MCBC Steps Out

to the

Greening the Supply Chain Conference

 

Mike Violette, Washington Labs

Communications Committee, MCBC

 

June 3, 2008

 

LINTHICUM, MD Green was the color of the day at the BWI Marriott hotel this past Tuesday and your humble MCBC servants were there to soak it up. The focus of the conference was on achieving a balance between environmental stewardship and profitability. Seems that, done correctly, doing the right thing can also be good for the bottom line. Testifying to this message were representatives from Steelcase, GM, Goodwill, Baxter International and Johnson Controls.

 

The conference, organized by the Regional Manufacturing Institute, the US EPA Green Suppliers Network and the Maryland-Asia Environmental Partnership, was by all accounts, a success. It featured not only content, but perspective and direct case studies. It’s nice to get a positive message about the environment these days.

 

 

 

Over 200 folks from a cross-section of Maryland (and her environs) got together to learn and discuss. Our own “Evergreen” Andy Dubosky, President of the MCBC checked out the goings-on and met up with the World Bank’s Will Center and Department of Commerce’s Bill Burwell.

 

 

Will Center, Bill Burwell, Our Fearless Leader

 

The room was SRO as the Honorable Senator Ben Cardin gave the opening remarks, framing the day’s conversation with the need for US industries to be a model for the world and the need to be successful for the coming generation(s). On whole, it was inspiring to know that work IS being done on the problem and successes ARE being achieved. So much of the news is bad (well, why else would Fox News be in business?) that it is refreshing to attend a conference where there is progress on innovation fronts to deal with the issue, rather than just listen to pundits as they wring their manicured hands.

 

Senator Ben Cardin

 

Granted, this is a thick and complex issue, with lots of devils in the details and emotion in the debate. The rational approach is to work these issues on an incremental basis, considering the complexity of the whole supply chain-energy use-policy-economic-social factors and selecting a balance and making forward progress. Predicting the outcome is more difficult than selecting March Madness’ Final Four, but all the elements are there, it’s getting the combination correct.

 

Congressman John Sarbanes, of Maryland’s Third District, weighed in with his support of the green initiatives both locally and in the halls of the US Congress, where they “live, eat and breath green”—maybe not as tasty as a steak at Ruth’s Chris, but certainly in keeping with the times.

 

Congressman John Sarbanes

 

The politicos thus exhibited and exercised, the conference proceeded to the business of the matter: what good is green and who should get it? Well, from this observer’s point-of-view, there are many layers to the onion.

 

Tom Murray, representing the EPA Green Suppliers Network chaired the morning session and moderated the panel’s post-presentation questions. Here he is, during a break, with Bryan Lopp, Peter Gourlay and Dave Feldman.

 

 

World Bank’s Bryan Lopp, MD-AEP’s Peter Gourlay,

EPA’s Tom Murray and Livability Project’s Dave Feldman

 

 

Mike Galiazzo, President of the Regional Manufacturing Institute and conference organizer stated that Maryland can be the global leader and addressing the issues can reduce costs and create products that are good for the Earth. You go, Dr. Mike.

 

 

RMI’s Mike Galiazzo

 

The RMI board was well-represented at the conference with Mr. Fred Whiton from Northrop-Grumman joining Mike at the coffee break with ideas for pushing the green ideas farther into the consumer chain. Let’s get some of this stuff onto the shelves of Home Depot and Lowe’s.

 

 

RMI’s Mike Galiazzo and Northrop-Grumman’s Fred Whiton

 

When Johnson Controls’ David Love says that their new facility in Glendale WI will garner the LEED (Leadership in Energy and Environmental Design) certification, which will include wind power, geothermal heating & cooling, solar power and a host of other energy-saving designs, you know that they are committed to the mission.

