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evolve insights: “the business of business”

Organizational Sustainability is helping companies increase profits.

Posted by Steve Hockley

Nobel Prize Winning economist Milton Friedman was famous for his statement that, “the business of business is business. “  He believed the best thing a company could do for society was to maximize its profits, and any other activities related to social or environmental causes were unnecessary and possibly detrimental to business and society. Yet, if you have been following the latest business and sustainability related news, you are probably inundated with daily headlines like: “Why Employee Engagement is Critical to Sustaining Sustainability”, “Private Firms Invested $400 Billion in Green Tech So Far in 2011”, “10,000 Commercial Green Building Projects Earn LEED”  or “Google Reveals Carbon Footprint.” 

Performing a quick scan of these articles points to one thing—businesses have decided that these initiatives are far from unnecessary or detrimental— and they are pursuing them now more than ever. But, if the business of business is business, the question is why?  The answer—PROFIT.

As evidenced by yet another headline–“CDP’s Annual Report Finds Sustainable Companies More Profitable”, sustainable companies have not just reached market parity with firms who do not invest in sustainability initiatives, they are making more money than them!  In fact, Global 500 companies that have demonstrated leadership in carbon disclosure or performance yielded twice the average return as the index as a whole between January 2005 and May 2011, and nearly 60 percent of respondents’ emissions reductions efforts paid for themselves in three years or less.

It is not just Global 500 companies or even for-profit institutions alone that understand the financial implications of sustainability, or are taking measures to significantly reduce their environmental impact.  Many companies, non-profit organizations and learning institutions right here in the Pittsburgh region have begun to aggressively pursue sustainability knowing that they can increase their top and bottom lines while doing the right thing.

Pittsburgh-based organizations like Alcoa–the World’s Leading Producer of Aluminum, Carnegie Mellon University—a leading technological institute, Giant Eagle—a leading grocery chain that is committed to continuous improvement, and The David L. Lawrence Convention Center—the First LEED Gold convention center in the country, have all made serious commitments to sustainability.

AlcoaAlcoa commitment to sustainability aims to build financial success, environmental excellence, and social responsibility in order to deliver benefits to all of its stakeholders.  In this context, evolveEA has worked with Alcoa to certify its Corporate Headquarters under the LEED for Existing Buildings:  Operations and Maintenance (EBOM) standard.  The project has saved the building over 15% on its energy usage, led to the reduction of over 200 tons of greenhouse gases annually, and saved a significant amount of money.

 

Carnegie Mellon UniversityCarnegie Mellon University (CMU) is an internationally recognized technological institute that is strong in computer science, architecture, engineering, and sustainability.  evolveEA has played a significant role in CMU’s a strong record of implementing environmental initiatives.  We have managed the LEED certification of 5 of its facilities, helped to develop campus wide sustainability policies, served on the Green Practices Committee, helped to build in-house capacity and policy development for campus issues, and worked to integrate sustainability into the curriculum.

Giant EagleGiant Eagle has examined sustainability at all levels of its buildings and operations.  evolveEA has been Giant Eagle’s sustainability consultant since 2003, has worked to generate, evaluate and implement project based sustainability efforts, as well as assisting with chain-wide organizational change, evaluating prototypes and communicating their commitment to shoppers and staff alike.  Additionally, evolveEA has worked with Giant Eagle to certify 6 LEED stores, and has performed a chain-wide waste minimization and sourcing investigation to determine and innovate best practices and logistics.

David L Lawrence Convention CenterThe David L. Lawrence Convention Center is committed to being a sustainability leader in the convention industry.  evolveEA has worked with them to perform a holistic sustainability evaluation of their facility and operations, which has been in support of their forthcoming submission for LEED EBOM.  In the process, evolveEA and its team has identified opportunities to significantly add to the Convention Center’s top and bottom lines while improving its overall environmental performance.

Right now, the actions of businesses and organizations like these represent the most potent means for addressing sustainability issues.  Unhampered by the red tape that is our federal government, these organizations have the ability to quickly address the concerns that the government can’t or won’t.  The emerging idea that sustainability can be profitable removes the largest barrier for these organizations to act.

Perhaps if Mr. Friedman were still around, he may slightly update his statement—“the business of business is sustainable business.”