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How To Grow Your Business Green, Woodbridge Bizmania October 2009

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Two business leaders share the financial upside of their journeys to corporate sustainability. Government representative shares how NJ businesses and residences can get government subsidies for energy …

Two business leaders share the financial upside of their journeys to corporate sustainability. Government representative shares how NJ businesses and residences can get government subsidies for energy conservation and efficiency expenditures.

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  • 1. How To Grow Your Business GREEN! Woodbridge Bizmania 2009 Moderator: Victoria Zelin, Hudson Gain Panelists: Dave Kitts, Mannington Kevin Tubbs, Ingersoll Rand Ron Maslo, NJ Clean Energy Five Penn Plaza, 23rd Floor, New York, NY 10001 Phone 212.835.1601 www.hudsongain.com Copyright ©2009 Hudson Gain Corporation
  • 2. Sustainability: The Triple Bottom Line “Meeting the needs of the present without compromising the ability People Planet of future generations to sustainable employee sustainable resources and customer base and operating environment meet their own needs.” Brundtland Commission (1987) Profits sustainable business increased present value 2
  • 3. Why Green Your Business? Regulation Competition – Transparency Stakeholder demands – Supply Chain Recruiting – Retention Cut energy costs – Waste Government Incentives THE BOTTOM LINE: It’s good business sense, short and long-term! 3
  • 4. Green Outperforms the Market “According to a recent study by A.T. Kearney, 99 sustainability-focused companies* … outperformed the broader market by an average of 10 percent from September to November 2008, and by 15 percent from May to November.” Daniel Mahler, Ph.D., Partner, A.T. Kearney *selectedfor being on either the Dow Jones Sustainability Index or the Goldman Sachs SUSTAIN focus list, or both 4
  • 5. Hudson Gain’s Evolution to Green Talent Talent Acquisition Development Sustainable Leadership 5
  • 6. Sustainability Leadership Going Green? Don't Hire a Sustainability Chief Until You Read This Study! The Role of the Chief Sustainability Officer (CSO) in Corporations 6
  • 7. How Do You Green Your Business? Assess, then prioritize based on your strategy Build the business case Plan, set goals and accountabilities Consider extending ROI timelines Grow your people in the process Measure and celebrate Get professional help if or as needed There’s NO ONE-SIZE fits all 7
  • 8. Victoria Zelin SVP & Sustainability Practice Leader Hudson Gain Corporation 908.306.0272 victoria.zelin@ hudsongain.com Copyright ©2009 Hudson Gain Corporation 8
  • 9. Dave Kitts VP – Environment October 5, 2009
  • 10. Green Tsunami
  • 11. Chris Jordan Contemporary artist – Seattle, WA
  • 12. 106,000 aluminum cans every 60 seconds
  • 13. 2,000,000 plastic bottles every 5 minutes
  • 14. 11,000 jet trails every 8 hours
  • 15. 38,000 shipping containers every 12 hours
  • 16. Limits to Growth Growing population Intensive resource usage Limited resource stocks Fragile ecosystems Unsustainable consumption trends(!) Two planets needed by 2050? (UNEP)
  • 17. Family-Owned Flooring Business Operating > 94 years >2,000 employees - 700 in NJ 7 U.S. manufacturing sites – Resilient & HQ’s in New Jersey – Carpet in Georgia – Laminate in North Carolina – Wood in North Carolina and Alabama – Rubber in California & Florida – Tile joint venture in Texas
  • 18. WASTEFUL BUILDINGS - USA 20,000 landfills - >15,000 reached limit & closed 40% of landfill content is construction waste Construction waste equals municipal garbage
  • 19. USGBC Active Member since 1998
  • 20. Perception
  • 21. The LEED Rating Systems NC EB: O&M CI New Construction Existing Buildings: Operations & Major Renovations and Maintenance Commercial Interiors 2000* 2004* 2004* CS Schools H Core and Shell Homes 2006* 2007* 2008* * Year rating system first implemented.
  • 22. *As of April 2009, over 5 billion square feet of commercial building space is involved with the LEED green building certification system.
