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Turning Factories Green

Beauty firms are moving toward eco-conscious production and shrinking their carbon footprint with wind and solar energy.

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Beauty Inc issue 08/10/2007

Beauty firms are moving toward eco-conscious production and shrinking their carbon footprint with wind and solar energy.

This story first appeared in the August 10, 2007 issue of WWD.  Subscribe Today.

Credit Al Gore’s An Inconvenient Truth or a vocal cast of high-profile greenies. Regardless of the source, the beauty industry has begun to heed the call of environmentalism. For beauty firms, many of which rely on botanicals as a main ingredient source, an
obvious place to start is the large manufacturing plants that churn out their myriad creams
and cosmetics.

Popular eco-friendly tactics for production include the purchase of wind power credits, sun-tracking solar panels and motion-activated lights. For some companies, it’s an effort that begins with baby steps such as installing energy-­efficient lightbulbs. For others, it’s the foundation of their existence.

Some 70 years ago, a physician named Rudolf Hauschka decreed that entrepreneurial activity should serve mankind and the earth, rather than simply generate a profit, recalls Mirran Raphaely, chief executive officer of Dr.Hauschka Skin Care. Today, the company uses water power as the sole energy source for carbon-free production of its line. It also curbs energy consumption and pollution by giving preference to local suppliers of raw materials.

Prompted by a similar philosophy, Joshua Onysko of Boulder, Colorado founded his own ecocentric body care line, called Pangea Organics. The beauty firm has given rise to the Pangea Institute, a nonprofit consulting firm that works with companies from various industries on how to best implement environmentally-friendly business practices. In Onysko’s view, “The true path to green is from the roots up” and ought to be outlined in a company’s mission statement. He frowns on the practice of “green-washing,” where a company markets itself as green solely on the basis that it purchases wind energy credits to offset its carbon output.

The ceo estimates that transportation for sourcing and shipping generally accounts for 80 percent of a company’s energy usage. “Energy use is a rabbit hole—it keeps going down and down and down,” says Onysko, who has called himself an environmentalist since he was 14 years old. “I’ve traveled in developing countries, where most of the manufacturing for U.S. products is done.” In such outposts, he recalls, one can’t escape the impact of toxic waste because it often ends up on the streets, as opposed to here, where it’s carted off to a landfill miles away.

Most beauty firms, as it turns out, are well-intentioned corporate citizens who fall somewhere between being “roots up” and “green washing” companies.  

Collective Wellbeing, a natural beauty and personal care brand, has steadily worked to move in a green, eco-friendly direction. Its efforts have included replacing corrugated boxes with a thin, plastic film for shipping, relocating to a more energy-efficient manufacturing and distribution center that has reduced energy usage by 20 percent and, most recently, joining the Chicago Climate Exchange, the first greenhouse gas registry, reduction and trading system. Collective Wellbeing’s associate membership status mandates that the company is legally bound to offset all of its greenhouse gas emissions for the next three years. It can do that by purchasing carbon offsets available for sale on CCX’s trading platform from other members’ reductions—including Ford Motor Company and Amtrak—or alternative energy providers, like wind farms and methane recapture plants.

As Jack Davies, ceo of Collective Wellbeing, explains, CCX is a “cap and trade” system, meaning the exchange sets a total amount of greenhouse gas emissions that members are permitted to generate. The cap gets lowered over successive three-year periods. For example, says Davies, in the first year the cap is set at 100 tons, the next year it is lowered to 95 tons. The cap does not change even as membership grows. He acknowledges, “We are going to produce some greenhouse gases. The energy exchange allows us to purchase a reduction in emissions that another company has created with the end goal of decreasing total output. The more we decrease carbon output, the less incentives we have to buy.”

Aveda, a company known for its natural leanings, has been pursuing the green path for 15 years, says Mark Friske, Aveda’s Environmental, Health, & Safety manager. “At Aveda, there’s an environmental thought in every decision we make.” For instance, the Estée Lauder Cos.-owned company has partnered with several vendors to create returnable and reusable totes, or 200-gallon plastic containers that do not require a wood palette to transport raw materials.

In 1991, when Aveda moved into its current facility in Blaine, Minn.—which serves as its corporate office, distribution center and primary manufacturing facility—it began several large-scale projects. They included installing a computerized energy management system, skylights, solar panels that reflect sunlight into the facility and a more energy-efficient lighting system. With a host of large-scale efforts in place, Aveda’s efforts to make its production process green reached a pinnacle, prompting the brand to commit to wind power offsets, says Friske. Beginning in January 2007, 100 percent of the electrical usage at the facility is now offset by its wind energy purchase.
 
