How an Eco-Industrial Approach Will Result in Better Economic Performance for Facilities and Improve the Environment

If the words “green business” make you start to glaze over, it’s not surprising. The term green has been overused so much in the past few years, that it has become almost as meaningless as “new and improved.” But there is a new trend emerging from the industrial business sector, and it’s about more than just switching your facilities to energy efficient light bulbs and recycling office paper. It is about improving your bottom line through a collaborative sustainable development concept also known as an ecoindustrial approach.

The term “eco-industrial” is yet to be found in the dictionary, but a quick online search will show that it’s a concept taking root across North America. An eco-industrial approach finds business efficiencies and monetary savings by encouraging companies and managers to look outside the four walls of their facilities. It requires a network of businesses cooperating to share resources, increase economic productivity and decrease environmental impact. In this context, eco stands for ecology, but also for economics— meaning that each business decision hinges on obtaining profitability from both perspectives. It goes beyond the simple concept of a single green building and looks at the bigger picture of how different systems interact.

What is an EIP?

An eco-industrial park (EIP) is a specific industrial or business area that is designed using an eco-industrial approach. An EIP is often developed from the ground up, such as the TaigaNova EIP in Fort McMurray, Alberta, Canada. TaigaNova was built with special zoning and design guidelines to encourage green building and allow more flexibility for businesses. Lot setbacks have been reduced so buildings can, for example, be oriented toward the sun, maximizing solar energy and saving on heating costs. Guidelines such as landscaping with “hardy, drought-tolerant, perennial species,” provide an opportunity for businesses to work together to save on bulk landscaping and design costs. Abundant green space allows for wildlife habitat and employee recreation, which has been shown to be directly linked to employee satisfaction and retention. Alternatively, EIPs can be created in existing industrial areas. At nearly 30,000 acres (12,000 hectare), the Pearson Eco-Business Zone will be the largest eco-business zone in North America. It straddles three municipalities surrounding the Lester B. Pearson International Airport in Toronto and was created as part of an initiative called Partners in Project Green. Through a dedicated Web site, businesses within the zone can access green building resources—funding grants and a variety of programs including free energy audits and a green parking lot program. A waste reutilization network (also known as an industrial waste exchange) currently in progress will create relationships between businesses disposing of materials and those who can use them.

When an EIP is located in an established business area, individual companies and facility managers have an opportunity to jump on board and guide the direction of the park. Programs within the Pearson Eco-Business Zone are managed by steering committees which include government and business representatives. They set goals for programs targeting, for example, specially designed infrastructure, energy efficiency retrofits or group purchasing blocks.

Capitalizing on collaboration

However, you don’t have to be located in a custom designed EIP to capitalize on the benefits of eco-industrial collaboration. It’s something that larger management companies have been doing for years among their own properties; sharing the costs of running multiple buildings in order to achieve economies of scale. Take, for example, CB Richard Ellis, a worldwide real estate services company that is setting itself apart by promoting its corporate responsibility values, including the environment and sustainability. It is among a growing number of property management companies that facilitates tenants going green by setting up recycling systems, supporting energy retrofits, finding funding sources and even facilitating networking between their clients. In line with this, CB Richard Ellis has a staff person dedicated to helping tenants achieve better business and environmental performance.

Oxford Properties Group has also embraced sustainability in its business practices. The company measures its own performance based in part on the environmental performance of its tenants. It tracks the amount of electricity, gas and water used per square foot as well as the total number of green building awards and certifications (which was up to 48 in 2007) and the total properties with green cleaning programs. Although self imposed, once the company has set these standards of measurement, it is in its best interest to provide tenant support and further increase their score.

Triple bottom line performance

So what motivates a company to embrace this type of approach? The cynical might say that it’s the potential for green marketing and the so called eco-edge, but the most prevalent factor motivating businesses to get involved in eco-industrial processes is actually cost savings.