  • 23. 12 36 190 LEED ADOPTIONS
  • 24. Environmental Improvement Operations… “how we build it matters” Products/Services… “what we build matters” Communications… “what we say matters”
  • 25. ‘Big 3’ Environmental Metrics (per yards produced) 2007 vs. 2008 Solid Waste 14% Energy 5% Water 14%
  • 26. Net user of waste Waste in 1 Waste out
  • 27. Net User of Waste 2001 200 200 200 200 200 200 2008 2009 2 3 4 5 6 7 (1-6) Calhoun 0.94 0.71 1.3 2.1 3.5 5.5 8.7 4.6 2.3 Salem 0.48 0.24 0.28 0.3 0.17 0.16 0.22 0.47 1.5 Combined 0.51 0.29 0.36 0.43 0.45 0.55 0.83 1.3 1.8
  • 28. waste in >10,000,000 pounds – 2007 (ie >5,000 tons) >12,700,000 pounds – 2008 (ie >6,300 tons) >8,000,000 pounds – 1st ½ 2009 (ie >4,000 tons)
  • 29. X 1270
  • 30. Operations ISO 14001 (E) & ISO 9001 (Q)
  • 31. Infinity RE recycled content backing
  • 32. Relay RE 35% recycled content
  • 33. Premium Tile-25% RC
  • 34. Annual Tile Recycling 6,000,000 lbs – 2009 >10,000,000 lbs predicted - 2010
  • 35. X 600
  • 36. >400 tons recycled (since started, late 2006)
  • 37. IAQ LEED Build green. Everyone Profits
  • 38. NSF 140 Sustainable Carpet Assessment Standard Safe for Public Health & Environment Renewable Energy & Energy Efficiency Material, Biobased or Recycled Facility or Company Based Reclamation, Sustainable Reuse & End of Life Mgt. (total of 113 available points)
  • 39. NSF 332 Sustainable Product Standard – Resilient Flooring Informed Product Design Intelligent Product Manufacturing Long – Term Value Progressive Corporate Governance (total of 99 available points)
  • 40. ACTIONS SPEAK
  • 41. The Business Case for Sustainability At Ingersoll Rand Bizmania October 5, 2009 Kevin R. Tubbs
  • 42. Business overview Ingersoll Rand – $ 17 billion company – 64,000 employees – Products and services in nearly 200 countries – Over 100 manufacturing facilities worldwide – In 2008 was named to the Dow Jones Sustainability North America Index and included on seven KLD socially responsible investment indexes. Trane, a business of Ingersoll Rand – Leading global provider of integrated HVAC systems, services and solutions – 29,000 employees – 29 manufacturing facilities worldwide 74 Bizmania – October 5, 2009
  • 43. Sustainability at Ingersoll Rand Triple bottom line • We communicate the company's "triple bottom line" business strategy as Green, Giving, Growing. Collectively, these three elements are essential to operating a responsible business. Environmental Social Economic Stewardship Responsibility Prosperity Green Giving Growing Reducing our own “Inspiring Progress” Positioning environmental footprint Award recognizing Ingersoll Rand as the employee action industry-leading provider of green solutions 75 Bizmania – October 5, 2009
  • 44. Expanding to sustainability reporting • IR published environmental, health and safety (EHS) reports in 2004, 2005, and 2006 • Trane published Corporate Citizenship Reports for 2004 through 2006 • 2007 annual report introduction • 2007 sustainability report – expansion of our previous EHS reports; covers our economic, environmental and social performance 76 Bizmania – October 5, 2009
  • 45. Drivers for Change – Tyler, TX. • Tyler Plant produces residential air conditioning systems • Business landscape: – Expiration of five year fixed price electrical contract – Rising energy cost +70% on $4M spend – Dramatic downturn in housing market Ingersoll Rand acquires Trane – June, 2008 – Corporate goal of 15% normalized reduction in manufacturing energy use by 2013 77 Bizmania – October 5, 2009
