Inside SC Johnson's strategy to clean up the environment
Inside SC Johnson's strategy to clean up the environment
If you know one thing about SC Johnson, it's that it's a family company. The tagline that adorns adverts for Mr Muscle, Glade, Pledge, Toilet Duck and all the other products in the cleaning product giant's portfolio would be easy to dismiss as another example of cutesy marketing fluff from an American multinational, but for the fact that SC Johnson is actually a family company. The Wisconsin-based firm is onto its fifth generation Johnson chief executive in the form of Herbert Fisk Johnson III. And while it may boast operations in around 70 countries, it remains a privately held company that still manufactures the floor wax that it started producing back in 1886.
According to Clint Filipowicz, senior director for manufacturing in Europe, Middle East and Africa, this heritage informs a global sustainability strategy aiming to slash waste levels, increase the use of renewable power and deliver cuts in greenhouse gas emissions around the world. Private status gives the company the freedom to both "do what is right" and overcome the "constraint" of quarterly reporting by taking long term sustainability decisions, he argues. Or, as the fourth generation Johnson CEO, Sam Johnson, summarized in the company's unofficial mission statement, "every place should be a better place because we are there."
A greener production process
These words adorn the driveway into SC Johnson's Europlant factory just outside Amsterdam, a 300,000 square meter site that produces 400 million units a year to help clean Europe's kitchens, floors and toilets. But it is not the self-help style corporate mantra that first catches your attention as you approach the facility. Rather it is the 125-meter-high, 3MW Vestas wind turbine that is visible from virtually every corner of the site.
Erected in the summer of 2009 after a lengthy eight-year planning process, the turbine generates on average 10 million kWh a year, providing 52 percent of the factory's power and saving around $688,800 a year on its energy bills. The net result is that a return on investment is expected within six years from a technology that will happily operate for over 20 years. It is, according to the company's safety, health and environment manager, Stef Spaans, the most visible symbol of the company's commitment to cutting its environmental impact.
The turbine mirrors a similar initiative on the other side of the Atlantic, where the company's Waxdale, Wis., plant uses two turbines and a landfill gas-powered cogeneration unit to source 100 percent of its power from renewables. Both sites are contributing to a global sustainability strategy that has set a series of 2016 targets for the company to cut manufacturing waste 70 percent against a 2000 baseline, reduce emissions from manufacturing operations by 48 percent against the same baseline, and source a third of its power from renewables. Filipowicz says the firm is "well on track" to meet all its sustainability goals, and attention is now turning to setting a new wave of five-year targets. The 100 percent renewably powered Wisconsin plant and a growing portfolio of zero-waste facilities the company operates likely will provide a template.
In order to meet these targets at Europlant, the turbine has been accompanied by a host of measures designed to enhance energy efficiency and curb waste. Space-age robot arms and domestic cleaning products are used throughout the facility, and the labyrinth of conveyor belts and automated packaging machines has been optimized to reduce energy use and waste.
Sander Molkenboer, director of the Europlant facility, explains how empty bottles are delivered in the same boxes they are shipped in, slashing waste levels, while the location of can and bottle suppliers directly adjacent to the factory similarly serves to optimize production. "When you ship in cans or bottles from overseas, you are basically paying to ship in the air in the cans or bottles," he explained. "We have a hole-in-the-wall operation where the material is delivered from next door along a hundred-meter train line. The savings are significant."
In addition, Mr Muscle bottles are much less hefty than they used to be, after a light-weighting exercise trimmed 25 percent from the weight of the company's bottles, while water recycling systems serve to reduce the costs and environmental impacts associated with cleaning manufacturing lines when they are switched from one product to another. The company is also in the midst of a program to switch over all the lights on the site to energy-saving LEDs. Outside the plant's buildings, bee hives and a tree planting program both aim to improve the area's biodiversity.
Assessing economic impacts
As a privately held firm, SC Johnson's executives are cagey about discussing the cost and returns arising from the sustainability investments the company has made. Filipowicz insists many of the green measures the company has installed are driven by its values, with some offering financial returns and others delivering more marginal gains. But Molkenboer acknowledges that it is "a basic principle of sustainability that it delivers economic benefits." It is clear that with energy costs rising, everything from the wind turbine to the decision to install skylights to reduce the need for lighting are serving to cut the plant's operating costs.
Moreover, work is continuing to further optimize efficiencies and identify new areas for environmental improvement. Spaans reveals the company has an "energy prevention plan" that features a list of energy-saving proposals that is updated every few months. Various technologies are put forward and their technical and economic feasibility is assessed. Work is underway to see whether ground-source heat pumps could be deployed at the plant.
Significantly, technologies that don't make the cut are revisited every few years to see if falling capital costs or rising energy prices have tilted the economics in their favor. For example, the plant currently boasts just one large solar panel to provide power to the guard house at the front gate. Spaans insists the technology is still too costly to deliver the payback that would be required of a larger array. But he admits the potential for a larger solar installation will be reassessed in the future as costs continue to fall.
There are also measures in place to ensure that, once optimized, processes remain that way. "We do regular energy scans with outside consultants," Spaans explained. "We use heat-seeking cameras to check for leaks in the buildings and check the compressed airlines for leaks every three months."
What about the company's products?
Of course, the nature of SC Johnson's products beg the question as to whether the production processes or the end product makes you a green manufacturer. The firm's chemical-based cleaning and pest control products have faced criticism from some environmentalists who have raised questions about the impact of various substances on natural habitats. Meanwhile, rivals such as Ecover and Method have shown that cleaning products can be developed using natural substances, albeit while typically boasting a slightly higher price point. Should SC Johnson be doing more to reduce the environmental impact of its products as well as its production processes?
Filipowicz maintains the company is doing just that. It operates an internal program called the Green List that assesses all the chemicals it uses against 45 criteria and ranks them on a four-point scale of zero rated, acceptable, good and best. All of SC Johnson's products are fully legally compliant, but the fact that parts of the Green List assessment cover topics such as carcinogens, mutagens, reproductive hazards and acutely hazardous substances demonstrates how controversial the chemicals sector remains. However, Filipowicz reveals that since the program was launched in 2001, it has moved from having 4 percent of substances in the "best" category to having 44 percent achieving the top grade — a transition that he says demonstrates how the company is working all the time to identify effective replacements for any substance that may provide cause for concern.
Whether SC Johnson should be doing even more to accelerate this transition is an open question, but it is clear the company's senior executives are signed up to its environmental commitments. SC Johnson's privately held status may make it easier for executives to justify the R&D that enables it to improve the environmental performance of its products, or the clean technologies that serve to cut its carbon emissions. But it is also clear financial disciplines are still being followed, and many measures the company has installed at its Europlant facility to optimize production, cut energy use and generate power onsite are delivering substantial returns as well as carbon emission savings.
The gently turning turbine that towers over those leaving the factory tells you everything you need to know about this long-standing family company's mix of pragmatism and values, easily as eloquently as Sam Johnson's corporate mantra.