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What's Your Sustainability Tolerance?

A California company asked its workers this question and their answer prompted a green investment that's paying both financial and cultural dividends.
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Sure, you could call them hippies. The 120 bakers, buyers, and executives who run Alvarado Street Bakery -- one of an estimated 300 worker cooperatives in the U.S.--are proud stewards of the environment. For 34 years, the bakery has produced organic whole grain breads using methods that practically scream "green."

But the greenest of Alvarado folks, when considering sustainability initiatives, understood that even the most earth-friendly strategy would fail if it drained company coffers. That's why the co-op's early interest in solar-energy projects went nowhere, explains CEO Joseph Tuck. Solar power was "neither affordable nor cost effective" even 10 years ago.

"Our commitment to sustainability and not exploiting workers or the environment is our mission, so it was not a hard leap for us to investigate solar again," Tuck tells The Build Network. "The question was really how much we, as workers, would be willing to sacrifice--in terms of our wages--to implement solar. We were willing to sacrifice to a point; it was a question of our limit."

After a series of meetings, conversations, and straw votes, Tuck determined that employees were willing to forgo roughly $1,000 per year in compensation to make solar panels a reality. ("In our system, costs impact compensation directly, as the workers are the owners," he explains.) If the company could stay within employees' financial comfort zone while demonstrating its commitment to sustainable energy, it would score big cultural--and environmental--gains.

With that in mind, the co-op conducted an ROI study and subsequently voted to use cash (and a 30 percent government subsidy) to finance the $1.8 million installation of 1,722 solar roof panels in 2010. Today, 40 percent of the company's energy--some 2,000 kilowatt hours a day--comes from this clean, renewable source.

What's more, the solar initiative puts $200 a year in each worker's pocket. "Future savings now depend on how fast energy prices rise in relationship to inflation," Tuck says.

As if that weren't motivating enough, the company also keeps a running tally of its CO2 impact online: It would take 33,631 mature trees one year to reduce the total amount of C02 avoided. The total amount of C02 avoided is equal to 5,710,590 miles driven in a family sedan. The total amount of energy generated would power 1,311 houses for one month.

Though less quantifiable, the cultural and marketing impact cannot be ignored. "This makes all of us feel that much better about being part of the business," Tuck says. "Plus, 'bread baked by the sun' has a really nice ring to it."

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Last updated: Aug 7, 2013

THE BUILD NETWORK STAFF

The Build Network staff curates provocative, actionable leadership advice for executive teams running sustained-growth companies.




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