building gets plenty of natural light, experiment with turning off lights near your windows. 
• Repaint interiors in white or a light colour to increase reflection.
• Install motion detectors in low-traffic areas like restrooms, kitchens, storage facilities and meeting rooms that automatically turn off lights.

Light right:

• Replace incandescent light bulbs with compact fluorescent bulbs.
• If esthetics demand incandescent lighting, reduce the bulb wattage.
• Replace fluorescent tube lighting with energy-efficient T8 tubes, which are 50% more efficient than older models.
• LED lights may be appropriate for areas such as display cases or signage. They use only 10% of the energy of incandescent and last 10-25 years.

Take control:

• If single light switches control large areas it may pay to wire in more switches maximize lighting control.
• Install timers or photosensitive units that turn lights on and off based on changes in natural light.
• Consider installing a centralized energy management system (EMS) to manage building components such as lights, heating and air conditioning, and equipment. An EMS can save 5-30% in energy costs and pay for itself within two to four years
  

Optimize heating and cooling:

• Ensure your building is properly sealed including weather stripping and caulking doors and windows, and ensuring that the building is properly insulated.
• Install electronic programmable thermostats, which automatically adjust the building's temperature.
• During winter, heat your building to a maximum of 21°C (70°F) when occupied, 16°C (61°F) when unoccupied.
• Cool your building in summer to no lower than 24°C (75°F) when occupied, and avoid using the air conditioner overnight when unoccupied.
  

Standard procedures and protocols: 

• Turn off exterior, safety and security lights upon arrival; leave only necessary lights on after hours.   
• Keep energy use to a minimum for early or late skeleton crews. 
• Set thermostats to reach optimal temperatures 30 minutes to an hour after employees arrive; set back temperature an hour before closing. 
• Turn off lights near windows and doors during daytime, and in unoccupied areas. 
• Open your building, if possible, on cool summer nights.
• Adjust thermostats for weekend closings. 
• Turn off your water heater if you'll be closed for three days or longer.
  

2. Your Merchandise

Successful businesses know they need the right product mix for their target audience. In sourcing green products, they must find a balance between sustainability and economy. Research a supplier’s product development philosophy to determine if their values resonate with your green vision, as well as fit the needs of your customers.

Sustainable products:

• Provide sustainable/green versions of products if available. Visit www.sustainableproducts.com for more information.
  

Recycling programs: 

• Partner with local and national environmental agencies or salvage companies to find creative solutions to increase recycling options.
• Sleep Country Canada’s Donated Bed program provides customers’ gently used mattresses to needy families.
• Sleep Country diverts thousands of mattresses from landfill each year by paying a Toronto-based recycling depot to break down beds and recycle the components.
• Staples/Business Depot takes back used ink and toner cartridges and recycles them through a patented cleaning and remanufacturing process.
• For every eligible cartridge dropped off by a customer, the retailer donates $1 to participating schools across Canada.
  

Buying locally: 

• Educate yourself on when buying locally make the most business and environmental sense. While buying locally certainly helps the local economy it is not always the most viable option from an environmental perspective.
• Buying locally tends to work best for items like fresh produce. Organizations like Greening Greater Toronto (www.greeninggreatertoronto.ca) can provide resources for finding local suppliers that fit a retailer’s product mix.
  

3. Your Supplies

Plastic bags are environmental enemy No. 1 in the retail world. An estimated 1.2 million barrels of oil are needed to make all the plastic bags used in Canada each year. Retailers – notably grocers like Loblaws – are responding by charging a fee for plastic bags to encourage customers to bring their own bags. Other steps you can take:

Recyclable wrapping materials:

• Source environmentally friendly retail packaging, tissue, merchandise bags and more online. Visit http://www.sustainablepackaging.org/index.htm for resources.
  

Eliminate excess packaging:

• Buy from suppliers who are actively reducing the amount of packaging shipped with products, and lobby non-compliant suppliers by sharing your green vision and asking them to implement sustainable strategies of their own.
• Wal-Mart and other major retailers have developed standards and requirements for their suppliers which highlight environmental concerns while controlling product, energy, and waste disposal costs.
  

Limit use of plastics: 

• Stock “concentrated” products from manufacturers that are made with less water as a means of shrinking the size of plastic containers.
• This also reduces the environmental impact associated with shipping.
  

Classify your waste:

• Figure out what can be saved and reused?
• For example, refurbish shopping carts instead of replacing them;
• Use rechargeable batteries for in-store displays;
• Standardized the use of reusable crates and totes rather than cardboard boxes for shipping.
• Work with municipalities to ensure your stores fully participate in local recycling programs.
• Implement a recycling policy with blue-box areas for office supplies, bottles, cans, papers etc. If available, add green bin recycling.
• Visit municipal websites or call 311 to inquire about recycling programs.
  

4. Your Advertising and Marketing

Reduce printed material:

• Think about reducing marketing materials using printed flyers and catalogues. You can do this by defining target markets and striving for efficiency in delivering advertising materials will save money and trees.
  

Optimize outbound communications:

• Business analytics technology can improve customer relationship management outcomes by making the most of each individual customer communication.
• Retailer can increase marketing return on investment by determining the best offers for individual customers, and reduce the amount of print advertising through more targeted and specific offers.
  

Promotion price and optimization: 

• Forecasting software enables retailers to maximize revenue and / or profit for a time-specific event as well as model alternative promotional scenarios and assesses their impact on revenue and profitability.
• Analytics solutions can predict the best combination of promotional vehicles and determine potential halo and cannibalization effects of a campaign.
  

Eco-friendly paper and ink:

• The Forest Stewardship Council can help you source printers that use recycled or low-impact paper and vegetable-based inks.
• Visit www.fsccanada.org for more information.
  

Customer communication: 

• Make your sustainability vision a core element of how and what you communicate to customers.
• Use existing collateral types such as flyers, in-store signage and advertising to promote your company’s green story.
• Create a webpage to promote your sustainability message and educate customers about how your corporate vision is achieving tangible results.
• Consider social media efforts including blogs, wikis, email newsletters, and tweets as a means of disseminating your messages.
  

Green products: 

• Showcase your eco-friendly products in a consistent way by using racks and displays made from recycled or sustainable materials.
  

5. Your People

Employees must be trained to understand the corporate green vision, so they can share with customers what the company is doing as an organization to support a sustainable environment. Promote buy-in from front-line staff through an incentive program or company-wide recognition for their green initiatives around the following areas:

Low-carbon transportation:

• Encourage staff to use public transit or carpool by offering subsidies.
• The City of Calgary found that driving 15 km a week less saves about 340 pounds of CO₂ per year.
  

Reduce, reuse, recycle: 

• Cut printing and paper costs substantially by setting all internal printers to default to double-sided printing.
• Eliminate disposable cups in the lunchroom in favour of personalized mugs and glassware.
  

Community activities: 

• Sponsor a tree-planting program or municipal gardening initiative and encourage staff to participate.
• Recognize staff efforts at company meetings or through internal communications vehicles like blogs, websites or newsletters.
  

Ann Calder is a Retail Solutions Specialist with SAS Canada, the leader in business analytics. For more information on how to reduce your company’s environmental footprint please contact Ann.

* SAS and all other SAS Institute Inc. product or service names are registered trademarks or trademarks of SAS Institute Inc. in the USA and other countries. ® indicates USA registration. Other brand and product names are trademarks of their respective companies. Copyright © 2009 SAS Institute Inc. All rights reserved.

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