Steelcase's strategy for an environmentally sound, profitable business: Steelcase's business strategies continue to line the pocketbooks, but not the landfills.

It is not a transient change; it is a permanent one.

That is what Steelcase Inc. says about how environmental awareness is changing not only the face of the office furniture industry--but the world. With hundreds of environmental achievements under its belt, this 95-year-old office furniture manufacturer understands the significance of how its products affect the natural world.

But the company that initiated reductions in volatile organic compounds (VOCs) years before regulatory mandate required them, and the world's first industrial facility to receive LEED (Leadership in Energy and Environmental Design) certification from the U.S. Green Building Council is far from finished with its environmental legacy.

The Grand Rapids, MI-based company's latest environmental bragging fights are a result of: the completion of its 2-1/2-year effort to assess every chemical in its North American portfolio; the certification of the contract furniture industry's first "Cradle-to-Cradle" product; and the implementation of one of the first-ever, 100 percent water-based, UV finishing lines.

And it's not stopping there.

25 Percent in Five Years

By 2012, Steelcase wants to reduce its environmental footprint globally by 25 percent. The company's 2006 Environmental Report showcases significant progress toward that goal in a number of areas. Over the last five years, Steelcase has reduced:

* Greenhouse gas emissions by 41 percent;

* VOC emissions by 95 percent;

* Water consumption by 54 percent; and

* Energy consumption by 46 percent.

All of this was accomplished while sales and profits increased over the last three years.

According to Angela Nahikian, Steelcase's manager of global environmental strategy, some of Steelcase's environmental efforts make the company money white others do not--but overall, she says, the company has profited both financially and ethically.

"It's a philosophy about how we do business more than it's a set plan," she says. "We do have a plan with specific aspirations and benchmarks, but the essence of it is that this is the way we do business every day and are going to continue doing it for a tong time."

Kevin Kuske, general manager of Steelcase Wood, uses the new UV finishing fine as an example. "When you first took at UV-water, it rooks Eke it's going to be more expensive. But I think as we work through it, we're going to prove that it's just as cost effective. I have a high degree of confidence in that because we've been through it on so many other things. At the end of the day, you just have to drive these solutions to be both cost effective and good for the environment."

Ultraviolet, Ultra Lean

When Steelcase opened the country's first LEED Silver-certified industrial facility in 2001, one of the factory's "green" characteristics was the use of water-based glues, stains, topcoats and UV finishes. According to Kuske, water-based finishes were seen as a friendlier alternative to solvent-based finishes for two reasons:

1.) Wood plant operators would no longer risk being exposed to those chemicals on the job.

2.) Products would no longer degrade indoor air quality by emitting solvents.

"Moving from a solvent to a water-based system leads to the most drastic reduction of solvent-based emissions," Kuske says. "This happens both in the manufacturing environment and ultimate customer office environment, making a better, safer environment for both our employees and our customers."

According to Steelcase's 2006 Environmental Report, the company's VOC emissions have dropped from more than 1,500 tons to less than 60 tons in the last five years--a 95 percent reduction.

However, replacing traditional solvents with water meant a longer and less-efficient cure time in Steelcase's thermal finishing equipment because the heat had different effects on the two substances, Kuske says.

"In the past, when you had solvent-based [finishes], solvents evaporated quickly and in a way that allowed the solid to dry in a nice, smooth [manner]," Kuske says. "When you go to water-based finishes, thermal takes a long time and a lot of energy. So in some sense, you're kind of undoing the good of the environmental aspects because you're using more electricity."

Using thermal finishing techniques with water-based solvents also does not make sense from a business perspective, he adds. According to Kuske, products made with water-based finishes continue curing for about three months after undergoing heat-induced curing in the factory--which not only increases production time, but also allows for more handling damage in the distribution, installation and move-in process.

But when products made with water-based finishes are exposed to UV light, as opposed to heat, the curing process in the factory is much shorter--and it is completely done as soon as it leaves the curing equipment.

