Greening Business to Boost Local Competitiveness

Can environmentally responsible business practices help improve local economies?

That’s the question asked by Environmental Strategies for Industrial Development, a new report from the Alliance to Save Energy, the product of a roundtable of business, government, and academic leaders held last fall at Clemson University in South Carolina.

Their answer: An emphatic Yes.

The report describes an industrial economic development vision that is both environmentally positive and pro-business. It illustrates how industry’s ability to comply with environmental regulations will improve directly with increased resource management competencies. The report’s vision is to help government and industry to find less costly ways to administer the monitoring and reporting duties required by regulatory compliance.

It concludes with a call-to-action for implementing a demonstration project in South Carolina. But the lessons can apply anywhere.

The project resulted from a 2004 U.S. Commerce Department report titled Manufacturing in America, which summarized business leaders' concerns about the lackluster performance of the U.S. manufacturing sector.

Two industry concerns that were articulated in the Commerce report were access to affordable, reliable energy supplies and the burden of industrial regulations and reporting requirements. These concepts are related—any manufacturer that reduces energy waste also reduces combustion emissions. By extension, this reduces the company’s exposure to the risk of regulatory non-compliance.

The new report offers a strategy for economic development that (1) enhances industry’s awareness and practice of waste minimization, (2) implements simplified, less costly methods for administering regulatory duties, and (3) evolves the regulatory enforcement role of government to include valuable technical assistance for industry.

Central to this vision is voluntary participation by companies in benchmarking of common air, water, and waste management functions. “Focusing on everyday plant utilities largely avoids the issue of sharing proprietary information among competitors,” says the report. “Overall stewardship of these resources is extremely practical to manufacturers seeking ways to trim costs, boost revenues, and reduce the risk of environmental non-compliance. Given this focus, resource management should become a strategic industrial interest.” This conclusion has value for a wide variety of stakeholders, including manufacturers, their service and supply allies, regulatory agencies, energy and water distribution utilities, and taxpayers.

The rationale looks like this:

The report offers a blueprint on how government and industry can partner to reduce their mutual costs of environmental regulation. “Industry’s voluntary benchmarking discipline can support industrial cost competitiveness, thus sustaining economic development,” says the authors.

The suggested steps for implementing this partnership are as follows:

1. Assemble a clearinghouse of technical assistance material related to industrial energy, water, and waste management. State and local chapters of professional engineering societies can help in organizing existing technical information. This kind of information is well-suited for Internet presentation. Similarly, regional networks of industry practitioners can partner with regulatory authorities to support a technical assistance agenda. This collaboration will cost government agencies little or nothing. It is in the professional societies’ interests to contribute to this activity.

2. Promote environmentally-sustainable economic development through a government-business communications partnership. Industry will respond better to an environmental agenda that communicates clear business value. The messenger is just as important as the message. Business leaders from forward-thinking companies need to “lend their faces” to this promotional effort, encouraging their peers to take action. Case studies can be used to illustrate success stories. Many recent waste minimization case studies exist. It will also be useful to generate local, “home grown” case studies and testimonials. Appendix A of this report presents Business Outcomes for Environmental Strategies.

3. Encourage the voluntary benchmarking of waste minimization and environmental compliance. Benchmarking of energy and water management practices should be a collaborative function, conducted by industry with state and university participation. Economic development is within the charter of most land-grant universities, which offer cutting-edge science and engineering knowledge with no commercial bias. State regulatory officials need to ensure that benchmarking activities contribute to environmental mitigation agendas, and that results are summarized for industry-wide benefit. Each industry participant bears a fraction of the cost of benchmarking. Therefore, the budgetary impact on individual companies and government agencies should be negligible.
   
   
4. Progressively adopt environmental benchmarking activities that help industry to meet regulatory obligations in a more cost-effective manner. Implementation of a voluntary benchmarking function does not have to happen all at once. It can be piloted for a single medium (air, water, or solid waste) and expanded with experience. In many cases, manufacturers can use their environmental compliance data to benchmark their waste efficiencies. Lessons learned from environmental benchmarking will bring value to industry through avoided waste, improved production capacity, and simplified, less-costly regulatory compliance. Neighboring states can and should collaborate in benchmarking efforts, since stronger industrial performance will benefit industry’s service and supply allies that are a valuable part of interstate economies. Regulators should leverage benchmarking data to simplify their compliance monitoring duties.