Carbon regulation in the United States may be months, if not years, away. In countries such as China, who knows if they'll ever materialize? Yet companies that see no reason to make their products and practices Earth-friendlier for the sake of complying with future environmental regulations are moving greenward to meet more immediate, business-oriented reasons: meeting the demands of large customers such as Verizon, HP, and the federal government.
Yes, private and public organizations alike continue to apply pressure to suppliers to make products that are greener, which might mean wares that are more energy efficient or contain fewer hazardous materials. On top of that, some companies pressure their suppliers to embrace overall greener business practices, from how they use natural resources to how they package and deliver shipments.
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Among the more recent examples of this trend comes from Verizon. Earlier this year, the company decreed that come July 2010, all of its network-hardware suppliers must use thermal modeling when designing circuit boards and cabinets used in network gear. The goal is "to minimize heat generation that impairs equipment performance and requires costly air conditioning in central offices, equipment vaults and other facilities."
Thermal modeling involves simulating the heat flow around electrical components in equipment before the equipment is built, with the end result of minimizing heat generation. Verizon's move is intended to help the company achieve its own sustainable objectives of cutting carbon emissions (not to mention saving money) by slashing energy usage. It ties in with a practice the company adopted at the beginning of 2009: It only purchases new networking equipment that operates at 20 percent higher efficiency than the equipment it replaces.
"The new thermal-management requirements are actually a process for helping the equipment makers meet the 20 percent improvement goal, which then helps Verizon reduce its energy consumption and carbon footprint significantly," said Chuck Graff, Verizon director of corporate network and technology. "Circuit boards can work fine when they are generating more heat than necessary, but they work better and save operating costs when you pay attention to heat issues up front. That's the goal here."
Verizon certainly isn't alone here. Tech heavyweights such as HP, IBM, Xerox, and Dell have saddled suppliers with various environmental requirements pertaining to cutting energy consumption, conserving water, and responsibly disposing of e-waste. Wal-Mart, too, made headlines a while back when it announced it would work to track and reduce the energy consumed and carbon emissions produced by its suppliers.
Hardware suppliers also have to continually hone their products to meet rigorous demands of government clients. The federal government, as well as some state and city governments, require agencies and departments to purchase only end-user hardware that meets EPEAT criteria.
This trend will undoubtedly continue into 2010 and beyond. As companies strive to embrace greener practices, whether for the sake of cutting costs or doing their part to reduce GHGs, they'll apply greater pressure on suppliers to help achieve those goals. The benefits to the purchasing companies are evident: They get to meet environmental objectives while saving on operating expenses. Those benefits will reach other organizations as green features -- for example, high-efficiency power supplies -- become the norm, rather than premiums you have to pay extra for.
As for the suppliers who bear the burden of meeting these various demands, which require upfront investments in research and development, new inventory, training, and tools for measuring carbon emissions, well, they have their work cut out for them. But that's the nature of the business world: Either you evolve or you face extinction. The companies that evolve -- those that embrace the greener business practices (which tend to translate to cutting costs) and that develop the greener products -- are the ones that will thrive. Those that can't -- or won't -- do it, well, they may just fail.
The bottom line here: Companies that are resting on their laurels waiting for the feds to roll out carbon regulations and other environmental laws before they take any action should talk to their customers and competitors. Plenty of customers are already expecting greener products and practices, whether to meet internal CSR or cost-cutting objectives or to suit the requirements of customers further up the supply chain. Further, your competitors could very well be ahead of the game, benefitting from more business and lower long-term operating expenses from embracing greener practices.