“Aveda pays a premium to develop wind energy in Minnesota that is then added to the local utility grid” from which the company will draw to power the facility, explains Friske. He notes that Aveda is the largest corporate purchaser of wind energy in Minnesota  and that the company’s commitment to renewable energy has directly supported the construction of two and a half wind turbines. He says that by using wind energy, Aveda helps keep 7.2 million pounds of carbon dioxide, the primary contributor to global warming, out of the atmosphere each year. The energy saved is also equivalent to the energy needed to supply 446 homes for an entire year.

In Friske’s view, baby steps, such as purchasing wind power offsets, are what generally occur at the end of a comprehensive and long-standing effort toward environmentalism. “Companies need to make an up-front investment for most of these projects, and the return is great.” In 1998 Aveda’s parent Estée Lauder signed a Memorandum of Understanding with the U.S. Environmental Protection Agency to join the Energy Star Buildings Program. The five-stage program is designed to optimize energy use and encourage savings, while reducing greenhouse gases. It includes a review of lighting, manufacturing and office equipment, chillers, steam usage and compressed air.

Mike Jaklitsch, vice president of Global Environmental Affairs and Safety for Estée Lauder, says since its implementation the program has reduced the beauty firm’s energy usage by over 84 million kilowatt hours, or the equivalent of 52,000 tons of carbon dioxide from the atmosphere. The efforts have also yielded a savings of $1.5 million a year. The beauty firm has also implemented a program called “Think Smart,” which invites employees to submit suggestions on how to decrease costs and improve efficiencies. “This year, 40 percent of the suggestions were green-focused initiatives,” shares Jaklitsch.

Avon, for its part, has been working to reduce its carbon footprint since the mid-Nineties when it signed on to the EPA’s Green Lights program, the agency’s first program to reduce energy consumption and greenhouse gas omissions. As part of the effort, Avon voluntarily retrofitted much of its U.S. facilities with energy-efficient lighting. The company has also switched to fuels with lower carbon emissions in new and existing facilities. This helped Avon reduce energy consumed per piece produced at its global manufacturing sites by more than 25 percent from 2000 to 2006. The direct seller aims to reduce energy consumed per piece produced by 10 percent by the end of 2008 (against the 2004 baseline). In addition, from 2005 to 2006, there was a 3.8 percent reduction in CO2e (carbon dioxide equivalent) emissions from its global factories. (The data does not include indirect emissions of nitrous oxide and methane from international locations or HFC emissions, which is expected to be a very small number.)

Clarins has written down its commitment to the ecology and splashed it throughout its most recent annual report and company communication. Jonathan Zrihen, ceo and president of Clarins USA, recalls that when he joined the company 15 years ago, he was told that it owes its success to the power of botanicals. He adds that Clarins challenges divisional presidents to take local measures to participate in eco-friendly activities, such as teleconferencing and using recyclable palettes for shipping.
 
Clarins’ debt of gratitude to nature has fueled its interest in sustainability, says Zrihen. He bristles at the phrase, “going green.” “A company can’t go green overnight. It’s more a state of mind,” he says. For a beauty company, he continues, that means responding to the needs of the current generation without compromising the health of future generations.

Since 1991, Clarins has abandoned the use of cellular extracts of animal origin, and worked to promote plant cultivation. For instance, since 1994 it has subsidized the Herboretum of Saint-Ay, near Orleans, France, which boasts more than 200 species of plants.

Smaller manufacturers in the natural products arena, including Pangea Organics and Suki Pure Skin Care, tend to have the smallest carbon footprints because they often make their products in small batches, not in large smokestack factories. Suki Pure Skin Care uses only natural ingredients in its products so there is no toxic waste as a result of its manufacturing process. Also, each item is handmade, poured and labeled so there is virtually no carbon output.

“We choose to use only biodegradable ingredients that do not hurt the ecosystem or animals in the long run, rather than petrochemicals, fragrances and preservative systems used in many ‘vegan’ personal care products,” says Suki Kramer, president and founder of Suki Inc.

“Green is in our DNA. We never stop thinking about it.”

“When I think about how to eliminate waste, it all comes down to design,” says Onysko, who created a plantable carton to house Pangea soaps. “Once you set your mind to it, you start to see all waste as a design flaw.”
 

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