 

An over-arching theme is the focus in Corporate America on the TRIPLE BOTTOM LINE, a balance of:

 

• Economic Prosperity (Profit$)
• Environmental Stewardship
• Social Responsibility

 

Johnson Controls commitment is to a 30% Greenhouse Gas (GHG) intensity reduction from 2002 to 2012 in the US, a baseline that is confirmed by EPA Climate Leaders. Accoding to the EPA’s website: The United States is committed to reducing the greenhouse gas intensity of the American economy by 18 percent over the 10-year period from 2002 to 2012.

 

Thus, the reduction in GHG is tied to GDP; if GDP rises (as it does) then the net GHG output on the planet increases. Mother Earth doesn’t de-rate things based on GDP, so while there may be positive “reduction” in GHG, the millions of tons of carbon we ‘exhale’ in various ways may still make her wheeze; the trick is to reduce the trend. Johnson Controls’ target of 30% outpaces the US Government’s objectives, which is laudable. The real effect will come when the technologies become available and attitudes shift in the populace as a whole. Making more money while doing this is a goal everyone can sink their teeth, and balance sheets, into.

 

 

 

Johnson Controls’ David Love

 

 

Not only that, but according to Tom Gallagher, Plant Manager at GM Powertrain in Baltimore, MD “CEOs and boards have discovered sustainability as a top line opportunity to enhance brand names.”  In addition Mr. Gallagher pointed to the trends that show that suppliers are increasingly de-selected by buyers when they fail to meet sustainability objectives. At the present time, sixty percent of buyers consider sustainability as a component of their decision process when selecting suppliers, with that number growing over time (from a mere 17% in 2001).

 

 

The holistic sentiment embodied in the Triple Bottom Line was echoed by Mary Ellen Mika of Steelcase, the venerable furniture company whose commitment to the process includes helping suppliers gain certification to the Environmental Protection Agencies’ Green Suppliers Network, which is a public-private partnership that provides assessments and review of processes to make the production of products and services the color of Kermit. Such a certification looks at the company’s production and operations to help reduce use of hazardous materials in vendor supplies that are integrated into Steelcase’s products. For example, an objective is to get the PVC out. PVC is an excellent insulator and is used in lots of wiring; switching to non-PVC insulation in the Supply Chain provides a necessary first-step.

 

 

Steelcase’s Mary Ellen Mika

 

McDonough Braungart Design Chemistry (MBDC) has instituted the concept of Cradle-to-Cradle certification. According to sources, this certification includes “environmental and human health evaluation, material reutilization, energy use, water quality, and social responsibility.” (AIA Committee on the Environment). This certification reaches more than just product lines and includes buildings, facilities, systems and processes. Ms. Mika provided a case study discussing Steelcase’s first CtoC Certification on a Workstation: hence the need to push the green requirements upstream, which is not trivial because it requires understanding all the chemistry in the vendors’ supplier network.

 

Tightly bound in this process are assessment from the EPA’s Green Suppliers Network. The costs for this are roughly $7000, which is not too bad (from someone whose operations routinely get assessed for QA purposes). One can imagine the day when ISO9000 requirements call out these environmental impacts and consequences on a routine basis.

 

 

John Bradburn and Suzanne Fredericks provided a one-two overview of a unique partnership. Mr. Bradburn is with General Motors’ Global Environmental Programs; Ms. Fredericks is Business Innovation and Development Analyst with Goodwill Industries. The partnership between GM and Goodwill is based on a mutually-beneficial model. Goodwill, better known for re-use and social services programs, has expanded its operations into recycling.

 

 

 

GM’s John Bradburn

 

 

GM’s support and cooperation has broadened that set of services by partnering with Goodwill Industries “to provide a battery recharge/reliability verification service to ensure that all new vehicles leave the factory with a fully charged, reliable battery.  This program has been in place for more than 20 years.  Goodwill Industries provides services to many southeast Michigan assembly facilities.  They receive the batteries from facilities, recharge and check them, and return them for reuse.  Batteries that can no longer be reused are reclaimed in an environmentally sound manner.”

