Services

Background

If you are a service provider, sustainability doesn’t apply to how you manufacture a product, but how you provide the services you do, and how you run your business. The environmental or social impact of your services may be related to the way you produce those services – for instance, a photofinishing or dry cleaning process – or may be related to the products you use, your business transportation, and the building space you occupy.

Service providers can even improve sustainability by reducing the need for a product entirely.  For instance, car-sharing organizations offer businesses and individuals “car use” services that substitute for fleet vehicle or car ownership. When several organizations share the same vehicles, fewer vehicles need to be produced than if all the organizations owned their own. This significantly reduces the need for materials, and reduces the energy and water used, and pollutants emitted during production. Service providers can look for ways to bring greater value to sustainability-conscious customers by reducing the impact of your service and by finding more ways to turn products into service opportunities. 

Action

Green Your Process

Even though not extracting, harvesting or manufacturing products, service providers still have processes that generate environmental and social impacts. To green your process, you will want to assess where your impacts are and take steps to reduce them.  Auto repair and photo finishing services, for example, have opportunities to substitute environmentally-friendly products:  high-volume low-pressure (HVLP) spray guns reduce the need for toxic cleaning solvents in auto body shops,^{Footnote 1} and photo finishing operations can install silver recovery technology to reduce the toxicity of their wastewater.^{Footnote 2} Waste hauling businesses, as another example, can recycle the materials they collect. 

Vancouver-based 1-800-Got-Junk, a residential and commercial junk hauling company, did just that.  It recycles up to 70% of the “junk” it hauls from customers, as compared to competitors who don’t guarantee any recycling, and a regional average per capita recycling rate of 55%.^{Footnote 3}

Reduce Purchasing, Transportation, and Building Impacts

If your business uses products to provide the service, assess the opportunities to provide a more sustainable service by engaging in green purchasing. For example, a cleaning business might offer green cleaning services by using ecolabel certified products. Find more information in the section on Green Purchasing.

If transportation is an important part of providing your service, look at reducing your transportation impacts. For instance, a green cleaning service might purchase alternatively fuelled vehicles or fuels, or implement driver training to reduce fuel use. Find more information in the section on Transportation.

If your business rents office or other commercial space, look at the opportunities to reduce your building impacts. For instance, a graphic design firm could reduce its energy use by installing efficient lighting and shutting down computer equipment when not in use. Find more information in the section on Buildings.

Offer Services That Substitute For Products

Service substitution is a means of “…shifting the mode of consumption from personal ownership of products to provision of services which provide similar functions….[promoting] minimal resource use per unit of consumption.”^{Footnote 4} For examples of service substitution, see Servicizing in Product Development.

Moving from a product to a service-based offering refers to a shift from selling hard goods to selling the function of a product or the service it provides, with the idea that fewer goods will be necessary to meet the same needs. Producing fewer goods leads to fewer environmental impacts in the manufacturing process, and less waste when products outlive their usefulness. For manufacturers and suppliers there is the potential to create more stable profits and improve revenue by selling services, and cutting material and energy costs while maintaining and growing the customer base.

Some products are better candidates for turning into services than others.  Electronic equipment and vehicles, for instance, lend themselves well to a service model (leasing) due to limited life spans and upfront costs that make them more expensive to purchase outright. Consumable products like paper and food, on the other hand, wouldn’t fit a service model.

A number of years ago Mountain Equipment Co-op, a Canadian outdoor gear retailer, moved into the service business when it began renting – rather than selling – outdoor equipment from its stores. This makes outdoor activities affordable to a greater number of people - for those that can’t afford to buy, or those who would like to test out a new sport without significant financial investment. It also reduces the need for more  production by the manufacturer of new outdoor equipment, with the environmental benefit of reduced material use, reduced energy use and reduced transportation emissions, since more people are sharing a smaller number of rented goods than if they all owned the goods themselves.

Another example is US-based Gage Products Co., a specialty chemical supplier for auto paint shops. Gage moved from solely selling chemical blends for auto painting to providing additional value-added services, helping auto body staff apply the mixtures properly, get through colour changes and reduce the need for solvents. This value-added service eventually attracted larger customers, such as Chrysler, which it helped to meet new environmental regulatory requirements, reducing pollution through reduced use of chemicals. For this and other examples of “servicizing”, see Sustainability Through Servicizing in the Resources section.

Communicate Your Sustainability Achievement to Customers

Service-based businesses have a greater challenge communicating their sustainability achievements to their customers. While a product-based business has both the attributes of their products (e.g., 100% recycled, biodegradable) and their sustainable operating practices to convey, a service-based business has only its sustainable operating practices. In order to effectively communicate your sustainable operating practices to your customers, it is important to measure and quantify your sustainability achievements. There are several ways to approach this. One is to measure, track and report on your company’s practices (see Measurement, Tracking & Reporting for more information). Another is to measure your operating practices against a recognized standard. Several ecolabel standards now exist for services.  By achieving the social and environmental standards of the third-party ecolabel program, you are able to incorporate the ecologo into your marketing efforts, communicating the authenticity of your claims to your customers.

Although ecolabels have long existed for products like paper and cleaning chemicals, they are becoming more prevalent for different services such as accommodation, carwashes, printing, restaurants, catering and other services (see the Resources section for details). If an ecolabel exists for your business type, consider that getting your business certified provides your customers with the assurance that your business is meeting a recognizable standard that they can count on.  Ecologo and Green Seal are two credible ecologo programs that follow rigorous and verification assurance procedures in the North American market.

Business Benefits

The many benefits of sustainability management are found in the Business Case. Focusing on sustainability in a service-based business can provide a number of specific benefits. If you green your process, you can reduce the costs associated with handling and disposing of hazardous materials. Providing services that replace products can build your market share and help diversify your business. Reducing the impacts associated with the products you purchase, your transportation or building use can save money and create better working environments for employees.

Resources

Service Substitution

MIT Sloan Management Review “Sustainability Through Servicizing” article reviews how companies can replace products with services as an integral part of their environmental strategy. ( PDF - 392.46 KB - 10 pages)

Ecolabels for Services
Green Seal certification for Hotels and Lodging, and Restaurant and Food Services

Ecologo certification for Accommodation Facilities, Commercial Carwash Services, Digital Printing Services, Office Facilities, Organic Turf Management Services, Packaging Management System-Beverage Containers, Refrigerant Collection and Disposal Programs.

Sustainability Through Product Service Systems & Servicizing (PDF - 229.31kb - 15 pages)

Industry Ecolabel Programs

Hotels: Hotels: Green Key Eco-Rating Program
Restaurants: The Green Table Network

More information on Ecolabels in Canada

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Footnotes

1. EPA. No Date. Community Information Sheet: Reducing Air Pollution from Auto Body Shops  (return to reference 1)
2. City of Toronto. No Date. Environmental Best Management Practices for Photo Finishing Operations in the City of Toronto  (return to reference 2)
3. Metro Vancouver. No Date. Zero Waste Challenge   (return to reference3)
   
4. Wikipedia. No Date. Sustainable Design: Service Substitution  (return to reference 4)