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Few people are aware of 3M's (MMM) reach in everyday life. Nearly half of the world's population encounter 3M products each day, from Post-it notes to cleaning sponges, and from water filters to reflective sheeting for road signs. The manufacturer generated $25.3 billion of revenue last year from selling 69,000 products. Its sales in China, in particular, have expanded at an annual rate of 25% since 2000, reaching a total of $1.5 billion in 2008.
3M was among the first multinational companies to make environmental protection a corporate-wide priority—a decision that would eventually have big implications for China. Back in 1975, it launched the Pollution Prevention Pays (3P) program, setting the trend in motion. These policies were transplanted to China in 1984, when the company first set up operations in Shanghai. "At 3M, environmental protection is the core of our culture," says Kenneth Yu, chief executive of 3M China.
Thousands of 3M products made in China are environmentally friendly. Post-it notes contain 20% recycled paper, while reflective sheeting used for traffic signs is made without chemical solutions or adhesives. Each LCD TV set using 3M's Vikuiti brightness enhancement film uses 36.5 kilowatt hours less electricity per year, on average, than similar TVs that don't use the film, according to 3M estimates. The company estimates that Viuiti, if applied to all TV sets, could help cut global power use by 57.5 billion kilowatt hours each year, equivalent to 33 million barrels of oil or 23 million tons of coal consumption.
In 1994, well before the Chinese government instituted environmental standards, 3M installed China's first thermal oxidation furnace to cut toxic emissions and save energy by recycling excess heat. Since 2000, 3M has rolled out 98 3P projects in China, reducing output of poisonous gas by 17,000 tons, the company estimates. 3M China also keeps track of its supply chain and audits suppliers regularly to ensure they meet 3M's global environmental standards. "We evaluate potential suppliers, looking for management systems in place," says Keith Miller, 3M's manager for environmental initiatives and sustainability based in the U.S. "We have been a leader in Asia as far as applying our standards and auditing our suppliers."
There is a real payback, 3M contends. The 3P projects have incrementally saved 3M China more than $48.6 million in costs and increased positive brand recognition since 2000, the company says. "3M was selected [for BusinessWeek's Greener China Business Award] not only for its strong green focus reflected in its innovative products but also because of its long record and large number of projects specifically carried out in China," says Robert Wu, chief executive of the U.S.-China Green Energy Council, and a judge for BusinessWeek's Greener China awards.