Archive for February, 2009

We are Penn State!–Paper!

February 28, 2009

We Penn Staters are loud and proud. Yes, the cheer really is We Are—Penn State! I have amended the traditional PSU cheer for a reason. The folks who purchase Penn State’s janitorial paper wanted to add a sustainability component to their next contract. Janitorial paper is bathroom tissue, paper towels, paper napkins, facial tissue, etc. They asked if a group of MBA students would be interested in developing a “sustainability scorecard” to help them do this. The result of this effort was a 1-credit “Sustainable Procurement Practicum” in the MBA program in the fall of 2008.

A long time professor at the University, Dr. Terry Harrison, taught the class. I happen to have had one if his courses (Quantitative Business Analysis) when I was at Penn State—so I know from personal experience that the result of this practicum was backed up by solid research. The students were mostly, but not all, members of an organization called Net Impact, which focuses on how business can strengthen communities and improve environmental stewardship (in addition to being profitable, of course).

The research included many items in addition to the specific sustainability criteria. These aspects included the current procurement process and general contract requirements, product performance, price, the experience of peer institutions, the best method for evaluating the actual sustainability dimensions of the products, and specific technical knowledge of how these products are manufactured. As an example of the complexity of the data, the final report identifies upwards of twenty different items that could have conceivably been on the scorecard.

At the end, the sustainability scorecard had 6 criteria: Pre/Post Consumer Recycled Content (with targets); Forest Certification (either Forest Stewardship Council, Sustainable Forestry Institute or both); Packaging Recycled Content; and various aspects of being chlorine free in the product manufacturing process. There were also very important usability considerations. With only 6 mostly numeric or yes/no criteria, it is easy for a supplier to input their specific information. Even more important, it is easy for the procurement folks to incorporate the results into their contracting decision.

In other words, the sustainability scorecard can and will be used. Sounds like a successful integration of sustainability into a regular business process to me. Makes me just a little bit happier I am a Penn Stater.

Also:
I want to thank Matthew Holtry, the president of the Penn State University chapter of Net Impact, for posting the practicum’s report on his LinkedIn profile, It is fascinating reading.

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More Chocolate Milk, Please!

February 20, 2009

I take my chocolate milk very seriously. This particular passion of mine began about a year and a half ago, when I happened to taste Natural By Nature organic chocolate milk from grass fed cows. I immediately commenced a search operation for this product in the Philadelphia metro area (Montgomery County, really) and came up empty. No Natural By Nature Chocolate Milk was available. However, I did find two other brands of organic (not just chocolate) milk—Organic Valley and Horizon Organic. So I more or less have 3 major organic milk options to choose from in the Philadelphia area.

The first entry is Organic Valley. My wife and I really enjoy the milk, and (full disclosure) own some shares of the stock. OV is essentially a network of regional organic producer pools—mostly dairy but not entirely. One of the requirements (aside from being organic, of course) to becoming part of a producer pool is to acquire stock (equity) in the company. In fact, ALL of the voting shares of the company’s board of directors are held by farmer/producers. So the farmers benefit from a combination of a steady higher than conventional price for their milk AND a dividend on the company stock (actually a good one). In fact, this dividend is higher for the farmers than for an outside investor like me.

Horizon Organic is the largest organic milk brand in the country. They are everywhere. They also pay their family farm producers more than the conventional pay price (higher than Organic Valley as well), BUT that is it—no equity component, and the profits ultimately flow upward to Dean Foods, a major agricultural conglomerate. They do provide financing to farmers who want to transition from conventional to organic (and of course, sell to Horizon). Since this can take up to 3 years, this can be a significant aid to a farmer looking to go organic.

Horizon’s website says that 80% of their production comes from family farms. Contributing to the other 20% is a 4,000 cow herd in Idaho. This is one of the reasons that you’ll find disagreement in the organic community about how “organic” Horizon truly is. Being owned by Dean Foods is another. On the other hand, Organic Valley had their own “factory farm” incident in Texas a year or so ago—apparently, they were buying milk from a large farm that they really should not have been. That is not happening anymore. It seems to have been a desire to fulfill Texas size market demand that led them temporarily astray. They’ve stopped, so I can forgive them.

