Whether through heightened consumer demand, shareholder interest or the billions of tax dollars being poured into the fight against climate change, it’s evident that the time is now for companies to implement better practices and deliver more sustainable products.
Of course, many companies are already doing this. Some are even realizing substantial returns on sustainability investment (ROSI™, as coined by the NYU Stern Center for Sustainable Business) and relying on those efforts as lucrative business strategies moving forward.
A recent example is Rothy’s, which has taken the infamously high pollutant footwear industry by storm through its circular approach to manufacturing. Since 2012, the sustainable footwear brand has turned over 125 million single-use plastic bottles into comfy, washable and luxurious shoes. Now valued at $1 billion, Rothy’s is planning to expand its vertically-integrated operations into Brazil and several Asian and European markets.
Rothy’s shoe-making model may not fit every company, though. After all, building a profitable business around sustainability is different from making an already profitable business sustainable. This is one reason why industrial manufacturers, whose activities account for nearly 25% of all greenhouse gas emissions in the US, are still struggling to identify and adopt sustainable practices without hindering growth and facing significant up-front costs.
We believe a manufacturer’s next expansion decision is a prime opportunity to grow sustainably and can be handled in a way that positively impacts both their carbon footprint and bottom line. There are a wide variety of industrial activities that cause greenhouse gas emissions, and many opportunities to reduce them. The following offers an outline of a few actionable opportunities that manufacturers can pursue during the site selection phase and beyond to reduce greenhouse gas emissions at their current or next facility.
Energy Efficient Upgrades
Industrial facilities use large amounts of energy for cooling, heating, lighting and other functions. Manufacturers can reduce emissions by upgrading to more efficient industrial systems that accomplish the same functions but use less energy. Techniques to improve building energy efficiency include better insulation, more energy-efficient HVAC and refrigeration systems, efficient fluorescent lighting, passive heating and lighting techniques, and the purchase of energy-efficient electronic controls. The EPA’s Energy Star program also allows companies to identify ways of using less energy to light and heat/cool production facilities or run the equipment.
Fuel Switching
Likewise, emissions can be reduced by switching to and/or augmenting coal-based sources of energy with fuels resulting in less CO2 emissions, such as natural gas or renewable energy sources.
Green Building Products
Incorporating green products with a lower carbon emission footprint into new facilities and retrofits can significantly help in reducing a company’s carbon footprint and allow them greater ability to meet ESG targets. Subsequently, it’s important for manufacturers to consider what products they use during this process via their choice of general contractor and subcontractors. The sourcing, transportation and implementation of building products, such as steel, cement, concrete, plastics and lumber, are not only highly pollutant processes but are also increasingly expensive. Fortunately, there are more green building products on the market than before. Certain general contractors can work with you to incorporate these preferences and ESG strategies into your next build while balancing cost considerations.
Feedstock Procurement
Utilizing recycled raw materials is a popular way for manufacturers to weave sustainable solutions into their manufacturing processes. Fortunately, sustainable feedstock options, such as closed-loop chemicals, are growing exponentially and have applications in nearly every industry.
Many companies are also thinking critically and creatively about what happens to their products are they are used and discarded. Companies like HP, for example, are solving the last piece of their value chain puzzle by shredding used ink cartridges, refining the plastic, and feeding them back into the production loop to make more cartridges. The company told Marketplace its sustainability efforts have added $3.5 billion in new sales, giving promise to HP’s commitment to derive 75% of its raw materials from sustainable, closed-loop sources by 2030.
Logistics & Supply Chain Management
Now more than ever companies want to optimize and localize their supply chains at their next manufacturing operation. Factors such as drive times, routes, accessibility to suppliers and freight forwarding options are unsurprisingly critical to this evaluation. These factors, and the subsequent costs that they are tied to, can also be used to better understand the company’s expected carbon footprint at a chosen location.
Training and Awareness
Lastly, manufacturers must train and equip employees to abide by strict internal policies and procedures to reduce and prevent accidental emission leaks from containers and production equipment.
Whether it’s in response to stakeholder demands or regulatory mandates, manufacturers can no longer define sustainability as purely aspirational goals. To make essential progress, they must commit to well-defined actions.
Our team at Parker Poe Consulting would love to talk with you about how we help companies identify the best and most cost-effective locations to expand their business while considering the factors most important to them - including sustainability. Please visit our website to learn more about our site selection and incentives services or reach out to the author of this article, Mark Simmons, at mark@parkerpoeconsulting.com.
Parker Poe Consulting is a site selection and economic incentives consulting firm. Our team provides data-driven solutions for clients who are expanding their footprints and considering new capital investments and job creation across the United States. From global conglomerates to family-owned businesses, Parker Poe Consulting positions companies to make informed location decisions that will maximize operational effectiveness while reducing costs.
We have worked with hundreds of clients to offer results related to new facilities and facility expansions. Whether a company is contemplating a new location, considering investment at an existing operation, or entering the market through a new partner or sales subsidiary, Parker Poe Consulting ensures that clients find the optimal location to successfully grow their business. We are also a wholly owned subsidiary of one of the largest law firms in the Southeastern United States, Parker Poe.