Nearly 200 top executives from small OEMs to aerospace manufacturing powerhouses gathered at Pratt & Whitney's Hangar Museum in East Hartford April 19 to share their sustainable manufacturing stories and hear from companies integrating sustainability into their operations.
Keynote speaker L. Hunter Lovins, president of Natural Capital Solutions, emphasized the myriad benefits of sustainable practices, noting they drive down costs, reduce risk, increase productivity, enhance brand equity, manage the supply chain, raise revenue, attract top talent, and boost stock value.
In fact, she said, studies find 83% of investors believe sustainability has a significant impact on shareholder value.
Companies that are leaders in sustainable, social, and good governance policies, she said, have 25% higher stock value than their less sustainable competitors—evidence of the business case for what's become known as an integrated bottom line.
This holistic new measure, she said, recognizes the interdependence between business, environment, and society and emphasizes that businesses perform better financially when they support all three.
"When Walmart went green, I knew this was irrevocable," said Lovins, who has consulted for the retail giant as well as International Finance Corporation, Unilever, Royal Dutch Shell, Patagonia, Interface, and Clif Bar.
She has also briefed leaders of local governments, Congress, the Pentagon, the United Nations, and heads of state in 30 countries.
In 2007, Walmart announced a partnership with the Carbon Disclosure Project to measure the amount of energy to make products throughout its supply chain, from procurement through manufacturing and distribution.
Walmart used this benchmarking tool to identify ways to make the process more energy-efficient.
"Who died and made CDP god?" Lovins asked. "Walmart."
According to the 2013 UN Global Compact-Accenture CEO Study on Sustainability, Lovins pointed out, 93% of CEOs believe sustainability is a key to success.
“A good capitalist,” she said, “manages and enhances all forms of capital.”
Still, when it comes to sustainability, a recent McKinsey report finds only 30% of CEOs know what to do.
A good capitalist manages and enhances all forms of capital.
"This is already vexing some of the big utilities,” added Lovins, who believes they will largely transform and survive.
Quieter and Cleaner
Integral to success, said Lovins, is telling your story and partnering with companies that “get it,” something that Pratt & Whitney has being doing for some time.
Mary Anne Cannon, vice president EHS for Pratt & Whitney, discussed some of the big three engine manufacturer's 2025 sustainability goals, which include major reductions in emissions and noise.
"We're a lot quieter and cleaner," said Cannon.
Among Pratt’s accomplishments and goals, she noted:
- Since 2000, the manufacturer reduced greenhouse gas emissions by 36% (with a goal of 80% by the company’s centennial anniversary in 2025)
- Reduced water consumption by 80% since 2000, with a target reduction of 75% by 2025.
- Ensure suppliers are 100% green certified, meeting resource conservation targets and world-class safety rates.
- Strive for zero waste to landfills, and since 2000 increased industrial process waste recycling from 41% to 61%.
- The company’s PurePower engine family fleet aims for a reduction in carbon dioxide emissions equivalent to planting one million trees a year.
There are strong market forces at play here. They’re driving sustainability down to us, and we’re driving it down to our suppliers.
"We're also doing this on the military side, not just the commercial aircraft.
"There are strong market forces at play here. They’re driving sustainability down to us, and we’re driving it down to our own suppliers."
Other advantages to Pratt & Whitney’s commitment to sustainable manufacturing include operational efficiencies (driving productivity up and costs down) and organizational benefits.
"It's a market differentiator," she said. "When you’re trying to recruit the best talent, your company needs to be on this journey. Millennials will want to come work for you."
'Part of Our Central Nervous System'
The forum closed out with a panel of manufacturers describing their own sustainable journeys—from benefits gained to lessons learned.
Glen Greenberg, president & CEO of Turbine Controls, Inc., which repairs and overhauls aircraft products, recalled, “Ten years ago, we had a customer, Mr. Matsui, come in from Japan. I thought that he would love our company. He asked me, 'Why is your lighting so dull? Talk to me about safety. Tell me about throughput.'
"We hadn’t taken the journey. I didn’t know the answers."
Sheepishly, Papp told his guest to talk to the company’s general manager.
Since then, Turbine Controls has followed Pratt & Whitney’s lead and does business with several divisions of UTC companies as well as other companies.
"We have at least eight to 10 sustainability projects a year, saving at least 20% with each project," he said.
Jeffrey Paul, president of Whitcraft Group, said his company's sustainability story began when one of Whitcraft's customers required that they be ISO 14001-certified.
“We thought, 'Great, another unfunded requirement from a customer,'" he said.
"We're a sheet metal fabricator. The certification process gives you a framework for what you're doing, because everything you buy either goes out to the customer or becomes waste."
You’re making a cultural difference within the company. It’s part of our central nervous system.
"We moved away from solvent-based to water-soluble-based lubricants, saving $30,000 to $40,000 per year.
"We also steal ideas from our customers. We benchmark from each other. Our big breakthrough was a hot form oven, which we did ourselves."
A range of processes for forming high-temperature alloys, hot forming reduces waste, cuts down on forming times, lowers costs, and eliminates the need for gassing and chemical milling.
"We usually start with the early successes, build momentum, and work up to the bigger challenges," he said.
Tom Jones, vice president of engineering services for medical device company Medtronic, which makes everything from pacemakers to sutures, said his company put in two co-generators, brought in solar power, and reduced landfill waste and water use by establishing clear metrics.
The company made modifications to its organizational structure to make people accountable for the company's sustainability goals.
"The way we deploy our goals, it starts with senior VPs, all goals clearly defined with metrics, looked at quarterly, and connected to salary increases," Jones said.
"It took some work to wire all that in, but you're making a cultural difference within the company. It's part of our central nervous system.”
Initially Pratt & Whitney's North Berwick, Maine, plant—the largest in the state and one of its largest employers, focused on safety, said the plant’s general manager, Mike Papp, "whereas our environmental approach was mostly about compliance."
He recalls a group doing a walk-through of the facility.
"We opened our eyes to how much waste we had. Instead of shipping out coolant, we heated it up until it evaporated," Papp said.
"We took a look at this and thought, 'Really?' We asked ourselves, 'What happens to dunnage, the scraps from the machining process?'
This is a time when funds invested in a green economy are under threat from the General Assembly.
"About three or four years ago, our interns got to meet each other. A lot of them had a passion around sustainability. So that summer, they were charged with giving us new ideas.
"They questioned and challenges the old ways (like, 'Why are you using a pallet only once?'), and we were able to attract qualified young people and get some great ideas. You grab those nuggets, and workers and management rally around it."
Department of Energy and Environmental Protection Commissioner Robert Klee told the group, "using less fuel and reducing noise and emissions is something my agency can get behind.
"We've embraced lean concepts from the manufacturing sector. No one company is doing this by themselves. There's a whole ecosystem of suppliers supporting this."
Referring to Connecticut’s current budget crisis, he added, "This is a time when funds invested in a green economy are under threat from the General Assembly.
"When you raid those funds—from the Green Bank—you're raiding a bank that provides financial capital for sustainability.
"This is the worst possible place to start looking for dollars."