Category Archives: Making the Business Case

When going green is NOT good business

Sustainability experts are constantly touting the fact that “going green is good business.” But what do you do when it’s not?

Kathrin Winker, who leads the sustainability team at EMC (and has a great blog) recently visited MIT Sloan, and told a story about how a bad business case actually fostered innovation.

EMC’s largest product is called a frame, and it can weigh up to 3,000 pounds. It’s shipped to customers in a cardboard, steel and plywood box that can itself weigh 200 pounds. A team at EMC thought it could potentially save money and reduce carbon emissions by using the boxes more than once. But there was a big problem. Recycling the boxes was far from cost effective. The team calculated that it cost $800 to ship an empty box back to the plant, compared with $300 to make a new box. This points to an uncomfortable fact: all too often, there is NOT a good business case for going green.

The video below chronicles the story, and the key moment comes when associate product manager Matt Popieniuck says: “At this point, it becomes evident that we have to make the empty box smaller so it becomes cost-effective to ship it back to the plant.”

Of course, at many companies such a conclusion would not be evident at all. It’s easy to simply drop a project that has a bad business case.

Instead, EMC staffers collaborated with their freight company and worked extra hours to redesign the box. The new box is strong enough to ship a frame, but can be collapsed to 1/4 its size. It can be reused 7 times, saves the company more than $1M a year, and keeps 1.2M pounds of carbon out of the atmosphere each year — the equivalent of taking 121 cars off the road.