 

 

Goodwill’s Suzanne Fredericks

 

 

Monical Torres, representing Baxter International (an $11B health care company) told the assembly that their concerns include the prospect that stakeholders may hold Baxter accountable for social and environmental performance. Because of the exposure that Baxter has as a health care services provider, the risks are mitigated by ensuring that suppliers sign up for reasonable sustainability policies and procedures. Lean and Clean are the buzzwords that mean creating green products and reduce the use of resources. Face it, we’ve been fat, dumb and happy for years because of the seemingly inexhaustible bounty and our fortune to have the diverse geography, geology and topography of North America: becoming even just a little more conscious of our stewardship and responsibilities is just another opportunity for excellence.

 

 

Alright enough soapbox and a perfect opportunity to summarize Mr. Anirban Basu of the Sage Policy Group who gave an overview of Maryland’s position as a “Green” State. There is much to be celebrated, as Maryland is fifth in the nation in “green-ness”, according to Forbes Magazine. Of course, becoming first may not be realizable as Vermont dominates in that position, according to Mr. Basu. Now, personally, I LoVermont, the Green Mountain State, and its industry, a mix of recreation and agriculture affords it a dominant position on the green list. From the top of Killington or Okemo, the unspoilt wilderness seems to stretch forever. One can’t imagine a belching factory town amidst the treed mountains and bucolic valleys, Add with that the famous Yankee “leave me the hell alone” attitude and it’s likely to be greenest for a long time.

 

So at the margins, in many comparisons, comparing green-ness between states is like asking what weighs more: a half a pound of lead or a half a pound of feathers?

 

Maryland is green for a variety of reasons, as pointed out by Mr. Basu: her high-tech employment base is relatively non-polluting, the industrial segment of the state has, exceptions noted, shrunk and hence the economy is based on non-production-line workers in the IT, Biotech, Academic, Trade, Government and service-sector economies.

 

The real issue is whether the orientation of the leadership, the implementation of green policies and sustainability is being integrated into the culture. Mr. Basu states that there needs to concrete goals, broad and bold objectives, such as we should be creating the energy that the OPEC and Others will be wanting to buy from us in twenty years. Well, ya gotta start somewhere.

 

 

Sage Policy Group’s Anirban Basu

 

The session was capped and closed by Mr. Peter Gourlay, President of the Maryland-Asia Environmental Partnership. MD-AEP’s mission is to mobilize Maryland’s silos of expertise and lessons learned to help address Asia’s massive needs for water, energy and pollution prevention. Mr. Gourlay discussed the importance of engaging stakeholders in a global network that will spark change and facilitate the development of sustainable activities. The pressures for corporations to become more sustainable, as noted by Mr. Gourlay, include factors such as Company Reputation, Consumer Attitudes, Investor Concerns, Employee Pride and information from multi-lateral forums, regulators and the media. A concerted approach would be to formulate your company policies with sensitivities to these factors, forming it into a basis for corporate culture.

 

MD-AEP’s mission is to “connect the dots” between Maryland business, government and academia to provide Asian decision makers with holistic solutions to their massive environmental problems.  The MD-AEP demonstrated its own sustainability commitment in the Philippines for Earth Day by mobilizing Maryland well wisher to support the preservation a key watershed area affecting future water supply for San Pablo City.  Mr. Gourlay’s major concerns are clean water, clean air, medical waste management and greening the supply chain.  His near-term plan is packing his bags to head to Singapore at the invitation of the Singapore Public Utilities Board.  MD-AEP has been selected as one of ten international groups to be an “International Supporting Organization” of their global water summit.  MD-AEP is laying the groundwork for an Asia Water Management Forum in Annapolis this fall.

 

 

MD-AEP’s Peter Gourlay

 

In the end, according to Mr. Gourlay, it is a “Global Competition for Green Leadership.” And I ask: when does the Maryland, or the US, shirk from a good fight?

 

Mike Violette

mikev@wll.com