Using fewer resources in a smarter way simply costs less money—whether you achieve it by changing your internal processes, diverting your landfill waste, sharing delivery truckloads or selling your non-potable wastewater to the guy next door. For facility managers, helping businesses achieve what is commonly known as triple bottom line performance is a way to achieve market differentiation. Customers are satisfied when you make a promise and deliver on it. Saving money on your bottom line is always a promise people are going to notice. There is an interesting cycle happening here in terms of sustainable business operations. Efficient industry not only realizes cost savings, but it is also starting to dictate the norms for the entire United States. The more businesses and managers take initiative to support their tenants and employees, the more it is actually expected as part of quality service. Whether motivated by government environmental regulations, corporate governance or inspired individuals who are just trying to do the right thing, businesses are changing. Regardless of whether you are a facility manager or a manufacturer, if you’re helping clients achieve better performance, you can bet they’ll reward you with loyalty. Green buildings are a good example of how good service leads to loyalty. Energy savings aside, people want to work in places where they get to breathe clean air and see natural daylight. They are more likely to stick with a company that gives them this opportunity; that’s one of the reasons companies located in green buildings have low employee turnover rates. Similarly, green buildings have statistically lower tenant vacancy compared to their traditional counterparts. In short, what’s good for employees is good for the business.

One’s waste is another’s treasure

One way to look at a group of facilities in a common location is as a community. All communities work best when their citizens get involved; the same is true for industrial and business communities. For example, the industrial community can work together to create economies of scale for purchasing. At the most basic level, two companies can order cleaning supplies together and get a bulk discount. The supplier also can save money (fuel) by then grouping deliveries. This approach can be extended to buying goods such as energy efficient windows or office paper, or for services like cleaning or landscaping. Purchasing blocks (buying co-ops) have more pull than individual businesses, and can sway providers toward offering better pricing on more sustainable products and services.

Next to buying co-ops, waste exchange is perhaps the simplest form of eco-industrial networking. Byproducts from one business become the inputs for another business in a “waste=food” cycle. Take for example a woman who owns a wood engraving company; her business makes custom carvings and architectural features. The company figured out that the winery next door could use their wood shavings in gift boxes instead of Styrofoam or newspaper. The wood engravers did not have to pay to get wood fiber picked up, and the winery did not have to source packing material, resulting in a mutually beneficial agreement. Another example is a soy products manufacturer that gives its byproduct to a farm for animal feed. Thousands of dollars are saved by the manufacturer avoiding the landfill and equal amounts are saved by the farmer in feed costs. These small scale examples can be extended to vastly larger programs and applied to more than just physical waste. In the Pearson Eco-Business Zone, district energy systems are already in use—linking businesses that generate excess heat (such as refrigerated facilities) to neighboring buildings that can reuse energy for space heating. Although these endeavors sound cost intensive, they will pay for themselves quickly through operational savings.

A win-win situation

Recent economic conditions aside, consumers (industrial, individuals and governments) are beginning to question the environmental and health costs of products that are purchased. Combine that trend with the always difficult challenge of competing on a global scale, and eco-industrial thinking begins to make economic sense—even becoming a necessity. Facility managers are uniquely positioned in this process; regardless of who pays the utility bills, they are responsible for overseeing business processes from capital expenditure to engineering issues, and they may also be tasked on operational efficiency. In stark contrast to the “call me when something goes wrong” management style, more progressive companies are now using an eco-industrial approach as an opportunity to get better economic performance from their facilities and benefit from the positive exposure of being good to the environment.

About the authors

Clay Braziller, B. Eng (Civil), MBA, is the manager of business development and marketing for Eco- Industrial Solutions Ltd. Braziller brings 20 years marketing, partner development and management consulting experience plus a passion for building sustainability into competitive advantages for corporations and regions to all his projects. His passion is building sustainability into corporate and regional advantages such as the development of the business model for Partners in Project Green, which created North America’s largest eco-business zone. Braziller may be contacted at clay@ecoindustrial.ca.

Jenny Rustemeyer, BA, DipT, is the marketing coordinator/ GIS analyst for Eco-Industrial Solutions Ltd. Rustemeyer has a unique combination of technical GIS knowledge and marketing expertise. She is a formally trained GIS analyst with a background in environmental and government GIS systems. Rustemeyer specializes in spatial resource analysis for eco-industrial parks and the creation of graphic and cartographic products. Rustemeyer may be contacted at jenny@ecoindustrial.ca.

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