Who Needs Cap and Trade? How Baxter Netted Nearly $12 Million by Going Green

A blog over on Manufacturing Business Technology has the scoop from Baxter's latest sustainability report about how the company netted roughly $12 million by going green. The blog post notes that this contribution to margin came from "environmental income, savings and cost avoidance for 2008 through its sustainability efforts". MBT suggests that there are two specific areas where Baxter's program can teach the rest of the manufacturing world lessons: green procurement and 'lean energy'.

From a procurement standpoint, "Baxter is embedding 'sustainability' into supplier relationships" by modifying its RFP process "to cover information about suppliers' sustainability commitment, initiatives, and performance" while also adding "sustainability language to its standard supplier agreement". And it plans to embed sustainability information as part of its global supplier score-carding effort going forward. From a 'lean energy' perspective, Baxter is redesigning production processes to use less energy and water, saving money and the environment (versus simply screwing in those light bulbs we've all come to hate).

Baxter's green savings strategies provide evidence that companies are focusing on green even without the insidious new "tax and tax" -- or "cap and trade" -- policy that looks to be snowballing its way to approval later this year. Personally, I believe that when companies can tie sustainability to savings initiatives, everyone wins in the end (rather than just the tax man). After all, the biggest inconvenient truth of all these days when it comes to green is that the US government is mucking up its need to increase tax receipts with environmental policy founded on science experiments that many are beginning to question.

Jason Busch

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