HARVEY HARTMAN : Chairman and chief executive, the Hartman Group
It is a common cry: With so many environmental regulations, how can anyone do business anymore? But like it or not, the guidelines to curb everything from spray-can emissions to paint disposal are here to stay. So says Harvey Hartman, chairman of a Newport Beach consulting firm that instructs companies on how to comply at the lowest possible cost. Yet that’s only half the job. Hartman says that to gain an edge on competitors, firms have to stay ahead of the regulators. He spoke to Times correspondent Ted Johnson.
Should a business expect major changes in environmental regulation from the Clinton Administration?
We can anticipate new regulations and more stringent enforcement. What we have seen is kind of a pendulum that is working. There have been a lot of new regulations and compliance issues and the difference up to this point has actually been the interpretation and enforcement. The enforcement has been a little lax because the regulators have been sensitive to the fact that many of these regulations may do economic damage to companies. However, the EPA today and other agencies are more open. These regulators will look at ways that they can help. And companies do have the capability of influencing standards. (Vice President-elect Al) Gore has said in certain cases--things like labeling--he would like to see the industry regulate itself. There is an opportunity to control your own fate rather than have the competition and government control the fate for you.
You spend a lot of time with your manufacturing clients targeting the consumer with so-called “green products.” How?
One of our first efforts is to understand what the consumer wants in a particular product category. We then go back to the manufacturing and product orientation and see what we can do to make this product environmentally sound. What we are doing is looking at an entire process, everything from what the product is made of, how it is manufactured and processed, how it goes through the distribution channels and what the consumer wants. One of our clients is an apparel manufacturer. We have found that rather than the traditional dyes that they use, we have been able to uncover some new dyes that have the same quality, the same color. In essence the consumer doesn’t recognize the difference and (the manufacturer) has saved the money in terms of (its) dye process. It is immediate savings for the company. We also find that there is a lot of sensitivity in the youth market toward environmentalism. They are much more militant, their questions are: “Why don’t you do it?” So the apparel client has said, “Hey, we can tackle the youth market.” It’s also a whole new market they can get into.
Many businesses argue that the cost of complying is too costly and can even drive them into bankruptcy. What should they do?
Today, if they address the issues, in many cases, it is not going to cost them more money. We have examples where it is actually less money. And if they wait five to 10 years they could be out of business because their competition could create barriers to entry that they could never match.
What should a small business do?
There are real concerns that companies are leaving the state because of environmental regulations. I actually believe that it is not solely the environment. It might be cost of labor or the market. But the intent of many small businesses has been: “We’re going to do it until they come and tell us we can’t do it anymore.” People have to get out of looking at it as damage control and look at it from the total perspective. They have to place the environment on top of their priority list. Don’t think you’re out there by yourself. You can rest assured that other businesses in your industry are having the same kinds of problems. Trade associations can assist, your suppliers can assist. You must stay ahead of the curve.
Aren’t new environmentally sound materials more expensive?
A year ago, they probably would have been. As time goes on, we find them at the same cost or less expensive. This industry is not going to be any different than other industries. If you make the comparison to high-tech, remember when chips were very expensive. But manufacturers met consumers’ needs and the cost went down. This is going to drive (environmental products) the same way.
Say a company can’t comply, what should it do?
If you’re doing something from a hazardous waste standpoint, those are the issues that have to be addressed. But with regard to many of these environmental issues, if you are demonstrating the intent to fix the problem and you are working toward that, that says a lot to the regulators who are out there.
What should the consumer be looking out for?
Today the consumer is really skeptical because of all the misleading kinds of things that companies have claimed to be doing. The consumers should be aware of a number of questions: Be good at reading labels. They should look at what specific kinds of things the manufacturer is doing. “We have cut sulfides by 50%.” Or “We have recycled our water.” They should look at how the packaging is presented. “Is there excess packaging?” “Is it done properly?” “Is it recyclable?” They should also look to see that it meets their requirements for quality and convenience. In many cases it doesn’t need to be more expensive.
What aspects of the Clean Air Act will have the greatest impact on business?
Obviously the disposal end of it, incineration versus landfill. A lot of that will be driven by technology. These regulations being put into effect are moving targets. They are going to be refined as things happen. We’re putting some stakes in the ground that are important, but those stakes will move as technology becomes more sophisticated. We’re finding that a company will take a residue, which would normally go into a landfill, and use it in another product.
On more stringent enforcement from Washington.
“I look at it more as an opportunity. The regulators are much more willing to work with companies than against them.”
On complying with the South Coast Air Quality Management District.
“Each state has its own idiosyncrasies. We sense the AQMD has a sensitivity to what business is going through. It’s got to be environmentally sound. And yet it’s got to be so it doesn’t put companies out of business.”
On firms leading the move to safe products.
“It’s not just large companies. A small company can move quickly, bring out the new technology and new products.”
On consumer needs.
“They want to buy an environmentally sound product, but they don’t want to sacrifice their lifestyle. They want the same quality, convenience and price.”
