More Regulation Please – New Toxic Use Reduction Act Increases Business Profitability by doing More with Less

Toxic Reductions Planning Good for the BottomLine

Toxics Reduction Workshop will help companies increase their profit while meeting regulatory requirements.

At a time when cost-cutting, frugality and thriftiness are prime business strategies, it seems counterintuitive to expect compliance with new regulations to increase business competitiveness. Yet Gregory Unruh says green screens and associated materials parsimony will do just that for your company.

Simplicity is the Ultimate Sophistication

Materials parsimony is a principle of nature we should all heed. Nearly 99% of all things in nature are made from four elements: carbon, oxygen, hydrogen, and nitrogen. This makes it possible for just about everything to be food for something, hence the adage “waste=food”; it is the ultimate recycling system. Unruh contends that businesses also need to narrow down and streamline their chemical inputs. Fewer and less toxic chemical compounds are better for business and the planet.

Green Screening Achieves Materials Parsimony 

Risk mitigation and the return of regulations are now the driving force toward “green screening” in a growing number of companies. Only a fraction of the synthetic chemicals on the market have undergone detailed human or environmental health risk assessments. Stories like the market withdrawal of BPA (bisphenol A) and the bioaccumulation of over one hundred and fourty industrial chemicals in the average person’s body are enough to give environmental managers, product marketers and corporate lawyers more than a few sleepless nights.

Green Screening is a process where by a company systematically scrutinizes its input sourcing decisions to weed out potential toxins and hazards from the supply chain. S.C. Johnson has been doing this over the last 10 years resulting in its new branded “Green List” products. Green screens force companies to narrow their use of chemical inputs as was the case with Rohner’s award wining Climatex Life-Cycle Fabric. When the company applied human health and eco-toxicity screens to supplier Ciba-Geigy’s dye formulation portfolio, ninety-nine percent did not pass – Voila, materials parsimony!

Unruh says that really good companies are taking green screening one step further by applying a positive screen for recyclability. This sets product streams up for value cycling or Extended Producer Responsibility. For some of us, all this sounds very expensive. But not so according to Unruh, benefits to the bottom-line come from several places:

Materials Parsimony is a law in nature that allows "waste=food" for something within the system.

Materials Parsimony is a law in nature that allows "waste=food" for something within the system. Courtesy of The Natural Step.

– reduced supplier complexity
– reduced production complexity
– reduced toxics risk
– reduced compliance costs
– volume purchase discounts
– improved health and safety
– improved worker productivity
– improved product attributes
– improved environmental performance

Even initial naysayers like True Textiles, a company that projected that green screening would increase its chemical costs, saved nearly $ 300,000 per year in volume discounts from a consolidated vendor base and reduced supply chain complexity.

Innovation Overcomes Challenges

I know it all won’t be roses and wine. Green screening requires good information and trade secrets can stand in the way. Also, what happens if you are a small player and can’t leverage discounts out of your suppliers even after consolidation (sounds like an opportunity for a buying group). Then there are issues of risk management around single sourcing and the chance that no market exists for your fully recyclable product at the end of its life. I won’t even mention the product performance concerns that will be raised when a company’s favourite active ingredient doesn’t make the cut. Yes, there are many complications, but Unruh gives ample evidence that all these issues can be overcome. There is money to be made here and companies that don’t play will be at a competitive disadvantage. When it comes to green screens and material parsimony, less is definitely more.

Increasing profitability, green screening and materials parsimony are part of our workshop: “Developing Your Toxics Use Reduction Plan “, September 30, 2010 at Humber College (North Campus), Toronto. Register by September 9th to access the $ 100 Early Registration Discount.

The concept of Materials Parsimony is one of four principles that Gregory Unruh writes about in Earth, Inc.: Using nature’s rules to build sustainable profits. Harvard Business Press, 2010. We will share the other principles in future blogs.

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About Kathryn Cooper

Kathryn Cooper is a committed sustainability practitioner and educator moving companies toward “green” profitability and sustainable competitive advantage by unlocking human creativity and technical innovation. Over the last two years she has had the privilege to work with companies like Dupont, Zerofootprint, WWF Canada, and Partners in Project Green on sustainability issues, best practices and renewable energy. Kathryn is a graduate of York University with a Master of Education specializing on Sustainability and the Environment. She holds an MBA from Wilfrid Laurier University, and a Bachelor of Science from the University of Guelph.
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2 Responses to More Regulation Please – New Toxic Use Reduction Act Increases Business Profitability by doing More with Less

  1. BR Deshpande says:

    Kathryn,

    Thanks for the interesting piece. I fully agree with Unruh’s statements regarding benefits to bottom line from complexity reduction. However I am curious about the strategies and tactics employed to do it.

    – reduced supplier complexity
    – reduced production complexity

    To start with how are they measuring this complexity? Doug Hubbard in his book “Failure of Risk Management” says that the biggest reason for failed risk policy is not knowing if something worked. Unless you measure complexity to start with, attempts to reduce it is merely talk, and we can come away thinking we have reduced complexity, but not really!

    • Dear B.R. – Thank you so much for your comments. Yes – I would agree that complexity would have to be measured (formally). In this case, perhaps we could use environmental issues as proxies for those measures. If toxins contaminate the environment, create body burden and illness all while costing (the company and society) more money we might consider these things an indication of systems failure. Unfortunately, we are not in the habit of measuring externalities and internalizing them to our decision making processes. We are not in the habit of seeing the systems that connect the masses of “causes” and “effects”. Hopefully some of the work you are doing will bring clarity to business, government and citizen decision making – and make this world a better, safer, more integrated place in which to live.

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