Embracing sustainability is essential to a company’s success, executives at the 2012 Innovation Summit agreed while addressing more than 200 attendees gathered at Fairleigh Dickinson University (Madison) on Oct. 4, 2012.
However, measuring sustainability through life cycle analysis provides a better overall picture of how well a company is doing at meeting the goal of handing the planet back to the next generation the same way it was received.
After reviewing global factors like population expansion and urbanization, which make having a small environmental footprint necessary for all companies, Hans Engel, chairman and CEO of BASF (Florham Park), said, “For us, sustainability means combining economic success with environmental needs and social responsibility.”
Engel noted, “We are not driven by altruism. We are in the business of making money. But we fully realize that if you are not sustainable, you will not be in business in the long run.”
Many BASF customers had asked the company to look at biofuels, for example, which they view as being environmentally friendly. BASF agreed to look into the matter but, upon doing a life cycle review, found that these fuels lose too much energy during production.
“We are taking a much broader view,” said Engel. “We do eco-efficiency analysis. We want to understand from cradle to grave — from raw material to use to waste disposal — what the footprint of a product we produce is.” When companies go that route, he said, customers understand that it is often much more energy efficient to use something such as natural gas rather than biofuels.
BASF recently built a sustainable North American corporate headquarters in Florham Park, taking into account water efficiency, indoor air quality, lighting, energy consumption and construction materials. More information on specific features of the building can be found here.
Ian Shankland, Honeywell (Morristown) vice president and CTO of performance materials and technologies, also emphasized the need to look at materials from a life cycle perspective, taking into account how much energy they use, as well as emissions, at each stage including manufacture, transportation and use. “If you don’t look at it from a life cycle perspective, you make the wrong choices,” he said.
Governments are particularly guilty of this, sometimes prescribing solutions to highly complex problems instead of letting industry solve the problem the best way it knows how, Shankland said. Honeywell, like most large companies, uses outside labs to document the life cycle impact of new technologies, he added. “If we did it ourselves, no one would believe us,” he said.
Speaking for Air Products and Chemicals (Allentown, Pa.), Monty Alger, CTO and vice president, said a focus on total lifetime assessment is essential. “If you measure a company in isolation, it often won’t achieve goals of sustainability.” However, if you measure it through the product’s life cycle, it often will.
Air Products is one example of that. “We make hydrogen as a transportation fuel,” Alger said. If you look at the CO2 emitted from a car running on gas, the majority of its emissions are at the tailpipe. The company making the gas makes only 90 grams of all the CO2 required to fuel a car for a mile, but the total output is 300 grams/mile. Hydrogen, from natural gas, has a total CO2 emission of 160 grams/mile, but much of it is at the manufacturing point.
“This is how you have to think about it” from the overall perspective, Alger said. It has serious implications for how we set policy, he noted.