Hy-Vee s sustainability efforts promise to benefit employees, customers, communities and the company s bottom line.

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2 Hy-Vee s sustainability efforts promise to benefit employees, customers, communities and the company s bottom line.

3 Imagine a Hy-Vee grocery store not quite like any you ve seen before. Shoppers wheel their carts over concrete or terrazzo floors (which require minimal cleaning chemicals) down aisles filled with seasonal, locally purchased produce and organic and sustainably sourced products. Above, skylights allow natural light to stream into the store, and energy-efficient overhead lighting comes on automatically when it s needed to supplement the natural light. There s a subtle hum as everything operates at its most efficient from the HVAC system to the refrigerated cases outfitted with doors (to reduce the energy required to keep food cold) and motion-sensor lights (so they re not on when the aisles are empty). Behind the scenes, drivers delivering Hy-Vee private label products shut off their truck engines for unloading rather than idling. Before they start up, the empty vehicles are filled with paper, cardboard, plastic, and pharmacy stock bottles all headed for recycling rather than the landfill. The reality of such a Hy-Vee store isn t far off, thanks in large part to the sustainability efforts the company is undertaking. Terms such as sustainable, eco-friendly, and green have become buzzwords as awareness of rising energy costs and the concern about global warming have grown and they aren t being thrown around solely by so-called tree huggers or hippies anymore. It seems that being green these days isn t a political statement so much as a conscientious decision. And as the concept of sustainability transcends politics, companies are starting to base business decisions on more than the bottom line it s about the earth and the people who occupy it too. It turns out that the connection between profits and sustainability isn t such a stretch after all. Just ask Michael Smith, director of real estate and sustainability for Hy-Vee. People have to lay down their political perspectives and approach this with an open mind, Smith says. A large number of choices that make sense environmentally also make sense economically. We will pursue sustainable initiatives because they are the right thing to do for our business and the environment, not because they are politically correct. One of the biggest challenges, however, is that there isn t a cutand-dried definition of sustainability. To Smith, it all boils down to good stewardship of the environment and society as a whole. Good stewardship of the environment means taking care of the air we breathe, the water we drink, and the land we use to grow food. Stocking a variety of organic produce in Hy-Vee stores is one way the company is offering its customers more environmentally friendly products.

4 It s about being responsible for how we consume resources so future generations have the same opportunities we have had, he says. The adoption of sustainable practices allows companies to accept responsibility, but do so in a manner that makes sense economically. Beyond the bottom line It has become increasingly clear that companies can t ignore the green movement and now that retailers realize what is right economically and what is right environmentally don t have to be at odds with one another, they are discovering that their own greenness can have a significant impact on their bottom line. Case in point: energy efficiency. Environmentally, energy efficiency makes sense because fewer natural resources are used and less waste is produced when less energy is consumed. Making energy-efficient choices also makes sense economically, because companies spend less money when they consume less energy. And when three-quarters of American business leaders believe energy prices are going to continue to climb, any reduction in energy usage adds up. There are also soft economic benefits to going green, Smith points out. Evidence indicates that consumers are positively Hy-Vee s commitment to sustainability is a natural extension of our commitment to the health and well-being of our customers, employees, and communities. influenced by the environmentally friendly practices of companies. For instance, comparative sales data indicate that shoppers purchase more in stores with significant natural light versus those that are lit solely by artificial means. As consumers awareness of environmental issues increases, they expect to see the companies they do business with take an interest as well. A recent GfK Roper Green Gauge Study reports that a majority of consumers (87 percent) agrees they are seriously concerned about the environment and that a company s environmental practices are important in making key choices about the products they purchase, the services they recommend to others, and where they shop. Another recent study, conducted by Chain Store Age and Leo J. Shapiro & Associates, reports that 73 percent of consumers feel that retailers should do more to protect the environment and conserve energy. In particular, consumers want retailers to focus on four key areas: protecting foods from pesticides, making waste sites biodegradable, protecting forests, and conserving energy. Simple ways to At Home Unplug household appliances and electronics (like the coffeepot, toaster, and cell phone charger) when they re not in use. Turn down the thermostat in cold weather and kick it up in warm weather to save heating energy. Reduce water use by turning off the faucet while you re brushing your teeth. To save even more water, replace faucets and showerheads with low-flow models. Recycle plastic, paper, glass, and aluminum. Also look for places to take electronics, batteries, and toxic household items. At Work Drink from a reusable glass or mug to avoid the waste generated by disposable cups and lids. Recycle or reuse office supplies for instance, print on both sides of paper before tossing it in the recycling bin. Turn off lights when no one is in the break room or conference room to conserve energy. Reduce fuel use on your daily commute by carpooling, biking, walking, or taking public transportation. Hy 21