"Imagine two recipes. One of them is done as soon as you take it out of the oven. The other needs to sit on the stove for 30 minutes afterwards," Kuske explains. "When you're done with the UV processing, you're basically done. The product reaches its maximum cure and hardness immediately. A thermally cured system receives a partial cure in the ovens, but continues to cure over time and can therefore be softer and more prone to damage in the first 90 days."

Using a water-based UV finishing system also significantly reduces the amount of space and time needed to complete the curing process, he adds. Although Steelcase will not complete its conversion to UV until later this year, the company says it hopes to reduce conveyor time significantly and required floor space by 25 to 33 percent.

"We believe the industry will move in this direction," Kuske says. "The importance of making sustainable business decisions continues to grow as more customers and A&D firms become convinced it is not only the right thing to do, but a better business decision. Changes in indoor air quality standards, and awareness of the impact material chemistry has, will only make it more important."

Chemical Custody Battle?

"Materials chemistry is really the foundation of anything you want to do environmentally with a product," says Nahikian. "If you don't know what's in your product, and you don't know the impact of the materials choices that you make, then you don't really understand the holistic environmental impact of your product."

Over the last 2-1/2 years, Steelcase has completed a materials chemistry assessment of "every material in every piece part in every product that we manufacture in North America," according to Nahikian.

Those assessments were conducted by McDonough Braungart Design Chemistry (MBDC), which first inventoried the chemical materials found in Steelcase's products and then evaluated those materials based on their use within specific products. Based on 19 human health and environmental criteria, each of the 300 chemical materials Steelcase uses was then placed into one of four categories: green, yellow, orange or red, with "green" chemicals representing little or no risk, and "red" chemicals indicating known or suspected carcinogens or other harmful substances.

After MBDC completed its work in December 2006, Steelcase's first order of business was to develop exit strategies for each of the "red" materials identified. One of the company's first and most significant exit strategies involves PVC, or polyvinyl chloride.

PVC has been replacing traditional building materials in recent years because it's cost-effective, easy to assemble, flexible and durable. However, many environmental groups, including Greenpeace and the Sierra Club, claim PVC production generates the byproduct dioxin, a known human carcinogen that persists in the environment for tong periods of time and can travel through soil and water easily. Steelcase's goal is to be "100 percent PVC-free" by 2012.

Doing the chemical assessments and making the exit strategy commitments were easy efforts relative to the work involved in identifying just what chemicals were contained in Steelcase's products.

"It's been a tremendous challenge because, as a manufacturer, we purchase from one supplier, but then they have many sub-suppliers, so we have to get down to the third tier and sometimes fourth tier 'suppliers to the supplier.' That's because we need to ensure that we have all the information about the processing and the materials composition and the additives and all of that," Nahikian says. "Only then are we able to know exactly what's in there and whether it's clean or not."

Struggles over chain-of-custody for raw wood materials do not compare to the chemical chain-of-custody nightmares unfolding for Steelcase and other companies. In addition to dealing with first-tier suppliers who may not know the origin of their materials or what happens to them between the original and final destinations, many suppliers are uncomfortable releasing information about their chemical materials because they have intellectual property rights--a problem not encountered with wood materials.

To bypass this issue, Steelcase established a relationship between MBDC and the suppliers in which confidential information could be transferred only between those two parties. "We have no access or need to know," Nahikian says. "What we need to know is whether what's in there is clean or not."

Across all industries, Steelcase is making one of the largest commitments to materials chemistry assessments, according to Nahikian, who adds that this could be the beginning of the next chain-of-custody trend.

"Much like the chain-of-custody for wood, I think that the industry will be drawn there in terms of chemistry," Nahikian says. "But it's broad--it cuts across all materials, not just chemicals or plastics."

Rising From the Grave?

According to MBDC, industry should mimic nature by eliminating--not just lessening--waste from its operations: "Cradle-to-Cradle' Design models human industry on nature's processes, in which materials are viewed as nutrients circulating in healthy, safe metabolisms. Minimizing toxic pollution and the waste of natural resources are not strategies for real change. Designing industrial processes so they do not generate toxic pollution and waste in the first place is true change."