  • 46. Facilities & Infrastructure • Campus style facility; Total 1.1 million square feet, 700KSF manufacturing / test, balance Engineering, offices & warehouse • • 100PSI & 400PSI Compressor Dry Air (CDA) Systems; 5,000 SCFM total demand @ -40F DP • Four 900 Ton Trane Centrifugal Chillers running in series / parallel, operating at 380F Comfort cooling in manufacturing area • 2400 Ton Process Cooling Tower Water System • 1-600 HP & 1-35 HP gas fired boiler • • Mix of HID lighting, T12, T8 & T5 fluorescents 78 Bizmania – October 5, 2009
  • 47. Internal case study • Trane’s largest production facility in Tyler, Texas, headquarters of residential systems business • Energy team developed a phased plan that is expected to yield $1.1 million in annual savings • Approach currently being used at two additional Ingersoll Rand locations, with a goal of six locations in 2009 • Policy & Deployment • Energy Efficiency Projects • Management / factory awareness • Equipment / systems efficiency • Electrical sub-metering • Production methods • Ownership of results and empowerment • Waste minimization, leaks and losses • Metrics, monitoring and reporting • Focused investment • Energy Conservation Measures • Pricing Strategies • Behavior changes • Supply / rate management • Off / on controls nights / weekends • Demand management • Basic operations and maintenance • Off-peak load shifting • “Low hanging fruit” projects 79 Bizmania – October 5, 2009
  • 48. Tyler Weekend Electrical Cost Avoidance 350,000 300,000 250,000 200,000 150,000 100,000 Early Success Easter 2008 50,000 0 2007 kWh 2008 kWh 80 Bizmania – October 5, 2009
  • 49. Project Summary • Multiple Benefits are being achieved: – Increased Employee Engagement – Significant decrease in Greenhouse Gas Emissions – Use of remote monitoring and engineering support to reduce cost and “hold the gains” – Delivering better than expected raw cost avoidance ($480,000 in calendar year 2008) • Total Projected Costs: Approximately $1.8 M • Projected Annual Savings: Approximately $1.1 M 81 Bizmania – October 5, 2009
  • 50. Serving Customers Business value of sustainability • Ingersoll Rand has the most LEED-accredited engineers of any company. We use that expertise to help our customers and, increasingly, to help our own facilities achieve green building status. • It’s also one of only four energy service companies asked to participate in the Clinton Climate Initiative (CCI). • In 2007, Trane’s CenTraVac™ chilled water system won the prestigious “Best-of-the-Best” Award from the U.S. Environmental Protection Agency for its contributions to strategic ozone protection. It is the most energy efficient system available for large buildings. 82 Bizmania – October 5, 2009
  • 51. Ingersoll Rand and Trane help buildings go green by: • Designing and engineering green buildings – TRACE™ 700 is the complete design tool for load, system, energy and economic analysis, and is recommended by the USGBC to receive LEED points • Constructing green buildings – EarthWise™ systems use state-of-the-art Trane products, systems and controls to optimize performance. • Operating and controlling green buildings – Tracer Summit™ controls give advanced control of complex systems to achieve energy savings and measure performance. 83 Bizmania – October 5, 2009
  • 52. Energy efficiency curriculum • Trane’s BTU Crew educational program teaches energy awareness and conservation measures for buildings and offers students the opportunity to conduct comprehensive energy audits as they explore career opportunities that harness their interests in science, technology, engineering and math careers. • Program elements also incorporated in Girl Scouts of the USA’s national energy journey for Girl Scout Juniors 84 Bizmania – October 5, 2009