5 Beyond the environmental implications, consumer research is also confirming the connection people see between health, well-being, and the environment a concept that Hy-Vee is well aware of too. Hy-Vee s commitment to sustainability is a natural extension of our commitment to the health and well-being of our customers, employees, and communities, Smith says. Consumers make decisions based on what is good for them. There s a connection between the focus on healthy living and sustainability. We see these things as being very much linked. Coming to a store near you With all the heady talk retailers are engaging in about sustainability, it s still difficult to define the actual steps companies need to take to Buildings implement their sustainability policies. No one knows this better than Smith. It s a monstrous task, and it s just kind of coming into focus, he says. We have only begun the process of establishing goals for the overall sustainability program. Making these goals a reality won t happen overnight. Some moves have been made. Others are in the planning stages. Still others are just ideas, plans that Smith says the company will likely pursue, but that require more research, more time, and more resources. To move closer to the company s goals, Hy-Vee has created a sustainability team comprised of a variety of people at various levels in the organization. The team is focused on learning about environmental issues, developing a sustainability strategy linked to Hy-Vee s overall business strategy, and mobilizing people including employees, suppliers, and customers to get involved. A significant challenge of sustainability is that it leaves almost nothing untouched, Smith says. Virtually everything we do to build, stock, and operate our stores has an impact on Hy-Vee s environmental footprint. Part of Smith s job, however, is to identify the changes that will have the greatest impact so that the company can tackle those first. At the top of Smith s list is store design. When the Hy-Vee corporate office was built about 15 years ago, it was constructed as a relatively green facility. Some of the The U.S. Green Building Council s Leadership in Energy and Environmental Design (LEED) certification program is a voluntary rating system for building green. Buildings are awarded points in categories sustainable site development, water savings, energy efficiency, materials selection, and indoor air quality and receive one of four levels of certification, depending on the number of points earned. Adhering to LEED guidelines lends credibility to a company s sustainability mission, and certified buildings have been shown to reduce waste and greenhouse gas emissions, conserve energy and water, lower operating costs, and increase the value of the buildings. In addition, studies have shown that inhabitants of green buildings are often happier, healthier, and more comfortable and therefore more productive and less likely to miss work than employees working in nongreen buildings. Sustainability is here to stay. But in order for our sustainability efforts to be a success, we have to get our employees, suppliers, and customers involved. building s green attributes include large levels of natural light, natural humidification, and the proximity of the campus to major residential developments and interstates, which reduces the time and energy employees consume commuting to work. Smith says that many Hy-Vee stores, like the corporate office, already incorporate environmentally friendly features. This includes energy-efficient equipment, the reuse of waste heat, and general design stressing energy and building material efficiencies, he explains. And that s just the beginning. In fact, Smith says Hy-Vee intends to build a LEED-certified grocery store in the future. (Learn about LEED certification in the sidebar, left.) While building green is a top priority, Hy-Vee also is addressing how the company stocks and operates its stores. It s about product sourcing, packaging, logistics and distribution, energy and resource 22 Hy

6 Above: Glass doors on refrigerator and freezer cases reduce the energy used to keep items cool. Right: The future entrance of the Hy-Vee grocery store on Fleur Avenue in Des Moines, Iowa, showcases how new store designs incorporate environmentally friendly elements such as concrete flooring and natural light from windows and skylights. conservation, and recycling and waste management broad categories filled with many challenges. For instance, in regard to sourcing, it involves purchasing sustainable items (like seafood), locally grown produce, and other natural and organic products. It s also shrinking the size of packaging for items such as the private label products Hy-Vee sells. And there s the shopping bags that leave Hy-Vee stores every day and end up as garbage. The company is working to minimize the number of bags used for packaging and increase recycling of plastic bags. Plus, Hy-Vee soon will introduce a number of reusable shopping bags. And those examples barely scratch the surface. A changing industry Hy-Vee isn t alone in its added focus on sustainability. According to Greening of Corporate America, a McGraw-Hill Construction report, by early 2009 American corporate philosophies will have reached a tipping point in embracing sustainable practices. Among retailers, that tipping point may already have occurred. Seeking ways to increase energy efficiency is nothing new for instance, most stores have reused waste heat from refrigeration equipment for quite some time. And retailers often share their practices with others. To an extent, it s a collaborative spirit rather than a competitive one, as each company strives to minimize its impact on the environment while keeping an eye on that all-important bottom line. One thing is for certain, Smith stresses. Sustainability is here to stay whether we like it, accept it, or believe in it, he says. But in order for our sustainability efforts to be a success, we have to get our employees, suppliers, and customers involved. In the end, Smith says it s likely a successful sustainability program will rely on the answer to one not always simple question. We need to stand back and say: Is this good for us? Hy 23