While the "Cradle-to-Grave" lifecycle flows in only one direction--each product is dumped in a landfill at the end of its "life"--the "Cradle-to-Cradle" cycle keeps materials circulating perpetually in a closed loop. The idea is to design products in such a way that they can be easily dismantled into usable materials--materials that will re-enter the production cycle to make equally valuable new products.

In November 2000, Steelcase earned a Silver "Cradle-to-Cradle" certification from MBDC for its Answer workstation, marking the first such certification in the contract furniture industry. The workstation offers a power system that is PVC-free, has reusable panels, incorporates panel fabric that is 100 percent recycled polyester, uses metal panel trimming, which is 100 percent solvent free, and includes work surfaces made from 100 percent pre-consumer recycled wood fiber.

"Steelcase began the 'Cradle-to-Cradle' workstation certification process with Answer because it is one of the best-selling systems products in the world, so it should have immediate and widespread impact," says Allan Smith, Steelcase's vice president. "This may be the first, but we expect all of our leading systems products to achieve this certification within the next [year]."

Four other Steelcase products also received MBDC's official seat of approval, including the Think chair, which has up to 98 percent recyclable material and may be disassembled for easy reuse and recycling.

In the Driver's Seat 

White Steelcase and other companies have been driving environmental change for decades, recent legislative and consumer pressures have contributed to the forces affecting the industry's efforts to take stock of what is in the products and manufacturing processes.

Two recent European Union initiatives--the Waste Electrical and Electronic Equipment (WEEE) directive and the Registration, Evaluation and Authorization of Chemicals (REACH) framework--are forcing products sold in the E.U. to abide by environmental standards much more stringent than those in the United States. But because some companies and industries do not wish to make multiple versions of their products for markets in different geographic areas--or perhaps because they foresee U.S. law moving in a similar direction to E.U. law--they are implementing these changes across markets.

On the consumer end, companies are being held to a higher standard than in the past. According to Nahikian, whereas only about 30 percent of Steelcase's proposals generated environmental questions two years ago, now the company receives environment-related questions on approximately 85 percent of its proposals.

"The bigger part of that is the types of questions they're asking," Nahikian says. "They might have been asking 'Do you have a statement about your environmental position?' two years ago. Now, they're literally saying: 'Here's a list. Do you have any of these in your products? And, if so, where are they?' If we had not done [the materials chemistry assessment] work, we would have a very difficult time answering those questions--and most manufacturers do have a difficult time answering those questions."

According to Nahikian, the consumer push has "given a lot of confidence to industry that this is something people care about, that we can talk about the things we've been doing already, and that we can invest more in the things that are different from what we've been doing."

But Nahikian says who is driving companies like Steelcase toward more environmentally oriented products--whether it be industry, government or consumers--is not as important as what is driving that change. The age of the population spurring the healthcare economy, rising energy costs and geo-political events related to things such as climate change, all intersect where the environment is concerned.

"The common thread through all this is environmental," Nahikian says. "The environment has an effect on people's health, which has an effect on the economy. Energy is related to our use of renewables, and the development and advancement of those technologies relate to our ability to sustain enough energy to make our society and economy work. And we now realize that we're all in the same geography together. These things all come together, and the common thread is the environment. So we believe it's not a transient issue. It's here to stay, and it's changing everyone's behavior."

Despite changing world situations and consumer, legislative and industry behaviors, Nahikian says environmental stewardship has "always been part of our culture. We just do it because it's the right thing to do."

STEELCASE INC.

Grand Rapid, MI

Office furniture giant Steelcase Inc.'s goal in its environmental plan is to reduce by 25 percent its global environmental footprint. The company already has instituted a number of initiatives, including reducing VOCs and tracking chemicals used in materials.

Three Keys

1. The company is implementing one of the first 100-percent water-based, UV finishing lines.

2. Steelcase recently completed a 2-1/2-year assessment of every chemical used in its North American-made products.

3. The Answer workstation is the first contract furniture product to receive a Silver "Cradle-to-Cradle" certification from McDonough Branugart Design Chemistry. Four other Steelcase products have also received MBDC's official seal of approval.

www.steelcase.com