  • 53. Hussmann provides innovative green solutions for retail food industry 85 Bizmania – October 5, 2009
  • 54. Sustainable Practices Bring Recognition • USEPA Best of the Best Stratospheric Ozone Protection Award • KLD Indexes 86 Bizmania – October 5, 2009
  • 55. Thank you! 87 Bizmania – October 5, 2009
  • 56. A NEW JERSEY PERSPECTIVE On Energy Saving Incentives
  • 57. m Program Market Manager: TRC Energy Services, Inc. 900 Route 9 North, Suite 104 Woodbridge, NJ, 07095 Presenter: 732-855-0033 Dr. Ron Maslo, P.E. Project Manager 732-996-2762 (Cell) 732-556-9190 (Office)
  • 58. NJ Clean Energy Program • Introduced March 9, 2001, as part of the Electric Discount and Energy Competition Act, N.J.S.A. 48:3-49 et. Seq, February 9, 1999. • Funding comes from “Societal Benefits” or “SBC” Charge on Utility bill, N.J.S.A. 48:3-60(a)(3). • Provisions for Commercial & Industrial projects, Residential Projects, and Renewable Energy projects • New construction projects must be in designated Smart Growth areas to be eligible for incentives. • Refer to the Program Guide found at www.njcleanenergy.com/ssb under “Quick Start”
  • 59. Why Energy-Efficiency Programs? • Save energy and money by reducing the demand for energy • Protect the environment – Less emissions – Cleaner air • “Transform” the Market Place – change behaviors - think high efficiency first – encourage sustainable practices
  • 60. OWNERSHIP COST SUMMARY (40-year building life cycle approximation) Alteration Operating & Costs Maintenance 25% Costs 50% 14% Financing Front-end 11% decisions result in long range impact Construction
  • 61. Who Can Participate? All New Jersey C&I Electric and Gas customers (who pay Societal Benefits, i.e., not served by municipal utility) Opportunities for all size and type projects: – New construction (new buildings & additions) – Major renovation (gut-rehabilitations) – Equipment replacement
  • 62. Incentives Available For: • Design Assistance Grants • Pre-Qualified Equipment • Custom Measures with energy-saving potential • Cost-sharing for Studies & Commissioning
  • 63. Design Assistance Grants • Comprehensive Design Support – At conceptual design stage of construction project – For Facilities of 50,000 Square Feet and Larger • OR HVAC > 150 tons and Demand > 75kW – Brainstorming: $1,000 grant – Energy Modeling: $5000 minimum – Incremental design incentive: up to $5,000 • Modified Design Support – Design substantially complete, but before bidding – Goal to re-consider energy saving potential – Up to $5,000 on case-by-case basis
  • 64. Pre-Approved Technologies – Electric Chillers – Variable Frequency Drives ... ($8 to $170 / ton) ($60 to $155 / HP) – Natural Gas Cooling – NEMA Premium Motors - 1 to ($185 to $450 / ton) 200 hp ($45 to $700 / motor) – Electric Unitary HVAC Systems .. ($40 to $92 / ton) – Prescriptive & Performance – Ground Source Heat Pumps Lighting ($10 to $284 / fixture) ($370/ton) – Lighting Controls – Gas Heating ($300 minimum / ($20 to $75 / unit) furnace or boiler) & DHW Heating ($50 minimum / heater)
  • 65. Custom Electric and/or Gas Projects • Opportunities for non-pre-qualified technologies • Submit Custom Equipment applications and custom project data sheet estimating: 1. Savings over established “base-line”, for example, 20 kW minimum demand reduction or 25,000 kWh saved per yr. or 10 to 15 % Gas Savings 2. Life-cycle costs vs. life-cycle savings • If project qualifies: (Benefit/Cost Ratio >1.0, Payback > 24 months Incentive equals $0.16 per Kwh/yr or $1.60 per Therm saved.
