January 27, 2000

Report looks at how `green' practices can save firms money

Can saving salmon help companies save money?

Absolutely, according to a recent economic study that examines how enviro-friendly tactics affect businesses' bottom line.

Titled "Saving Salmon, Saving Money: Innovative Business Leadership in the Northwest," the report shows that over the last seven years, 137 northwest businesses polled saved a total of $42 million from reusing and recycling products.

The report was prepared by academic economists Karin Sable, of Puget Sound University in Tacoma and Eban Goodstein, of Lewis and Clark College in Portland; and Bob Doppelt, director of the Center for Watershed and Community Health, a non-profit research institute in Portland.

"Saving Salmon, Saving Money" analyzes economic data offered by businesses and organizations representing nine industry sectors and employing one-third of the work force in Washington and Oregon. Data on cost savings were available from only 137 of the 375 firms polled.

"Our research suggests that efforts to improve stream health will also improve the environmental efficiency of our economy which will translate to cost savings and increased productivity for firms, communities and the public sector," Doppelt said.

The authors contend that new regulations -- such as those prompted by the recent Endangered Species Act listings -- push businesses toward environmental preservation, and a new movement called "eco-efficiency" is evolving in the corporate world.

Eco-efficiency means creating an economy that is both economically and environmentally efficient by making gradual improvements in resource use and impacts to the environment, according to the report.

For instance, Auto Hound, an auto body shop in South Lake Union, has reduced its costs by $3,000 per year through recycling and water conservation efforts.

"We recycle paper, bumpers, scrap metal, paint thinner, antifreeze, batteries and freon," said Dee Baskerville, store owner. "Our garbage bills are down, and we're disposing less and less hazardous waste."

Baskerville, who says he has run a "green and clean" business since Auto Hound opened in 1993, admitted that recycling takes more time and thought. But when both environmental and economic returns are greater, he said the choice to reduce pollution is easy.

K2 Corp., a Vashon Island-based firm that manufactures snowboards and ski equipment, also found that reducing waste cuts costs. Manufacturing Director Tom Taylor said the company set a goal of reducing waste, including hazardous waste, air emissions and solid waste, by half each year.

That may sound like a stiff challenge, but Taylor says the result has been a better product, produced more efficiently.

"When we switched from using a solvent-based ink to ultraviolet-based ink on our snowboards, we cut air emissions from 300 tons to about 15 tons each year," Taylor said. "Sure that helps the environment, but we also have a more attractive, higher quality product at a lower cost."

Taylor added that tougher environmental regulations didn't spark the company's efforts to reduce pollution. Avoiding problems with the Environmental Protection Administration is nice, he said, but eliminating waste is smart for business, and smart for the environment.

Size doesn't matter when it comes to businesses saving money by recycling, the report shows. From mom-and-pop auto stores to billion-dollar corporations, green business tactics can cut costs.

According to the study, Boeing Commercial Airplane Group in Portland, for example, is saving $92,000 per year in energy costs. The firm connected independent compressed air systems in three main production buildings, allowing two of the compressors to be turned off during off-peak hours.

A heroic effort isn't necessary to reduce pollution and waste. The study claims that even small improvements, such as using reusable coffee mugs, save money and the environment over time.

David Lindahl of the Portland-based economic consulting firm ECONorthwest, said the region's commitment to restoring salmon runs will have negative impacts on some businesses. Agriculture and timber-based industries will have to change practices that harm salmon; and change often costs time and money.

In the long run, however, Lindahl says the economy will adjust to new business tactics, and come out ahead.

ECONorthwest released a report titled "Salmon and the Economy" in conjunction with "Saving Salmon, Saving Money." ECONorthwest's study looks at the potential benefits and costs of saving salmon and suggests several ways state and local governments can help industries make pro-environmental business decisions.

For instance, eliminating tax breaks and subsidies for activities that hurt salmon, such as programs that encourage building in flood plains may curb the amount of development in flood-prone areas. Also, eliminating sales-tax exemptions on some agricultural chemicals will encourage farmers to use pesticides and other chemicals more sparingly, which will reduce pollution in nearby rivers and streams.

Offering building subsidies only to developments that are "salmon friendly" is one way to get developers on board with salmon restoration, the study states.

"This isn't just about salmon," Lindahl said. " This is about businesses realizing that what's good for the environment can also be good for them. Really, good environmental practices are low-hanging fruit for most firms."