Steelcase as Environmental Leader

By Kate Bachman | September 23, 2013

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One core value that has remained constant throughout environmental leader Steelcase’s www.steelcase.com century-long existence is its commitment to protecting the environment. The manufacturer’s environmental leadership vision is: “To become more environmentally effective tomorrow than we are today by conserving resources, preventing pollution, achieving sustainability, exceeding compliance obligations, and nurturing environmental consciousness in our people.”

As a manifestation of that commitment, the company set goals and implemented

strategies to reduce its overall environmental footprint by 25 percent by its 100-year anniversary in 2012.

Steelcase Director of Global Environmental Performance Dave Rinard has been involved in environmental work for Steelcase for 34 years. In a recent interview, he relayed how the company set its environmental goals, achieved them, and is reaching for new goals. Here are excerpts from that interview:

Environmental Goals

“In 2006, we reset our environmental goals. We used that as our base year and 2012 as our goal year, because it was our 100-year anniversary. The dimensions that make up our environmental footprint are water, energy/ greenhouse gas emissions (GHG), waste, and volatile organic compounds (VOCs). We report energy in GHG equivalents, because that’s the metric everyone is interested in.”

Value-Centric Beginnings

“Our 100-year anniversary as a company gave us an opportunity to look back and understand where we’ve been, where we are, and where we’re going. To look back and see how that foundation of sustainability was built, you really have to go back to 1912, when the three primary families founded the company.

“They took an approach that I would call value centric. They had a strong belief about how their company would conduct itself. If you look through our corporate history, you’ll see all sorts of references about how to treat people and the community … what today you might call social responsibility and sustainability. It was a foundation built around being a responsible business.

“The second generation evolved and refined that thinking and concentrated more on environmentalism. Peter Wegge, the son of one of our founders, had been an environmental philanthropist and activist since just after WWII. His influence had a lot of impact on the company. He inherited his father’s portion of the company, so he had the financial capacity to make his dreams happen, and he took very seriously the responsibilities that came with the wealth he was given. He had a big impact on that second generation’s thinking, reinforcing the values of their parents and carrying it further.”

An Eco-systematic Way to Run Business

“Environmentalism is a continuing evolution. I’ve seen an interesting shift over time. Our environmental department was created in 1968. The first Earth Day was 1970. Back in those days, the environmental engineer was a chemist, dealing with wastewater issues related to paint washers. Also during that time, we operated four very large zinc plating systems. When I started in 1979, a lot of what we did was engineering related. Then there was a huge push on compliance-related ssues. Today, it’s more about being a globally integrated enterprise.

“In the 1970s, steel as our primary business; finishing steel product was our largest area of impact. Wepainted a lot of steel. Paints in the ’70s were largely solvent-based enamels, so VOC emissions were a significant issue. Hazardous waste generation was a significant issue.

“Our efforts were focused on how to manage that impact with an eye toward the future. We could see where regulations were going to go, and it doesn’t take a lot of brilliance to see that being in front of that regulatory curve is better for the business.

“We started a trickle process that began with developing high-solids coatings. Paints were largely about 70 percent solvents / 30 percent solids in the early days. High-solid formulas flipped that ratio and made paints 40 percent solvents / 60 percent pigments and resins, which took a dramatic bite out of air emissions.

“As high solids became mainstream, the next generation of coatings came along, powder coatings, which are zero solvent.”

Emissions = Waste

“Steve Martin, who was the manager of finishing back then, and I sat down with Adolph Bessler. who was the VP of manufacturing. Adolph said to us, ‘Put together a scenario of what a zero emission paint shop would look like.’ I was 26 years old. I came up with a 10-year, $80-million plan. I thought he’d throw me out the door. He said, ‘I’m sure you can do it for less. We’ll get smarter about it.’

