As mega-corporations like Walmart set stricter environmental requirements for their suppliers and vendors, the playing field for product-makers gets meaner.
It’s not enough anymore, it seems, to merely make goods that people want and that stores will stock. Soon, manufacturers will be goaded by popular demand into proving they’re doing so in an environmentally friendly way.
“These are not companies talking about something warm and fuzzy — this is the 21st century global economy,” says Paul Linzmeyer, chair of the sustainability committee of the New North.
Via its Sustainability 360 program initiated a few years ago, Walmart publicly committed to goals of cutting its carbon footprint, using renewable energy and recycling as much waste as it generates.
Since then, the company has been gradually upping the ante for its suppliers, urging them to cut — or at least measure and disclose — their carbon footprints, too.
Walmart’s “Sustainability Index,” launched in July 2009, promises to make its suppliers and vendors’ use of energy “more transparent” so that companies compete with each other on sustainability and energy efficiency.
Ready or not
So are Northeast Wisconsin manufacturers prepared to compete in this green economy?
It depends on whom you ask.
If you’re enterprise software maker IFS, which makes computerized systems that measure companies’ carbon footprints, the answer is a thunderous No.
A third-party survey for IFS found that only 3 percent of American companies had specific software in place that measures their carbon footprints and tallies up the resources their companies, employees and products use.
“Virtually no one has this equipment,” says Chuck Rathmann, analyst with IFS North America at its Brookfield office. IFS is based in Sweden.
Such software measures not just how much fuel it takes to run a company, but also how much energy if any it takes to distribute its products, operate its products during the products’ useful lifespan and dispose or recycle its products after they’re used.
But as demand for green manufacturing grows, Rathmann says so will demand for documentation of it.
While most large corporations use some form or another of enterprise software, not many midsized or small companies do, and even fewer have the added carbon footprint-tracking capacity. IFS’ sustainability-measuring programs mesh with its operations programs, making them easy and comparatively inexpensive for companies to implement, according to Rathmann.
“As we look at the current regulatory environment, we’re looking at the possibility that they will measure air pollution/carbon emission,” he says. “Suppliers are being mandated to reduce their own carbon footprint, and [IFS software] makes that piece [of the equation] more efficient to measure over the long run. But what we are finding is they [mid-sized companies] don’t have the technology.”
Rathmann says not being able to measure one’s carbon footprint could make a company less competitive with other companies that have such measuring ability.
So far, there’s been no universal standard to measure greenness, and what has been done has doing so has been pretty squishy.
“Are manufacturers prepared for this [green economy], and how can they track it?” says Rathmann. “There’s been a lot of greenwashing out there.”
Greenwashing — touting a product as environmentally friendly when it’s really not — by some unscrupulous or oblivious parties has given consumers reason to be suspicious of the terms ‘green’ or ‘sustainable.’
The Leadership in Energy and Environmental Design (LEED) certification program for builders and developers has attempted to measure sustainability using a series of certification levels (silver, gold, platinum, etc.). But many other industries are treading in uncharted territory.
Sustainability “is far from being a uniform assessment,” says Michael Klonsinski, executive director of the Wisconsin Manufacturers Extension Program. “And it’s not included yet in larger companies’ assessment metrics.”
“Even without cap-and-trade legislation for [carbon emissions] we are seeing retailers like Walmart begin to require that their vendors meet certain environmental criteria, and they have to document” their progress, says Rathmann.