December 17, 1995

Article at Sunday Age

BUSINESS | The color of money has become green

By Wilson da Silva

LEAPING on the environmental bandwagon was once seen simply as good tactics; now it is starting to mean big cost-savings and efficiencies.

The trend, well established overseas, is strengthening in Australia and proponents are saying there has been a sea change in corporate attitudes toward matters environmental.

Mr Bruce McDonald, environmental project manager at Fletcher Construction, says: “Until you start seeing outside the square, you don’t see the savings. It’s not about wearing grass skirts and throwing away the mobile phone. It’s actually good business. 

“ Fletcher’s eyes were opened after it won a $14.5-million contract two years ago to build two police station-and-court complexes, one at Dandenong, the other at Frankston.

It decided to pilot a waste-minimisation program at one and operate the other in the traditional manner.

In the end, the numbers told: at the “green” Dandenong site, where one-third of waste was recycled, total refuse was 15 per cent less than at the Frankston site.

Compared with the Frankston project, less than half of the landfill space at Dandenong was used for waste. This saved Fletcher 55 per cent on waste-removal costs.

“That really sold it for us,” said Mr McDonald. “Years ago, we used to send our waste concrete straight off to landfill.

It costs us money to dispose of it. Now we can use it as road base and, even better, we can make it a value-added product by using the site waste as ‘green concrete’.

“There’s a general awareness now that waste costs money and, by controlling that, we can improve our business,” he said.

The savings have been impressive enough to persuade five of Fletcher’s competitors - LendLease, Multiplex, John Holland Constructions and Barklay-Mowlem - to join a federal-state government program, run by the Australia and New Zealand Environment and Conservation Council, that is designed to emulate Fletcher’s techniques.

Dr Tony Beck, assistant director of the Business Council of Australia and head of its environment unit, said: “For most large companies now it’s recognised as being essential to have effective environmental management if they are going to stay in business.

“There have been some very impressive cases of cost-savings or profitable new products developing. It’s now seen as part of doing business.”

The trend has been strong overseas. A recent study of the green programs of 43 British companies found that environmental initiatives were netting them a total $21 million a year in savings and an average payback time of 18 months for measures that required initial extra expenditure.

Last year, more than a third of Britain’s top 100 companies produced separate environmental reports on their activites.

In the United States, chemical producers claim to have achieved a 49 per cent fall in pollution output since 1989, and some leading companies are confident enough to talk about a zero- waste production level as a serious long-term goal for the industry.

Many are finding even little things help. In England, a Sheffield company has been saving more than $200,000 a year by only mailing out statements when requested.

Another spent $620 putting its drivers through environmental awareness training. This saved $3600 a year in diesel costs.

In Australia, Westpac is among companies that have joined the trend. In 1993, the Sydney-based bank spent $4 million introducing an environmental program that is expected to have saved $11 million by next year.

Westpac initiatives have included water-conservation audits (saving $30,000 at one Sydney branch) and energy-efficient designs for new premises (which have cut energy costs 25 per cent). .

At the Portland plant of aluminium producer Alcoa, a review of workplace practices reduced waste production to six cubic metres a month, down from 1100 cubic metres. This has saved Alcoa $400,000 in disposal costs.

Some companies have taken environmental measures to heights that only a few years ago were a conservationist’s misty-eyed dream.

An office block under construction in Canberra uses geothermal energy to boost its heating and cooling system.

This trend to greening the corporate workplace is also leading to job growth, according to the Green Jobs Unit, a federal program run by the Australian Conservation Foundation and the ACTU which trains unemployed candidates in waste minismisation and environmental auditing skills.


  • Westpac. Water conservation audit: $18,000 to $30,000 per city branch. Computerised climate and lighting control: 25 per cent on energy bills.
  • Norwich Union head office, Melbourne. Energy-use program by staff: $36,000 a year. Use of recycled paper: $42,240 a year. Lighting controls for every room: $7,000 a year.
  • Flinders Medical Centre, Adelaide. Environmental audit of disposals: $70,000 a year. Automation of bed-pan sanitising: $130,000 a year. Ceramic mugs replace polystyrene cups: $14,000 a year.
  • The Parkroyal, St Kilda Road. Energy use audit: $24,000 a year. Long-life, low wattage light globes: $2166 a year. Installation of water-efficient showerheads: 50 per cent less water consumption. Use of recycled paper: $2000 per year.