Endangered Earth Update U.S. Agenda Businesses Scrub That Smokestack

By MICHAEL D. LEMONICK

For far too long, many U.S. companies have looked upon the ecology movement as bad for business. Putting scrubbers on smokestacks is expensive, they lament, and drafting all those environmental-impact statements can consume an enormous amount of time and resources. But while cleanup efforts cost money in the short run, they can eventually pay hefty dividends. As more and more firms are discovering, many environmentally sound practices can build up goodwill, win customers and produce a healthier bottom line.

Among the most important steps that any company can take is to launch an all-out campaign to conserve energy. Such a drive can cut fuel bills sharply and at the same time reduce the pollution that contributes to smog, acid rain and the greenhouse effect. Most companies may think they use energy wisely, but few have invested in the most energy-efficient equipment and lighting systems. Contends Amory Lovins, director of research at the Colorado-based Rocky Mountain Institute: "The technology exists today to save 75% of the electricity and 80% of the oil used in the U.S. without lowering our standard of living at all." Several electric utilities are leading the way in making companies more conservation-conscious. Southern California Edison runs 50 different energy-management programs, which helped hold the growth in demand for the utility's electricity to 2.1% over the past decade, in contrast to 4.1% from 1970 to 1980.

Along with curbing energy use, companies can take a hard look at the amount of waste they generate. Increasingly stringent environmental regulations have made it ever more expensive to clean up smokestacks and reduce releases of toxic chemicals. Thus, limiting factory waste can save money while it helps preserve the surrounding environment. Since 1975, the 3M company has cut its waste discharges in half by redesigning equipment, streamlining manufacturing processes and selling or reusing materials that used to be discarded. By not having to deal with that waste, 3M has so far saved $300 million.

Companies can also reduce costs by cutting back on elaborate packaging for their products. Paper, glass, metal and plastic packaging constitute 50% of U.S. garbage by volume and 30% by weight. To help shrink the mountains of wasted material, manufacturers should concentrate on using recyclable packaging. Procter & Gamble is test-marketing the use of recycled plastics in detergent and fabric-softener bottles. The firm says 70% of its packaging is made from recycled paper. Also, grocers could market more foods in bulk, requiring customers to supply their own reusable containers.

Whatever actions a company takes to help the environment should apply to foreign operations as well as those in the U.S. In too many cases, corporations have complied with antipollution measures at home but ignored them abroad, especially in Third World countries that are too desperate for foreign investment to complain.

Companies that refuse to clean up their acts could be forced to do so, either by increased government regulation or public pressure. In September an alliance of environmental groups, bankers and investment-fund managers, known as the Coalition for Environmentally Responsible Economies, unveiled a set of guidelines for corporate conduct called the Valdez Principles (a name taken from the Exxon Valdez, the tanker responsible for the Alaskan oil spill). Firms that agree to the guidelines must pledge, among other things, to conserve energy, reduce waste and market environmentally safe products.

Coalition members plan to monitor which companies abide by the Valdez Principles and to publicize the findings. In that way, environmentally conscious citizens would be able to decide which firms are best to buy products from, invest in and work for. If this strategy succeeds, companies will find that protecting the environment will be the best way to protect profits.