The third entry around the Philadelphia area is Natural By Nature. They are a Lancaster County based cooperative. They are very small compared to Organic Valley and Horizon. They only use grass to feed their cows, which really helps the milk’s taste. I really do not know much about them, but I love their chocolate milk. I wish they made more of it and distributed it more widely. Buying that brand unquestionably keeps my money circulating pretty locally, and that is excellent. The milk probably travels less distance also.

Mirror, mirror on the wall, which brand should I buy?

Websites:

http://www.organicvalley.coop
http://www.horizonorganic.com
http://www.nationmaster.com/encyclopedia/Horizon-Organic
http://www.natural-by-nature.com/

Recycling Definitions: Theory and Practice

February 16, 2009

A key part of sustainability is recycling—that is, reduce, reuse, recycle. So when I think about recycling, it seems pretty straightforward to me. A good working definition of recycling can be found on http://www.dictionary.com. It says: “to treat or process (used or waste materials) so as to make suitable for reuse: recycling paper to save trees.” But sometimes, actual practice is more complicated than theoretical definitions.

Item 1. Post Consumer vs. Post Industrial. I recently researched environmentally friendly insulation. I found out that the major (fiberglass) insulation makers have some percentage of recycled glass in their batt insulation. Take 2 big names in the field: Owens Corning and Johns Manville. As of Nov. 2008, Owens Corning says that 40% of the glass in their fiberglass insulation is recycled. Johns Manville says that 25% of the glass in their product is recycled. So 40% beats 25% pretty easily, correct? Maybe.

But then I find out that the Johns Manville is 20% post consumer and 5% post industrial, while the Owens Corning is 10% post consumer and 30% post industrial. Post consumer really means it comes from from a end-user application (examples—office supplies or a soda bottle) and thereby avoids a landfill. Post industrial means the waste from one industrial process goes to another manufacturing process in a different industry. The post consumer sounds environmentally better to me. The LEED green building standards think so also, since they essentially award double credit for post consumer vs post industrial. So Johns Manville gets 20+20+5 = 45 points, Owens Corning gets 10+10+30 = 50 points. Who “recycles” more glass in their insulation? (Both of these products have been certified for recycled content for building products/insulation by Scientific Certification Systems at http://www.scscertified.com/ecoproducts.)

Item 2. The Great Recycling Recession. A friend of mine has a print shop (Homer Printing) in the Philadelphia area. He used to be able to sell his recyclable paper for $40/ton. Then he got a letter from his recycling contact that the price had fallen from $40 to somewhere near zero, but they would still take it. He has since gotten a letter saying he now has to pay $30/ton to have the recyclable paper taken away. It could be worse—he could pay somewhere around $65/ton to ship it to a landfill. This is a powerful reminder that it is only possible to reduce, reuse, and recycle if someone else wants the product(s) you want to recycle.

But life isn’t all bad—the napkin I got from Dunkin Donuts this morning is made from 100% recycled fiber. I think that means that no trees were cut down to create the fiber for the paper in the napkin—but there might be more to this than meets the eye.

Website used in this post:
LEED standards—New Buildings version 2.2
http://www.usgbc.org/DisplayPage.aspx?CMSPageID=220

Now Available—the 2007 Census of Agriculture–With Organics!

February 9, 2009

The official count of the population of the United States is the census held every 10 years—the next one will be in 2010. Certain industries, like Agriculture, get their own census every 5 years. Last week (February 4th, 2009) the National Agricultural Statistics Service (housed in the US Dept of Agriculture) released the results of the 2007 Census of Agriculture—a.k.a. the Ag Census. I was most interested in the fact that Organic Agriculture was specifically included in the Ag Census for the first time.

