Going Green Is a Moneymaker for These Business Owners
The CEO of the high-end ski resort Aspen Skiing Co. wanted to align his business with the needs of the mountains, streams and trees upon which its existence depended, but he wasn't thinking of improving the company's bottom line when he hired a vice president of sustainability.
It took Auden Schendler from the Rocky Mountain Institute to show Aspen Skiing that environmental conscience wasn't divorced from critical business need.
"The CEO felt that a ski resort takes from the environment and ought to give back. But I flipped the rationale to make the case that our work was a business necessity in the modern world for competitiveness, leanness, PR and to best serve customer wants. And that, arguably, is why I'm still employed," said Schendler, vice president of sustainability.
Schendler started out with what he calls "the low hanging" fruit, or those projects that are such obvious money savers it almost seemed wasteful not to implement them.
His plan was to swap out all the incandescent light bulbs throughout the ski resort's buildings and replace them with compact fluorescents or light-emitting diodes (LEDs), and to replace all the T12 linear fluorescent lights with T8s, all of which would help reduce energy usage and costs.
The project started with the two-story garage and backhouse of one of the resort's five-star hotels. It cost $23,000 to implement and has been saving the company $10,000 annually since Schendler joined the company in 1999.
Next on the agenda was replacing the bulbs in the hotel's many guestrooms, lobbies and restaurants. Initially, Schendler met with some unexpected pushback. The glow of the florescent lights, some in management felt, would not be flattering to the guests, which could negatively affect their high-end resort experience.
Schendler carried on with various other lighting retrofit projects around the resort.
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"Each time it was a process of pitching the project, showing the return on investment (ROI), and seeking approval," said Schendler. Then two years ago, during a management meeting, the company's CFO Matt Jones, had a "eureka" moment.
"'Wait a second,'" Schendler recalls the CFO saying. "'The return on investment for lighting retrofits ranges from 30 percent to 200 percent? How can we afford not to do all of them?'" Jones asked.
From that day forward CEO Mike Kaplan declared a ban on incandescent lights throughout the resort. It helped that energy efficient light bulbs have improved in quality and become even more efficient, while also offering more attractive lighting options.
In 2004, the ski resort made a $1.1 million investment in a 150-kilowatt solar panel array, located on property owned by a local high school. Using solar energy combined with the resort's traditional sources of energy has allowed the company to offset its total energy costs. Aspen Skiing now owns five solar projects. "The project has been returning at about 8 percent after taxes," Schendler notes.
Big, ugly boilers were next on Schendler's hit list. A simple HVAC inspection will check the efficiency of the heating, ventilation and air conditioning systems in a building. Replacing inefficient boilers, furnaces and ducts can significantly decrease annual energy cost.
Even simply caulking or weather-stripping a window can save energy and increase a company's savings over time. "The audits are cheap and generally save a business anywhere from 6 to 30 percent," Schendler said.
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In 2007, Aspen Skiing spent $30,000 to replace one of its inefficient boilers resulting in a $5,000 annual reduction in heating costs. Since that time, virtually every boiler in the company has been replaced, at a total cost of about $2 million.
New Belgium Brewing, based in Fort Collins, Colo., has made sustainability a key component of its business model from the start. "People often don't realize the power in incorporating sustainability efforts into the culture of a company and of getting the workers involved in those efforts," said Katie Wallace, sustainability specialist at the employee-owned brewery.
In 2011, a couple of New Belgium's employees realized that if they decreased the size of the packaging holding the 12-pack bottles of beer, they could also remove the cardboard partition that separated the individual bottles.
"The bottles did a great job of supporting themselves, and we've seen no additional breakage from the switch," said a packaging technician at the company Phil Pollick. In 2013, it did the same for its cases of 22-ounce bottles of beer.
The move also eliminated a lot of wasted time on the packaging assembly line. "The dividers usually fell over on the way to the package, they sometimes never loaded onto the line properly and sometimes they would not fall between bottles," Pollick said.
"The many exposed edges would also easily snag along the way, jamming up the equipment. All in all, removing the dividers is saving a lot of time on the packaging line."
The removal of the cardboard dividers now saves the company about $90,000 a year on the 22-ounce cases and about $260,000 a year for the 12 packs. "Our teams are constantly engaged in finding new ways locate cost saving measures through sustainable methods," Wallace said.
The beer company replaced its conveyor belts with a minimal water conveyor lubrication system, which cuts water costs in that process by 85 percent, or over 1 million gallons a year. The system also reduces the brewer's water discharge costs.
Part of the enthusiasm for saving money at New Belgium comes from the employee-owned model. "Our employees are well aware of the goings on of the business and are expected to participate on that level in terms of locating strategies for greenhouse gas reduction and water reduction efforts, while maintaining good profit margins," Wallace said.
Currently, New Belgium is the third-largest brewer of craft beer in the nation and the eighth-largest brewery.
Humanscale, a New York-based mass producer of furniture, has also found ways to cut its carbon footprint, while simultaneously reducing its electricity, packaging and shipping costs.
One way was to cut back on individual packaging in favor of bulk. By disassembling the legs from one of the tables it sells and lining the table tops against each other before shipping them out, Humanscale was able to ship four more tables out in the space it previously used to ship just one.
Shipping costs were cut by a quarter, and packaging costs were reduced by 70 percent. The stacking method also reduced the number of trucks that were necessary to ship the tables, which cut down on carbon emissions as well as saving space in its storage facilities.
"We try to use materials efficiently and strive to use less material when making our products," said Jane Abernethy, Humanscale's head of sustainability.
If U.S. businesses were to reduce greenhouse gas emissions by an average of 3 percent a year, they could save up to $190 billion in 2020 alone, or $780 billion over 10 years, according to "The 3% Solution: Driving Profits Through Carbon Reductions," a World Wildlife Fund and Carbon Disclosure Project report.
That sure is a lot of green, which your business may be missing out on.
—By Leslie Kramer, Special to CNBC.com.