One of the organization's newest partnerships is with Kohlberg Kravis Roberts & Co., the big private equity firm. "Nobody is as focused on cost savings as KKR, and yet without hard looking we were able to find some savings, and they're excited and in search of others," Ruta said.
The pilot phase of the partnership, results of which were announced in Februrary, involved making just a few changes at a few of KKR's portfolio companies. These produced savings of 25,000 metric tons of greenhouse gas emission reductions and 650 tons of solid waste, which generated a $16 million reduction in operating costs. "It was enough to get the attention of portfolio managers at KKR, and now we have a schedule of bringing three or four companies into the program each quarter," Ruta said.
One of the fund's most successful partnerships has been with Wal-Mart. One recently completed initiative involved switching from diluted laundry detergent — a little soap and a lot of water in a big jug — to a more concentrated product in a much smaller container. This single change, according to Ruta, produced savings of $30 million in labor costs, 150 million gallons of water, 7 million gallons of fuel, and 30 million pounds of plastic resin, as well as a 50% out-of-stock reduction.
Such large savings are a result, of course, of Wal-Mart's size. But there's also a spillover effect to other businesses. Wal-Mart sells more detergent in the United States by far than any other company, so detergent manufacturers acceded to its demand for the new production specifications, and are now distributing the smaller soap containers throughout the whole retail industry.
Another Wal-Mart program involved Minute Maid orange juice. The juice formerly was made at a factory in Florida, shipped to Minute Maid warehouses around the country, then to Wal-Mart distribution centers, and from there to Wal-Mart stores. The companies agreed to skip the stopover at the juice company's warehouses and ship the product directly to the retailer's distribution centers. That change took a million miles off the total shipping distance traveled, saving 140,000 gallons of fuel and reducing carbon dioxide emissions by 1,500 tons.
Ruta also told of a fleet management program in which Owens Corning eliminated its least-efficient vehicles, right-sized its SUVs and trucks, and incorporated more four-cylinder vehicles into the fleet. These changes cut greenhouse gas emissions by 16%, boosted fleet fuel economy by 18%, and decreased fleet operating costs by 8%.
The Environmental Defense Fund, meanwhile, last summer started Climate Corps, an internship program for MBA students between their first and second years. They get "boot camp training in building energy efficiency and financial analysis," and are placed in companies to help develop energy-savings programs. In the first year the seven students in the program generated an aggregate $35 million in operational savings that will be spread over the next five years, and saved 120 million kilowatt hours (enough to power 10,000 homes for a year) and 57,000 tons of greenhouse gas emissions (equal to taking 7,000 SUVs off the road). For this year, EDF expects to increase the program to 20 students.
"This was all done in California, which has already done more than any other state in energy efficiency," Ruta said, adding that companies that have implemented energy-reduction programs and other green initiatives should take second, third, and fourth looks at savings possibilities.
"There's always more you can find," she said. "We're even continuing to find improvements in our own operations" at the Environmental Defense Fund. "It's not rocket science — it is looking at your operations through a new lens, finding efficiencies, and keeping track of the cost benefits."
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