Movie Making For Profit

Why Sustainable Businesses Can Both Profit And Pay It Forward [Video]

Business Reporter talks to Swedish engineering firm Sandvik about how sustainability and financial success now go hand in hand.

Innovation, business and the improvement of the human condition have long been intertwined. When George Westinghouse and Thomas Edison competed for the contract to electrify America in the 1880s, their motivation was money. But electricity also lit up dark streets and modernised households.

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What this and forthcoming decades must now add to the equation is planet Earth. We are at a critical juncture, when pursuing profitable growth without factoring in the protection of the environment is simply not enough.

Sandvik, a high-tech global engineering group, is one company spearheading this shift within its own industry. The firm develops and manufactures tools and tooling systems for advanced metal cutting, as well as advanced materials such as stainless steels and alloys. It also produces equipment and software solutions for the mining industry.

Engineering firms aren’t often associated with environmental causes, but they’ve long been a big part of Sandvik’s operations. “At Sandvik, energy consumption and environmental considerations are critical to product and process development,” says Tomas Eliasson, Executive Vice President and CFO.

Additive manufacturing is a case in point. By leveraging cutting-edge 3D printing technology for components in complex shapes and forms, layers of materials can be added, rather than machined or cut away, thus reducing resource and energy needs as well as waste. As well as improving productivity, combining legacy methods with additive manufacturing also makes Sandvik’s operations more sustainable.

From corporate responsibility to sustainable business

Before extreme weather incidents and harrowing pictures of environmental pollution threw sustainability into sharp focus, we had corporate responsibility. Corporate responsibility was typically seen by businesses as little more than a compulsory exercise that added costs, brought no benefits and eroded competitiveness. But these days, if businesses are to be truly sustainable, says Eliasson, the subject must be paid more than just lip service. “Sustainability should never be considered an add-on by any business,” he explains. “Rather, it needs to be fully integrated into everything we do.”

Sustainability certainly seems to be the most important driver of research and process development within Sandvik. “We understand the need for the world to make the shift to new business models and new thinking in line with the UN’s Sustainability Goals and the Paris Climate Agreement,” says Björn Rosengren, President and CEO.

So much so that Sandvik has set itself the target of achieving 90 per cent circularity by 2030. To avoid the traps of blue-sky thinking, it has also implemented a system of enablers such as the Ideas Hub, a sustainability ideas programme, and the Sustainable Business Partner award, while also incorporating the milestones of its sustainability programme into its performance management system.

The business case for sustainability

Sandvik has a line in many products intended to both provide a safer workplace for employees and reduce ecological footprints. Its electrified and automated mining machines enable human employees to work from the surface, cutting diesel emissions to zero. The company buys back drills and inserts from its customers after they lose their cutting quality and recovers precious tungsten and cobalt from them.

All these processes make perfect business sense too. For example, making tools from recycled cemented carbide, the number one cutting tool material, requires 70 per cent less energy than making them from virgin materials; compressors fitted with Sandvik’s proprietary valve steel are up to 50 per cent more energy efficient.

In January 2019, the World Economic Forum officially selected Sandvik’s plant in Gimo, Sweden as a “lighthouse” site, one that “comprehensively deploys a wide range of industry 4.0 technologies and use cases at scale, while keeping humans and sustainability at the heart of innovation”. Further proof, perhaps, that technological advancement and sustainability can go hand-in-hand to pave the way for dynamic long-term profitable growth.

This article originally appeared on Business Reporter.

In a defeat for CenterPoint, proposed settlement cuts rate hike and profits

 © Yi-Chin Lee, Houston Chronicle / Staff Photographer

CenterPoint Energy, the regulated utility that distributes most of the electricity in the Houston area, agreed to accept a lower rate hike and a lower profit margin, according to a settlement agreement the utility filed with state regulators on Thursday afternoon.

CenterPoint Energy, the regulated utility that distributes most of the electricity in the Houston area, accepted a smaller rate hike and a profit margin even lower than it currently has in a settlement filed with state regulators Thursday afternoon.