  • 66. Other Ways to Participate • Multiple Measures Bonus (up to 10% extra) For projects with lighting and non-lighting incentives or 2 non-lighting incentives, if lighting previously upgraded • Building Commissioning (CX) For K-12 public schools only (at least 50,000 s.f. in area) Must follow Comprehensive Design Path 50% of Commissioning Agent fee to $30,000 maximum
  • 67. NJ SmartStart Buildings Rules • Send to TRC Energy Services (Market Manager): - Application & Worksheet (if applicable) - Copies of latest Utility Bills and W-9 form - Equipment Manufacturer Technical Data Sheets • You must receive TRC’s approval letter prior to the removal of existing, or installation of new, equipment - When incentives > $5,000 for HVAC or motors - For all other energy-efficiency measures (EEMs) • Install in accordance with the “approval letter” within the specified time frame
  • 68. NJ SmartStart Rules (continued) • Submit “proof-of-purchase” documentation and tax clearance certificate. Incentive will be the lesser of: Approved program incentive amount Actual equipment cost of the EEM • Allow 60 days for delivery of incentive after submission of all required documentation. • The NJBPU reserves the right to cap incentives at $500,000 per utility account per calendar year. • Budget for 2009: $51.59M (Includes P4P CHP)
  • 69. New Incentives for 2009 • Direct Install Program • Pay For Performance Program • TEACH Energy Education Program • Local Government Energy Audit Program
  • 70. Direct Install • Retro-fit Program for facilities with an average peak demand <200 kW. • Incentives and education are to encourage early replacement of eligible, energy consuming equipment. • Provides for direct installation by pre-qualified contractors. Incentives are paid directly to the contractor. • Qualifying Users are eligible for incentives up to 80% of installed cost of approved projects. • User pays contractor remaining 20%. • Budget for 2009 ~ $10.2 M ... back
  • 71. Pay For Performance • For facilities with an average peak demand of > 200 kW. • Incentives are based on analysis & simulation and are linked directly to energy savings, with a 15% reduction as the minimum goal, Lighting cannot exceed 50% of projected savings. • Three milestone payments: 1) Submittal of Energy Reduction Plan – Incentives are Contingent on moving forward and are based on $0.10 / sq ft and range from $5K to $50K max ( not to exceed 50% of annual energy expense). 2) Installation of all Recommended Energy Saving Measures – Incentives equal 60% of total Performance Based incentive. 3) Completion Benchmarking Report - Final incentive equals remaining 40% of total Performance Based incentive. • Incentive is capped at $1M / utility meter and $2M / facility. Doubled for Hospitals, Non-Profits, Universities and Gov’t Facilities • Payment 1 cannot exceed 50% of annual energy cost. • Combined Payments 2 & 3 cannot exceed 50% of Project Cost • EPA Portfolio Manager or LEED EB may be followed to validate savings, along with post Retrofit billing data. • Budget for 2009 ~$23.2M
  • 72. Teach - Energy Education Program (Teaching Energy Awareness with Children’s Help) • An educational, practical program for approximately 100 K – 12 Public Schools in 6 to 9 Districts. • Schools to be Selected by State of NJ based on building characteristics • Requires 24 months of energy consumption data to serve as baseline for comparison of savings versus baseline. • Will entail modeling of facility to establish a base condition and to identify energy saving alternatives. • Will allow administrators to see how their schools are performing against a local and national sample. • Provide energy efficiency educational programs for the students and training of the faculty to teach these programs. • Budget for 2009: $796K
  • 73. Local Government Energy Audit Program • Program to audit municipal/county government facilities & NJ State Colleges and State Universities and to determine energy saving measures. • Agency submits information to TRC and requests proposal for an energy audit from contractor on approved NJ Dept of Treasury list. • Agency pays 25% of audit fee - if recommended upgrades are installed, equivalent in amount to the 25% fee, the 25% fee is refunded to Agency. • Agency participating is eligible for upgrade equipment installation through the Smart Start Program or the Direct Install Program (3Q009). • Incentive Caps Based on Sq Ft of Facility: – <750K SF $100K/Yr – >750K SF, <1,500K SF $150K/Yr – >1,500 SF, < 2,000K SF $200K/Yr – >2,000K SF $300K/Yr • Total 2009 Funding ~ $13.3M
  • 74. For More Information • Commercial & Industrial Market Manager TRC Energy Services, Inc. (732) 855-0033 • Marketing Outreach - EAM Associates, Inc. Dr. Ron Maslo, P.E. (732) 996-2762 rmaslo@eamenergy.com
  • 75. Questions? Five Penn Plaza, 23rd Floor, New York, NY 10001 Phone 212.835.1601 www.hudsongain.com Copyright ©2009 Hudson Gain Corporation
  • 76. How Do You Green Your Business? Assess, then prioritize based on your strategy Build the business case Plan, set goals and accountabilities Consider extending ROI timelines Grow your people in the process Measure and celebrate Get professional help if or as needed There’s NO ONE-SIZE fits all 108