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Emphasis on the environment grows, yielding big benefits

Rochester Business Journal
April 13, 2012

Kermit the Frog famously sings, "It's not that easy being green." Yet, being green increasingly has become a go-to strategy for companies looking to be more efficient and cost-effective.
 
A study released by the Massachusetts Institute of Technology in January found that two-thirds of companies have made sustainability a permanent focus of companywide strategy, up from 55 percent the year before.
 
The survey, done in partnership with global business strategy adviser Boston Consulting Group, included more than 2,800 companies around the world in a variety of industries. A third of those companies said that increased sustainability has led to an increase in profits.
 
Anahita Williamson, director of the New York State Pollution Prevention Institute at Rochester Institute of Technology, says several factors have contributed to a greater emphasis on sustainability.
 
"Some of the large companies, such as Wal-Mart, PepsiCo and Procter & Gamble, are really taking the initiative, which has driven supply chains and smaller companies to meet those demands," Williamson says.
 
Incentives offered by organizations like the New York State Energy Research and Development Authority encourage companies to make environmental changes, she says, and consumers are becoming more aware.
 
Among the specific kinds of sustainability efforts listed by companies in the MIT study were reductions in energy use and emissions, waste reduction, greater recycling of materials and more efficient use of water and natural resources.
 
In 2008, Gates Automotive Center made a $4 million commitment to sustainability. The company opened a second location in Henrietta by renovating a 40-year-old building.
 
Jim Fonzi, founder and president of Gates Automotive Center, says the new location has a number of eco-friendly components, such as a heating system that heats the walls and floors, helping to keep heat inside when doors are opened. The new location also uses T8 fluorescent lighting that reduces energy consumption by 80 percent and a water-based paint process that reduces the amount of energy it takes to coat a car by 40 percent.
 
Two years ago Gates Automotive Center purchased a hybrid tow truck. Fonzi says the truck cost some $40,000 more than a traditional truck but was worth it, considering the truck's hybrid technology lowers carbon emissions as well as fuel consumption by 30 percent.
 
Fonzi says the extra cost of the more environmentally friendly equipment has been more than offset by an increase in productivity of 30 percent to 40 percent and an overall reduction in energy consumption of nearly 80 percent.
 
The sustainability efforts also have proved to be a valuable marketing tool. Gates Automotive Center even has a sustainability section on its website detailing its eco-friendly upgrades.
 
Fonzi says the company now has made 90 percent of the same changes to the Gates Automotive Center's original location. He expects the company to reach 100 percent by the end of the year.
 
"I think an increased emphasis on sustainability just makes sense going forward," Fonzi says. "It makes financial sense and good sense to protect your investment in your company. It makes good sense to protect your employees. There are all kinds of little wins along the way."
 
While sustainability has helped the operations of some companies, it has changed the business model of others.
 
Rochester's Maven Technologies LLC was founded in 1998 as a buyer and seller of refurbished information technology and computer equipment, from high-end servers to personal computers.
 
Maven Technologies used that business model for seven years. Then, in 2005, the company evolved into a business that would make its money from being green.
 
"Trying to dispose of all the products you couldn't properly refurbish for resale was a very costly thing," says Todd Wheaton, president of Maven Technologies. "When you're talking about sustainability and the reuses of certain types of metals in computer and IT equipment, it's definitely better to reuse it than landfill it."
 
In the process of looking for a company that could process computer parts for their precious metal and plastics, Maven Technologies became that company.
 
Maven Technologies now is a player in electronics recycling, with clients ranging from major corporations and hospitals to colleges and government agencies. Last year, the company became the first Certified Electronics Recycler in New York and the 11th in the U.S.
 
Since making the change, Maven has grown from 11 employees in 2005 to approximately 40. Ken Johnson, vice president of operations, says the change in business model has been driven by a heightened awareness of computer security post-9/11.
 
"The people we were providing services for at that time were starting to become more educated on the concerns with electronic recycling," Johnson says. "That helped drive the evolution of the businesses."
 
Education on both the security and environmental benefits of computer recycling remains a major focus for Maven Technologies. The company routinely holds community recycling events and recently partnered with RIT in establishing a new, annual Sustainability Award that will be given to students who make positive contributions on environmental, health and safety issues in Rochester.
 
The thinking of companies like Maven Technologies and Gates Automotive Center is in line with the study done at MIT. The report found that most companies surveyed considered sustainability "necessary to be competitive."
 
For some, however, the return on investment in being green is not always so one-sided. Local company EvenOdd Creative uses recycled materials to create a variety of fashion accessories, including handbags. EvenOdd co-founder Ashley Cellura says running an environmentally friendly small business has both benefits and struggles.
 
"Although the cost of the actual raw material may be low, there are many hidden costs that arise for us," Cellura says. "We cannot conveniently purchase our materials like many companies can. We continuously have to make connections and partnerships with companies and organizations that have the same agenda as us.
 
"And once we have the raw material, such as retired bike inner tubes, they have to go through a process of preparation before they can even be ready for how we would like to use them."
 
Still, Cellura says a benefit has been the ability to attract a growing audience of customers who appreciate EvenOdd's focus on the environment.
 
"It does attract a niche, loyal crowd that care about our environment and want to support others who care as well," she says.
 
Williamson says roughly half of the work at the New York State Pollution Prevention Institute involves helping midsize and small businesses, which have fewer resources than major corporations, find opportunities to make small changes that can benefit them both financially and environmentally in the short term.
 
She says much of it comes down to a shift in thinking.
 
"I think there's a perception that going green costs more," Williamson says. "In reality there are a lot of simple back practices that one can do to make a difference. A lot of times we look at the waste at the end of the stream and wonder how we get rid of it, when there are several changes that could have been made further upstream to prevent it from happening."
 
She expects the emphasis on sustainability by companies to continue to grow, something the MIT study also suggests. Nearly 70 percent of companies surveyed plan to increase their investment in or management of sustainability in 2012, while only 2 percent said they plan to make cutbacks in that area.

4/13/12 (c) 2012 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email service@rbj.net.


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