May 16, 2008 - Tailor your pitch to emphasize cost cutting and efficiency benefits or your emissions-reduction plan may never get off the ground, John Davies of AMR Research tells IndustryWeek.

"Manufacturers tend to think that green initiatives are something that is done out of altruism. In fact, a lot of times these programs are great revenue generators and cost-cutters," says Davies. "Even so, cost is still the driving criteria and will trump any sort of environmental component. There is no cost of carbon, and in itself there is no advantage in reducing carbon aside from making a statement. So if you can't make an economic case, it's hard to get something approved."

Returns on green investment can take a while to materialize, however, and many companies have more immediate priorities. One solution, according to Davies, is to consider the future cost of carbon (pegged at as much as $40 per ton of emissions, according to a new study) in cost/benefit projections.

"What happens then is they apply to a committee that's been established to oversee CO2 capital funding, and submit it for approval," Davies explains. "If the project provides a meaningful reduction, then they cost that at a certain dollar amount per metric ton to be considered in the approval process."

And don't forget that the best ideas come from employees on the ground, Davies says. "By making it clear to everyone in the company that sustainability is a critical part of the core value of the company, employees are given the freedom to be creative and look at alternatives that they might not have before. That's the differentiator now - whether the leadership is constantly asking you to look again and find ways to reduce emissions."