This includes both “farms with organic acreage” (20,437) as well as farms with “organic product sales” (18,437). Since I was talking to the USDA rep at a conference of the Pennsylvania Association for Sustainable Agriculture (2,000 attendees and counting), he also provided a Pennsylvania summary. Pennsylvania (my home state) has 680 farms selling organic product, for $58.3 million in sales volume. There are an additional 95 farms in Pennsylvania counted as “having organic acreage” but not necessarily selling organic product.

In summary, Pennsylvania is about 3.5% of organic farms and organic sales volume in the United States. It is also the 5th largest state in terms of organic (agricultural) sales. A couple of other interesting tidbits grabbed my attention. Pennsylvania had 45,181 acres in organic production with another 14,346 acres being converted to organic production. The only states ahead of Pennsylvania are California, Washington, Oregon, and Wisconsin. Somewhat surprisingly, New York is in 6th place, behind Pennsylvania. Pennsylvania also has 379 farms marketing via a Community Supported Agriculture (CSA) arrangement.

This (Agricultural) Census is interesting stuff, but who uses it? The answer, literally, is almost everyone. When I was doing market research in my prior life, my office considered Census data the gold standard. For the information it collected, there was simply no more authoritative source. As the Ag Census website says: It is the only source of uniform, comprehensive agricultural data for every state and county in the United States. http://www.agcensus.usda.gov/ (emphasis added from the About the Census section.) The country’s leading authority for agricultural production statistics now includes organics. Organics is now officially at the agricultural table.

This is Myron Cope on….Sustainability?

February 4, 2009

The proper tag line was “This is Myron Cope on sports”. Yesterday’s victory by the Pittsburgh Steelers in Super Bowl XLIII was accompanied by a huge number of Terrible Towels—that is, Myron Cope’s Official Terrible Towel. Myron Cope was a very famous Pittsburgh sportscaster. The Terrible Towel was originally a gimmick to support the Steelers football team, but it has grown into much more than that, way beyond the scope of this blog. While the Terrible Towel has a football purpose, it can also be viewed through a prism of sustainability. This is primarily because of Cope’s generosity.

In the mid-1990s, Cope donated the trademark for the Terrible Towel to the Allegheny Valley School. This is a program for developmentally disabled individuals. (Cope’s son Danny lives there). Since 1996, the Allegheny Valley School has received about $2.5 million as the trademark owner of the Terrible Towel. But the story goes even further than that.

A Wisconsin company (McArthur Towel and Sport) makes the towels. McArthur subcontracts out part of its production process to Chippewa River Industries (CRI). CRI does the dyeing and printing, as well as the packaging. CRI in turn has a mission to “assist people with disabilities or other barriers, to achieve vocational and economic independence through employment that is consistent with their abilities, interests, and needs.” (www.crind.org) So developmentally disabled folks in both Pittsburgh and Wisconsin benefit from the collective purchases of the Terrible Towel. It is truly a wonderful legacy, to borrow from the headline from the Jan 30th New York Times.

Let’s take a step back and think about this story from a sustainability perspective. Remember that while sustainability is often thought of in environmental terms, it also has product process transparency and community building aspects as well. First, the mere fact we can trace back this product to the manufacturer is a lesson we can apply to other products. We learned not about the material in the towels themselves, but more about the money flows. Second, we now have a direct connection to some of the workers who make our Towel possible. (Hopefully they are getting a decent wage). Third, we understand that the owners of this product (Allegheny) are truly giving back to their local community, in a way that would not otherwise be possible. We learned that the purchase of the Terrible Towel has real impacts on real people beyond the Steelers organization and its fans.

And that is a lot of what sustainability is all about. Our purchases can have impacts beyond ourselves, even on a $7.95 Terrible Towel. These impacts can be broader than the environmental, but can impact communities and localities as well. As Myron Cope impacted his community with his decision (to donate his trademark), we can impact many communities and environments with our (purchase) decisions.


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