A growing number of companies talk about operating in a sustainable manner, aiming to make operations friendlier on the environment. Fewer, though, are the organizations that actually succeed.
There are two main reasons good intentions may fall by the wayside. First is if the initiative is not supported by the highest level of the company. If they don't buy into it, then no amount of groundswell from the troops will make an environmentally friendly program take flight.
Second is the fact that businesses are looking to make profits, and if such programs cut into earnings, the shareholders aren't likely to stay happy for long, even if there is good work being done.
Despite these obstacles, however, more firms inside and outside the rubber industry are finding ways where being “greener” can co-exist with making more money.
Jim Hill, CEO for the NAFTA region of Continental A.G.'s ContiTech business, touched on some of the ways his company has embraced social and environmental responsibility during his keynote address at the Hose Manufacturers Conference.
First, he emphasized that the German-based parent company has had a long tradition of committing to quality and environmental protection. He said the effort starts by committing to four key principles: the environment, energy savings, safety and recycling. Under each category, Conti has developed both processes intended to save money and also new products that the company sells as part of its portfolio.
On the environmental side, he said a lot of the products are geared toward meeting stricter legislation being passed around the world. He said California and Ohio are two states where new laws often come first, but even China is trying to get on board.
Looking at energy savings, he told of a crimped steam hose ContiTech markets where one length of 10-foot hose stops a leak and saves the customer $12,000 a year from each length of hose.
Many of ContiTech's products are geared toward keeping operators safe, something that is the right thing to do but also generates good sales opportunities for the firm.
As for recycling, he said ContiTech recycled 1 million pounds of scrap hose in 2014 in the U.S. alone.
The economics of operating in this manner are really quite simple, Hill said. ContiTech can quantify it by creating value for something the customer wants and is willing to pay more for. This brings in more revenue for ContiTech, normally for higher-margin goods that boost profits.
Likewise, when making changes to reduce things like energy consumption—the overall company has cut usage 17 percent thus far, with the long-term goal 40 percent—those savings too go directly to the bottom line.
That's an equation all shareholders can get on board with.