U.S. companies dig into coffers to go green

By Chelsea Emery - Analysis

NEW YORK (Reuters) - U.S. industrial companies are spending heavily on environmentally friendly efforts even as the economic slowdown dents their profits.

Fueling the "green" trend are hopes that products that are made of recyclable materials or use less energy will win praise, forestall onerous regulation and cut rising costs.

In particular, oil prices have jumped more than 20 percent this year.

"Oil for $116 a barrel is staggering," said Donald Young, a spokesman for the International Facility Management Association professional group. "Companies are forging ahead."

For example, building maintenance supply company W.W. Grainger Inc says its manufacturing and industrial customers are clamoring for the energy-efficient lights, high-efficiency water faucets and even waterless toilets it sells through its catalog and Web site.

"I'm not seeing any evidence of customers cutting back (on the purchase of green products)," said Patrick Davidson, senior vice president for sales and marketing.

Indeed, Grainger's sales of such products rose 20 percent in the first quarter from a year earlier, compared with a 7 percent revenue gain overall, a company spokesman said.

At Home Office Solutions Group, which sells furniture to small businesses, sales of green products are "going strong" even as its customers' average purchase has declined, Chief Executive Mark Levin said.