Sustainability is very much a headline in B2C. But we don't hear much on the subject in B2B. Is it happening? What are the motivators for B2B businesses going green? And what are the consequences of 'wait and see'?
This article is the second in a three part series exploring B2B sustainability issues, culminating in a webinar Tuesday, February 8, 1pm EST (10am PST). To add the webinar to your Outlook calendar, click here.
Sometimes, a clever opener is the best way to draw readers. And other times, well, you just let the facts speak for themselves:
• Mail sorters at the main US Post Office in Reno, Nevada became the most productive and error-free in the western US after a 'green' energy and lighting upgrade in their building. The $300,000 upgrade produced $50,000 in yearly energy and maintenance savings...and a whopping $400,000 annual productivity gain from employees.
• VeriFone, a subsidiary of Hewlett-Packard that makes electronic swipe readers to verify credit cards, renovated their building, beating California's strict Title 24 building code by 60 percent with a 7.5-year payback. More astonishing, however, was the five percent increase in employee productivity and 45 percent drop in absenteeism after the overhaul. These benefits brought payback to under a year, for a return on investment of more than 100 percent.
• The Superior Die Set Corporation of Oak Creek, Wisconsin upgraded lighting for $3,000, providing annual energy and maintenance savings of $1,750 - a payback of 20 months. But reduced reflections allowed drafters to cut turn-around time for drawings by more than 11.3 percent, worth $37,500 a year, reducing the payback to under one month.
These cases have two things in common. First, each company greened their operations to raise operational efficiency and comply with legislation. And second, each company was taken by surprise when a side benefit - happy employees - seemed to produce unexpected returns.
The Best Employees Want Green
A recent poll on MonsterTRAK.com found that 80% of young professionals are interested in securing a job that has positive impact on the environment, and 92% would be more inclined to work for a company that is environmentally friendly.
How do they find those jobs? One way is through the Environmental Defense Fund's unique Climate Corps. EDF Climate Corps places specially-trained students from leading business schools in companies to develop energy efficiency plans. One glance at Climate Corps' website reveals the top caliber talent attracted to the program - and the incredible benefits to partner companies.
But are employees picking green companies in meaningful numbers? Anecdotal evidence would suggest so. On a recent visit to Patagonia HQ in Ventura, CA I learned that for each job opening posted, the company receives thousands of qualified applicants. It's no surprise the company defied the recession, and continues to grow at a healthy pace.
Attracting talent is only part of the equation. Andy Mercy is CEO of Angelpoints, a company that helps clients build more effective corporate social responsibility (CSR) programs.
In a recent conversation, Mercy said employee CSR programs create benefits far beyond lessening the company's ecological footprint. In one of the companies serviced by Angelpoints:
• Galvanizing employees around CSR produced one of the most positive aspects of job satisfaction 75% of the time;
• 49% of employees reported they learned valuable new job skills through the CSR activities;
• 64% of the CSR activities resulted in new business leads, when employees were teamed with clients or suppliers in joint programs.
Creating a happier, healthier workplace seems an obvious way to boost productivity and attract the best workers. Sadly, this fact is lost on the majority of B2B CEO's.
What Are You Missing?
Ian Sugarbroad, former CEO of LGC Wireless, built his B2B company in the hypercompetitive environment of Silicon Valley. In a phone conversation, Sugarbroad credited his corporate green programs with maintaining a stable, highly motivated workforce. And he can't believe green hasn't become par for the course among B2B CEO's.
"It definitely hasn't become standard procedure in Silicon Valley. I believe only 30% of CEO's think about CSR. 20% just go with the flow, adopting the same green behavior as their competitors. And 50% don't get it at all - they think building a great company is still as simple as building a great product."
Fact is, an alarmingly high number of B2B companies aren't up to speed on green issues that could seriously impact their business. According to Scott Wilson of IHS, a recent study conducted jointly with Supply & Demand Chain Executive Magazine revealed that 45% of B2B's were unaware of 'conflict mineral' legislation enacted in July 2010 - legislation that could cripple the electronics industry.
How does your company stack up? Are you at risk of losing employees, as well as being penalized by legislation or customers greening their supply chain?
Learn. Adapt. And Communicate.
There are three major lessons to be learned.
First, stay informed. This is easier said than done, as information flow has become a torrent. But it's vital that someone in your company tracks both customer trends and legislation.
Second, use the information to adapt to your environment. This adaptation needs to be strategic - choose your areas of green focus with an eye on the white space you could claim.
And finally, communicate and engage your employees. Ensure they know what you're doing in green. Even better, engage them to shape the green course of your company.