“One of the overlooked aspects of emissions is that paints were 70 percent solvent. Back then we were spending $20 million a year buying paint. That means that 70 percent, or $14 million of every $20 million we spent, we were releasing into the air as pollution. We don’t make money on pollution. We make money on furniture.

“We’re in the furniture business. We’re not in the waste and emissions business. We’re not in the air pollution business. Waste and emissions are yield losses. Emissions from paint are raw materials we’ve purchased, and if they’re not leaving as a product output, they’re a yield loss.

“You buy 100 pounds of paint, and if 100 pounds of paint don’t leave as product, that’s waste. When we buy steel, we have a yield number. When we buy paint, we have a yield number. Any time that’s not at 100 percent, we have opportunities for lean improvement.

“So we looked it as a $14 million-a-year opportunity. The $80 million came down closer to $30 million, and the $14 million savings helped create about a two-year payback.

“Plus we created a better-quality product, turned the paint shop from an environment in which you had to pay people extra to work there because it was so unpleasant, into a climate-controlled area and a preferred job.

“We went from generating 15,000 to 20,000 gallons of dirty solvent a week, which we recycled as hazardous waste, to being a small-quantity generator of hazardous waste today, which means we generate less than 200 gallons in any month.

“Everyone’s focused heavily on lean. Lean concepts apply to green. Lean means continuous improvement and reducing waste. It is the same on the environmental side—reducing waste in all forms—solid waste, waste-to-air, waste-to-water.”

The Link from Green to Business Performance

“When we first looked at doing some of these things, the price tags were big. But we framed things in the context of environmental and business performance.

“My mission has always been to change the perception of an environmentalist from the moose-and-goose, feel-good, tree hugger who doesn’t understand business. That’s why we named our department environmental performance. The message is that we’re about business results.

“I believe in saving the plant; that’s what my life is about. But in the business world, that is seen as feel-good stuff.’ I’ll do it if I have time, but it’s going to cost me more money.’

“By linking lean and green processes to performance, we can show that these processes contribute to business results. And when we do that, business leaders don’t see it as an obstacle but a path. That’s what makes the difference.

“If you go to plant managers and say, ‘Do you care about the environment?’ they will say, ‘Of course.’ If you say, ‘You recycled 1,000 lbs. of waste this week,’ they’ll say, ‘Yup, I feel good about that,’ and they’ll go back to their offices and 5,000 other things will scream for their attention.

“But if you say to the plant manager, ‘You recycled 1,000 pounds of waste and it contributed to a 1 percent reduction in your cost of goods sold,’ not only will they feel good about it, they’ll assign people to it, measure it, and manage it because the cost of goods is a measurement they are accountable for.

“Now what I’ve done is taken my environmental issue and married it to their business issues, and they will accomplish more through their influence network than my small team ever could.

“It is endless dominoes. One falls, then the next one. One change creates the opportunity for the next one and the next one and the next, and hopefully we’ll never run out of dominoes.”

Success, New Goals

“We really blew the doors off the 25 percent and more than achieved our 2012 goals. Our timelines for reducing VOCs began in 1993. We achieved a 96 percent reduction of VOC emissions in our metal finishing. We’re 100 percent powder coat on steel finishing.

“In 2012, we set new goals. Now we are targeting another 25 percent reduction in our environmental footprint using 2010 as our base year. From 2010 to 2020, we seek to achieve another 25 percent reduction.

“Wood finishing is the new, large opportunity because traditional chemistries still rely on VOCs. Wood finishing is a whole different animal with a much different chemistry.

“The world economy has had a huge impact. Global competition, resources, require this comprehensive way to think about and run the organization so that we’re competitive, we survive–and more than that–so that we thrive. That requires innovation, creativity, and engagement, not just with management and engineers, but at every level with every person the company comes in contact with.

“Environmentalism, sustainability isn’t an activity you pick up. It’s a systemic way you run your company. It’s a way you think about your business. It requires a holistic approach and an integrated system and systematic management to hold those values and make them more than feel-good statements.”

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