Doing your bit for the environment can be expensive and you always run the risk of being accused of greenwash. But, as Jenny Hulme finds, making your business more eco-friendly can also attract customers and generate cost savings.
Some 18 months ago the management team of the A Mclay printing works in Cardiff sat round a table and added the environment to its agenda. Like so many companies in Wales, and across the UK, it had long been using paper recycling bins at the back door, picked up by a waste recycling company. But when the bins got full the waste was just added to the general pile and sent to landfill. It was not an issue the management had ever taken really seriously – until this meeting.
Wales is rich in industries with a heavy carbon footprint, and, as Richard Kyte, manufacturing manager at Mclay says, people’s perception of printing is of a dirty industry, using a lot of chemicals and producing lots of waste paper, plastic and wood. “It is, though, only when you have a green audit and reassess your policy on waste that you realise how bad you are, and how huge the task to turn things round is,” says Kyte.
But in 18 months the company has turned around big time, cutting its paper waste by 21 per cent for starters.
Companies all over Wales are combining a real desire to bring about environmental change with a realisation that success relies on it. Across the world there has been an enormous shift in the way businesses, as well as governments and consumers, view the environment, and the need to protect it. And with good reason. There are huge economic risks if action is not taken.
But companies taking a lead on this say it gives them a competitive edge. When Marks & Spencer started charging for plastic bags, it made the headlines and analysts believed it would win them custom. The approach appears to have boosted its image, at least. The retailer was named the greenest FTSE 100 company in a survey of sustainability experts, political groups and journalists by Chatsworth, the communications agency.
Despite cynicism about so-called greenwash, or environmental posturing, the company managed to impress more than half of the opinion formers. Chatsworth’s Nick Murray-Leslie says it was down to a campaign that contained clear and achievable targets rather through publicity stunts.
“The general public is much more aware of the issue and the role big business has to play,” he says. “Supermarkets continue to come under particular scrutiny because of their prominence in our daily lives. The brands with the most well-publicised sustainability campaigns are also perceived as greenwashers, so the correlation between investment in publicity and a positive perception by the public does not always apply.”
If it is hard for the big companies to get it right, spare a thought for the small and medium-sized businesses, which account for 20 per cent of the UK’s overall emissions.
The targets set by the UK government – including a commitment to cut emissions by 60 per cent by 2050 – are hefty.
In Wales the issue is a hot political potato since the Assembly added its own target of a 3 per cent per year reduction in CO2 from 2011. That is something the Confederation of British Industry (CBI) in Wales, which represents companies employing about 50 per cent of the private sector workforce, has taken issue with, saying hundreds of millions of pounds have been invested by Welsh companies in cutting emissions. It argues that environmental policy has to be balanced with a responsibility towards ensuring people in Wales have a prosperous future.
Leighton Jenkins, assistant director of policy at CBI Wales, says that while the CBI is committed to pursuing the targets, he fears it may have a negative impact on employment and manufacturing in Wales as producers relocate to economies with less stringent environmental regulations.
But businesses of all sizes, and across all sectors, are facing up to the immediate challenge of meeting targets, and the realisation that this might save them money on energy bills, landfill costs and by selling their waste. They are, perhaps more shrewdly, hearing the demands of their clients and general consumers (one of the most influential drivers of change through their purchasing decisions) that they take the environment seriously. Research indicates 94 per cent of businesses plan to add carbon-friendly clauses in contract negotiations with suppliers.
“For us there is an immediate payback by saving paper in the right way – we get paid so much per tonne,” says Mclay’s Richard Kyte. “But, perhaps more importantly, we are seeing customers asking questions about our environmental policy. The emphasis has changed. They don’t just want to know about quality and cost any more. We know we have large contracts with blue-chip companies and when they come up for renewal they will want us to have ISO 14001 accreditation (the international standard for environmental management systems) before they put us on the tender list. So there is huge motivation for making change. We have just been accredited. We can also confirm that all the paper we use comes from sustainable and managed sources.”
But, as Kyte says, change doesn’t always come cheap or easy. While specialist company Severnside Recycling provided the equipment – colour-coded bins, cardboard compactors and the like – Mclay had to invest the time and money, employing a full-time environmental assistant and training the rest of the staff. “We have seen, though, that simple changes make a massive difference,” says Kyte. “We’ve cut landfill waste by 56 per cent, and while we don’t always know which contracts we’ve won because we have new environmental standards, it is part of a package we give our customers.”
“Companies are more aware of the role of the environmental policy, without a doubt,” says Mike Batts of the Carbon Trust, a company set up by the government seven years ago to work with businesses to reduce carbon emissions by offering advice and financial support. When it was launched, says Batts, it was initially about raising awareness of the costs and savings – to the environment and businesses. Too many companies were paying energy bills without thinking how they could be reduced, or replacing machinery with like-for-like models without seeking more efficient alternatives.
In the past three financial years, though, Batts says businesses they have worked with have saved £21m annually, taking 298,000 tonnes of CO2 out of the atmosphere each year.“We are not experts in individual business sectors, but we can match companies with the right experts to help them look at their carbon footprint, and the most cost-effective ways of saving energy, or investing in technology to cut emissions long term.”
One example is Yuasa Batteries, which makes sealed lead acid batteries and has a plant in Ebbw Vale. It worked with the Carbon Trust and managed to get a payback on its investment in less than six weeks. “It is saving £300,000 a year as a result and has reduced carbon emissions by 1,600 tonnes a year,” says Batts. “Putting the environment on the business agenda, and taking action, makes an impact on the environment, but saves businesses money and makes them more competitive,” adds Batts.
Other companies that have benefited from going green include RWE NPower’s Aberthaw Power Station, which installed advanced steam turbines, making it one of the most effective coal-fired stations in the UK. Steelmaker Corus, which runs the Port Talbot plant, announced it was investing £60m to install new technology to reduce CO2 emissions by reusing gas.
And Headland Foods, the UK’s leading manufacturer of frozen own-label ready meals from its sites in Flint and Grimsby, reported its energy management plan is saving approximately £157,000 and 1,483 tonnes of CO2 each year. Payback on its investment was less than one year.
Exopack Advanced Coatings, based in Wrexham, makes precision coated papers and films for the electronics, medical and optical technologies. Its investment in energy efficiency was paid back in six months and is saving the environment from 2,300 tonnes of CO2 each year.
In Tredegar, Penn Pharmaceuticals, which provides pharmaceutical outsourcing services to the healthcare industry, has funded an environmental research assistant, invested in energy efficiency equipment and increased recycling, and reports savings of about £124,000 since 2004. It has been invited to join the government’s Inside Welsh Industry (IWI) programme to share environmental strategies with businesses across Wales.
In Cardiff, Elinia, one of the UK’s fastest-growing managed service providers, is to offer a carbon-neutral hosting service after signing an agreement with the Equinix data centre in Slough. Power for the data centre is supplied by Slough Heat and Power Energy Centre, a converted coal-fired power station that generates hot water and electricity for local businesses by burning wood chips and fibre cubes made from used paper and cardboard.
Elinia is one of four companies to take space at the data centre to accommodate its managed services customer base, which includes The National Assembly for Wales and Global Aerospace. “Failure to curb emissions will soon be as damaging to a company’s reputation as losing their personal information is,” says James Carnie, technical architect of Elinia.