No upfront investment was needed for the accounting firm’s paper reduction program; yet for the project to be successful, the business needed someone embedded in the company to shepherd employees through the change process. The project manager worked with their green team to roll out one paper reduction strategy at a time. She tried to keep communications about the project interesting and fun.
There are opportunities to reduce material inputs, energy use, water use, and waste streams in small businesses across the country. Many government and utility programs reach out to these businesses to encourage them to reduce energy, water and waste. The success of these programs relies on finding someone within each business to manage these sustainability efficiency projects.
We could create hundreds of good middle class jobs in California, help address climate change, and cut small businesses’ operational expenses with one relatively simple new program. I would like to see a revolving loan fund set up to help each small business in California that meets certain criteria hire a sustainability manager.
Small businesses are so busy trying to keep the doors open that often they don’t have time to explore operational efficiency. We need them to be more efficient. Not just a little, a lot more. The hope of a stable future climate rests in part on all businesses doing more with less. Zero net energy, zero net water and zero waste are all goals we know how to achieve with proven solutions. We just need someone to work on these projects at every organization.
Picture one person splitting her/his time among two small businesses in the same city for two years. Think of how many energy efficiency, water conservation, waste prevention, alternative commuting, and environmentally preferable purchasing projects s/he could complete in two years.
A state revolving loan fund could pay for their labor. Half of the savings realized from the zero net projects would go back into the revolving loan fund to fund additional sustainability managers. Businesses would keep half of the savings.
Choosing the small businesses
Only some small businesses would qualify. They would need to meet certain thresholds.
I’ve developed the conceptual framework for an algorithm to determine which small businesses would benefit from having a half-time sustainability manager for two years. After all, there would need to be enough potential savings to justify the program’s labor expense.
Number of employees
The U.S. Small Business Administration generally defines a small business as having fewer than 500 employees. According to U.S. Census data, in California there are 65,362 businesses with 20 – 99 employees and 13,168 businesses with 100-499 employees. This algorithm focuses on incorporated small businesses with 25 to 500 employees.
While most efficiency opportunities will be at businesses with between 50 and 500 employees, if companies with 25 to 49 employees have extremely high quantities of material inputs, energy use, water use and waste outputs, they could be included in the program. I have interviewed a 40 employee farm that generates 2,000 tons of green waste per year, a 35 employee printing company with large material throughputs and a 40 employee construction firm that was pursuing LEED green building certification.
Annual revenues per employee
While conducting research on the conditions that support successful sustainability managers at small businesses, I found that over half of the 50 businesses I interviewed had revenues over $100,000 per employee. Industries represented by these companies with high revenue streams included manufacturing, construction, retail, hospitality, law, accounting and consulting. Their large annual revenues per employee provides them with the cash flow to invest in sustainability projects that offer an attractive return on investment.
Annual energy costs
When facility managers consider which sustainability projects to implement, energy conservation and energy efficiency projects usually rise to the top of the list. This is primarily because energy line item costs are so high compared to the cost of materials, waste disposal and water.
Annual water costs
While water costs are a much smaller portion of a facility manager’s budget, they are rising quickly. California continues to struggle with a third year of severe drought and many business sectors are looking for ways to cut water use partly because it’s the right thing to do for the good of all. If a business uses large volumes of water they should be included in this project.
Annual feedstock costs
Manufacturers, construction companies and other businesses with large material throughputs often have opportunities to create more output with fewer material inputs. One candy bar manufacturer for which I did a waste reduction site assessment spent $24,000 on waste disposal and considered that a cost of doing business. Half of the waste in their dumpster was waste candy bars. Reducing their waste stream by half was not interesting to the General Manager until I calculated that they were spending $300,000 on the ingredients that were going into the waste candy bars that were then thrown away. Coincidentally, $300,000 was the cost of a new ultrasonic cutting blade for the manufacturing process which meant a one year return on investment for a piece of equipment that would cut their feedstock costs and their waste dramatically.
Annual cost of solid waste disposal
Many businesses I have worked with have reduced their garbage bills by $10,000s per year by expanding their recycling and waste diversion programs. This is another project that needs someone within the business to set up the new system and educate staff.
Reduced recruiting and training costs
When businesses invest in their employees’ wellness, employee turnover falls, and businesses save money on recruitment and new employee training. One brewery/restaurant I interviewed had high employee turnover. After implementing an employee bicycle purchase program where the company paid half the cost of a new bicycle after six months if that employee agreed to ride it to and from work for 44 trips, their employee turnover rate fell dramatically. In general, employees want to work at companies where they feel management cares about their well-being.
Companies are constantly looking for any advantage over their competition. One small manufacturing company I interviewed made bathroom paper towels and toilet tissue. After their sustainability manager presented her new sustainability plan to the company, 50 sales reps sent emails asking for a copy of the slide deck. They wanted to present the plan to their customers to boost sales. Many of their customers or potential customers were large hotels and institutions looking to green their supply chain.
Connect these variables and you have the algorithm that guides whether a small business should pursue hiring a sustainability manager through this program.
* If there are 25 < x 500 employees
* If the business has > $100,000 of annual revenues/employee
* If annual salary and benefits for a half-time sustainability manager = $ net energy savings + $ net water savings + $ net material input savings + $ solid waste disposal savings + avoided cost of recruitment and training + increased sales
If properly funded, this project will creatively disrupt the inertia of business as usual. I understand this inertia given how strapped for resources many small business are. Given that small businesses are the backbone of the U.S. economy, we as a nation should be doing more to support them.
Small businesses spend money locally. They pay taxes that support our schools, roads, police and fire departments. They give donations of time and money in their communities, and they are the first ones to hire after each recession.
This sustainability project manager program will help stem the trend of middle class jobs being exported to other countries by making our small businesses more competitive and resource efficient. The question I have is who is in the best position to fund a program that trains thousands of sustainability managers, matches them with small businesses and measures their success.