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Acting Now for Sustainability The recession may have forced the private and public sectors to make changes for the better. Thursday, November 05, 2009 Mr. Mario Insenga

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The economy has been in the doldrums, and it’s led businesses all across the country to struggle to survive, let alone profit. And through it all, they are under the pressure to go green and implement environmental practices.

In the public sector, these are difficult times as well. The recession hit the government hard with declining taxpayer revenue and bailouts, and as a result today an estimated 28 states are staring at insolvency.

Budgets are getting tighter, and organizations - private and public - are looking at what assets they have and how they can reuse them to get more value.

Yet despite the chaos and panic, this is a time of opportunity.

Organizations are rethinking where they operate and how they can cut costs across the board. They no longer have the luxury of business as usual. People have been talking about sustainability for years – and now institutions have a real opportunity for change, as they need to make full use of their existing assets in order to reduce their costs and understand the importance of asset management.

The continual acquisition of new assets is expensive. Maintaining furniture assets is a good example of something that both the government and private sector do regularly. The type of upkeep that comes along with new asset acquisition takes a toll, both on the bottom line and the environment. Old furniture needs to be disposed of, often ending up in a landfill, and the new furniture then has to be manufactured and shipped to the location, which is costly in many ways.

But there are alternatives. By investing in renovations and partnering with refinishing specialists instead of trashing furniture assets, both the costs and environmental impacts are reduced significantly. At the same time, organizations have the opportunity to become more sustainable and ROI dramatically increases.
 
With increased environmental focus of government regulations, combined with the business value of being green, there is an increased focus on adopting sustainable practices.

The culture of business, for both private and public sector companies, has had to adapt.

For a long time, the private sector has been trying to drive profits higher by expanding real estate portfolios. U.S. businesses have abided by the “If you build it, they will come” mantra for years as they built new hotels, offices and business complexes. Even if they didn’t really need it, they went ahead and built it. And people came, to a point, until this immense overbuilding had far exceeded the demand. Consequently, organizations have found themselves in a situation where many of these buildings are literally half full.

The recession has made businesses take a much closer look at their strategy. With less money around, everything has become about survival. Businesses are wringing every last bit of value they can from their assets, and the overbuilding has stopped. Half-filling two hotels will never generate as much value as completely filling a single building. By making full use of that single asset, a hospitality company is going to receive a much greater return on investment and ultimately save money.

The government is experiencing large cultural changes, too. For the past few decades, departments have had big budgets to work with and paid little attention to profitability. The long-term budget is dictated by what they spend, so as government departments spend more, their budgets grow larger. Thus they spend even more, and so the cycle goes. This way of doing things became normal, part of the culture. But this culture of not worrying about money and continually buying new assets is not really compatible with sustainable practices. Some departments have started to look at ways to reuse existing assets.

Over the years my company has completed furniture renovations for government organizations such as the Department of Defense, the FBI and the Executive Office of the President in the White House. This way of thinking must be adopted throughout the entire government.

In many ways, the recession has unified the government and private businesses in making better use of budgets and reducing environmental impact. Reusing existing assets, such as furniture, is crucial. Otherwise the business is likely to overspend, and any attempt at sustainability is doomed to failure.

Sustainable initiatives such as asset management are environmentally friendly and make solid business sense. Never were words more true - for public and private organizations the time to act is now.

Mario Insenga is CEO of The Refinishing Touch.