Companies see green in enviromental efforts - 11/17/06

Interface Inc., the Georgia carpet giant known for its own environmental revolution, is teaching other companies how to become more "green."

Atlanta-based Interface (Nasdaq: IFSIA) has created a corporate training and consulting business called InterfaceRAISE to teach executives about environmental sustainability and help them change the way their companies affect the environment. Interface's latest effort is part of a broader trend of companies becoming increasingly concerned about their relationship with the environment -- and actually spending money to make constructive changes.

The company, which says it has coached Wal-Mart Stores Inc. (NYSE: WMT), General Electric Co. (NYSE: GE) and even NASA on how to solve environmental challenges, is now seeing an even greater interest.

"A lot of big companies are shifting from seeing this as corporate social responsibility, to stepping across the line of seeing this as a bona fide business opportunity," said Jim Hartzfeld, managing director of InterfaceRAISE. "Those ripples are just scattering across industry in an amazing way."

Environmental Resource Services Inc. (ERS), an Atlanta environmental consulting firm, partnered with Interface to create the program. The program costs anywhere from $30,000 to $40,000 for a company to send a senior leadership team of more than a dozen executives to Interface.

InterfaceRAISE also has a corporate strategy consulting practice that sends experts out to companies to help them develop environmental initiatives at their own locations, which costs anywhere from $18,000 to more than $100,000 depending on the scope of the work.

More companies seem to be willing to pay experts in order to learn how to be more environmentally savvy. "There is a groundswell of awareness, true commitment and engagement among American corporate executives that we haven't seen before," said Susan Graff, a former EPA executive who founded ERS 10 years ago.

Companies are motivated by pressure from consumers, clients and investors.

There is also the lure of a marketplace eager for products and services that are socially and environmentally friendly -- worth an estimated $188 billion, according to the group Lifestyles of Health and Sustainability.

Experts say a company's environmental policy can cause it to win or lose in five key areas: brand and reputation, cost reduction, talent recruitment, employee commitment and innovation.

Companies increasingly see that environmental investments generate strong returns, said Hartzfeld, a chemical engineer with an MBA who joined Interface in 1993. "It's the opposite approach of the old environmental ideal of having to give up things you like," Hartzfeld said. "Now the philosophy is that in order to be environmentally sustainable you have to be economically viable as well." For example, many companies are learning that they can cut costs by reducing waste or using alternative fuels. Interface has saved $326 million through its own waste reduction program, which represents about one-fourth of the company's earnings per share over the past 10 years, Hartzfeld said.

Atlanta-based United Parcel Service Inc. (NYSE: UPS ) has shaved more than $1 million a month off fuel costs through its fuel conservation program, said UPS spokesperson Heather Robinson. The shipping giant, which operates about 1,500 alternative-fuel vehicles including a fleet of electric trucks that serve Manhattan, plans to roll out 50 hybrid electric vehicles in the first quarter, Robinson said. The new trucks will offer a 35 percent improvement in fuel economy.

In collaboration with several other organizations, UPS helped build two hydraulic hybrid trucks that operate with a hydraulic system and a diesel engine working together. Early results showed a 70 percent improvement in fuel economy and a 40 percent reduction in carbon dioxide emissions.

"The anticipated savings are phenomenal," Robinson said. Public relations and marketing firms are also seeing a growing interest from their corporate clients about communicating environmental changes. Trevelino/Keller Communications Group recently launched its "GreenWorks" practice. "For a lot of our clients, this is in the back of their minds, so we want to work with them to bring ideas to the table that are more environmentally friendly," said Genna Keller, principal of Trevelino/ Keller. "It makes sense from a corporate social responsibility perspective, as well as a business perspective."

Trevelino/Keller is working with Atlanta-based technology company TRX Inc. (Nasdaq: TRXI) to help develop new environmental initiatives. TRX's CEO sends a monthly e-mail to employees, and last month he asked for suggestions about green initiatives. "It was by far and away the most overwhelming response we have gotten on any topic," said Farrell Harwood, director of marketing at TRX.