U.S. Military Is Set to Save Big Bucks with Green Practices

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The Department of Defense is going green! If Uncle Sam recognizes the value of reducing the carbon footprint of the United States armed forces, it only makes sense that doing the same can result in similar benefits for businesses both large and small.

The potential savings for a military in the midst of a budget crisis are staggering.  The DOD is our country’s largest single consumer of energy, using more than 300,000 barrels of oil per day and generating annual energy bills that reach into the tens of billions of dollars. An armored Humvee on patrol in Afghanistan averages only four miles per gallon, and experts estimate it costs nearly $400 per gallon to supply fuel to our troops. Talk about sticker shock at the gas pump! And how would you like to get this utility bill? According to a former military senior logistician in Iraq, American taxpayers spend nearly $66 million per day to air-condition our war zones using fossil fuels. Amazing!

Fortunately, the military has set a goal to achieve 25% renewable energy by 2025. Some of their initiatives include portable solar power units at military installations, purification of stagnant water, solar tents, LED lights, and a new fleet of clean-energy naval vessels that have been dubbed the “Prius of the oceans.”

Last year, DOD teamed up with the Department of Energy in an effort to jump-start a broader commercial adoption of green technologies. By joining forces, the two agencies hope to stimulate the development of emerging carbon-friendly practices and demonstrate their value and practicality to potential users around the world.

It will be interesting to follow the military’s progress as it implements new eco-friendly practices. During tough economic times such as these, everyone is looking to save money. I’m predicting that when some CEOs out there see the impressive savings that DOD racks up by reducing their oversized carbon footprint, they will be looking at their own operations and wanting to make some changes of their own.

Why Should Organizations Measure Their Carbon Footprint?

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Just as children are told they need to eat their vegetables, companies today are hearing a growing chorus advising of the need to measure their carbon footprint. But why? What are the benefits of doing so? Do the savings really justify the effort?

Consider the company you would be keeping. Some of America’s largest organizations measure their carbon footprints, including Wal-Mart, Coca Cola, Intuit and the Department of Defense. Thousands more are realizing the advantages and jumping on the carbon accounting bandwagon. Some are compelled to do so by EPA regulations or the demands of shareholders, while others are motivated by the very real benefits of associated branding and public relations factors.

For the majority, however, it’s a matter of money. Carbon accounting is about more than just protecting the environment. It is a key element in helping any modern business grow and be successful. Organizations already track their health and profitability across a range of key metrics. Carbon accounting is a vital – yet often overlooked – indicator that can dramatically impact a company’s profit and efficiency. By studying the value chain of a business – the process by which it buys, produces and sells – one can determine the inefficiencies in the process and make changes that can result in significant savings in costs, time and manpower.

Carbon accounting can also lead to exciting new business opportunities. For example, as a part of its own carbon initiative, Wal-Mart now requires its vendors to study their carbon footprint. Many government projects have similar mandates in place for eligible contractors. Even the Dow Jones Index recognizes the value of eco-friendly business practices with its Sustainability Index that tracks the performance of the world’s leaders in sustainability.

What gets measured gets managed. It’s that simple. In today’s economy, businesses need to take advantage of every opportunity to enhance efficiency, manage risks, increase sales and improve their bottom line. Measuring one’s carbon footprint is an important step in that direction.

Do you care about the carbon footprint of your potato chips?

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You sit down to watch the big game, tear open a bag of potato chips to munch on and notice a carbon footprint label on the bag. There’s never been a label like this before. You’re suddenly mortified! You had no idea that the production of a simple, small bag of potato chips emitted so much carbon (because you have a very good idea of what a reasonable carbon footprint of potato chips should be of course). You turn off the game and speed to the supermarket to shop for a bag of chips that falls within your pre-established, acceptable carbon emission range for a product of that type. Maybe a potato chip company purchases carbon credits to offset their potato chip footprint to
zero. Dare to dream.

Okay. Let’s assume you’re not a diehard environmentalist. The big question is the degree to which a carbon footprint label on a product will influence your decision to purchase certain products, if at all. What will your reaction be if you’re an average US consumer? It’s a question on the minds of many marketers. Will carbon footprint labels offer a competitive advantage for a product? Will consumers pay a premium for what they perceive as a socially responsible product? Fortunately, US businesses have some data to analyze before diving in head first.

Carbon footprint labels have been showing up on products in Europe for the last few years.  France may enact legislation as early as 2012 requiring some form of carbon labeling  on products. There have been mixed reviews on the impact that it has had on
consumer behavior and whether the cost of calculating the carbon label justifies
the benefits. There have also been questions surrounding the accuracy of such
measurements and inconsistencies in the standards used. Then there is the fact
that there is no clear answer on what an acceptable carbon footprint is for a
product. Consumers have no frame of reference by which to judge the
information. There’s no “recommended daily allowance” that has been published
for carbon emissions.

There is clearly a lot more work that needs to be done to  make carbon labeling a metric that consumers can understand and trust. The US Nutrition Labeling and Education Act of 1990 requires all food to have nutritional information labeled on the product. Since 1990, there have been changes to labeling requirements to give consumers more transparency and the  FDA continues to recommend additional changes. It is likely that carbon  labeling will follow the same course and evolve over time to provide
information that consumers want. In fact, consumers may be interested in more
than just the carbon footprint of a product. Goodguide is a company that rates
products on a scale of one to ten based on how they impact the consumer’s
health, environment and society in general. It is more of an overall
sustainability rating than one geared towards carbon alone. This type of rating
system may trump the carbon label while not excluding it from the equation.

US consumers have already seen the claims on product  packages regarding the commitments of the companies to the environment and sustainability. However, we are likely to see these reported claims quantified with  recognized standards and verified by third parties as companies seek to avoid being grouped into the “greenwashing” category. For companies looking for a  competitive edge, this is a huge opportunity. For consumers who are less than  overwhelmed by their country’s leadership on environmental issues, this is a chance to sidestep the bureaucracy and send a message to US companies. Money  talks and private enterprise has a way of getting things done.