CenterPoint agreed to a $13 million rate increase, according to the deal with large power users, retail electricity sellers and a coalition of cities.  It is unclear what the effect will be on residential power bills.

The utility was seeking a $161 million rate increase that would have raised electricity bills by $2.38 a month for customers using 1,000 kilowatt hours of power. CenterPoint said it needs the additional revenue to pay for new electrical transmission lines to accommodate Houston's population growth, improve the reliability and resiliency of the electric grid and make repairs related to Hurricane Harvey.

CenterPoint asked regulators when it filed its rate increase request in April to boost its allowed rate of return, a proxy for profits, to 10.4 percent from 10 percent, which was set a decade ago. CenterPoint agreed on Thursday to accept a 9.4 percent return on equity, according to the agreement.

The agreement has to be approved by the Public Utility Commission which is expected to take it up next week.

The request for a rate increase was made as part of a review by regulators to determine if the utility made prudent investments over the past decade and is entitled to revenue hike. CenterPoint has 2.4 million customers in the Houston area.

1997 hit 'Men In Black' is still yet to make a profit says screenwriter

Men In Black, the 1997 sci-fi comedy starring Will Smith and Tommy Lee Jones, remains in the red despite making $589 million (£448 million) at the global box office over 20 years ago. Adjusted for inflation, that translates to $944 million (£718 million) in 2019 money, not taking into account extra ticket prices for 3D or IMAX.

This is according to the film’s screenwriter Ed Solomon, who adapted Lowell Cunningham’s comic book seriews for Sony Pictures, who then turned it into a mega-blockbuster with a $90 million (£68 million) budget that spawned three sequels and an animated series, not to mention shifting piles of merchandise.

Solomon, who also wrote all three Bill & Ted films, Now You See Me, and Charlie’s Angels (2000), shared on Twitter that he had received his “Men In Black profit statement” from the studio over the festive period which said that the film had lost “6x what it lost last period”, linking back to a previous tweet from June this year that said the film was “STILL in the red”.

Other filmmakers responded to Solomon’s post to complain about similar cases of creative accounting.

Read more: The biggest box office hits and misses of 2019

Jonathan Goldstein, one of the screenwriters of Spider-Man: Homecoming, said the $880 million-grossing Marvel movie was also “losing money” according to statements.

Source Code director Duncan Jones replied to the writer saying he was still owed “$50k of deferred payment” for his film that was produced by Summit Entertainment, a Lionsgate subsidiary.

Katherine Fugate, the creator of Army Wives, says the problem isn’t just isolated to movies either, saying her ABC series never made any money despite running for seven seasons on a commercial television network.

Film studios like Sony often negotiate “back end” deals with creatives that offer a cut of a film’s gross profits: ie when they get into the black. However, due to the complicated way films are financed, distributed, and advertised, some huge films technically never make a penny. Negotiating a deal for net profits is a safer bet for creatives.

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LOS ANGELES, CA - JUNE 15: Screenwriter Ed Solomon speaks onstage at Coffee Talks: Screenwriters during the 2014 Los Angeles Film Festival at Luxe City Center Hotel on June 15, 2014 in Los Angeles, California. (Photo by Araya Diaz/WireImage)

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In 2010 it was revealed that 2007’s Harry Potter And The Order Of The Phoenix, which grossed $938.2 million worldwide, was still over $167 million in the red. David Prowse, the actor who played Darth Vader in the original Star Wars trilogy, similarly never received residuals from Return of the Jedi, as Lucasfilm claimed the film never made a profit despite earning $572 million worldwide. 

Read more: Men In Black-Jump Street crossover no longer happening

Profit disputes between New Line Cinema and Peter Jackson, the director of The Lord Of The Rings trilogy, delayed the production of The Hobbit trilogy, and led to actors from the film suing the studio over unpaid profits.

Despite Men In Black’s apparent losses, Sony still released a fourth film earlier, but Men In Black: International was a flop with audiences, earning $254 million against a $110 million budget.