Mr. Sareen, who founded Omni United in 2003, said he has been having this conversation since in 2013.
Omni United, represented in the U.S. by Omni United (USA) Inc. of Traverse City, offers 2,300 SKUs — including 60 sizes for classic cars — in a range of brands such as Radar, Patriot, American Tourer, Tecnica, etc.
The tires are manufactured in several facilities spread out mostly across Southeast Asia and are available in more than 80 countries.
Omni United perhaps is the lone Tier 3 offering — the tier where Mr. Sareen wants to remain — to put so much focus and resources behind carbon neutrality.
The reasons, he said, are simple: Not only is it good for the environment and the future of the global ecosystem, it makes sound business sense.
One trend illustrates that: Carbon taxation.
Several countries have begun to levy a carbon tax on carbon emissions tied to the production of goods and services. In simple terms, the taxes are designed to incentivize companies to reduce their carbon footprint and in turn help improve and preserve the environment.
Several European countries are taxing companies for carbon emissions, led by Sweden, which levies a tax of $137 per ton of carbon emissions. Other countries that have followed suit include Denmark, Finland, Germany, Ireland, Italy, the Netherlands, Norway, Slovenia, Sweden, Switzerland and the United Kingdom.
Singapore also charges a carbon tax. Mr. Sareen said his company has absorbed the tax, which remains small at this point, but should Singapore raise the tax, and other countries follow suit, it could be catastrophic.
"If they impose a tax of, say, $5 (per metric ton)," Mr. Sareen said, "we'd be OK. But if that became $50 ... we are done. Out of business. This is something most businesses don't understand.
"The carbon tax can completely disrupt the situation."
Carbon emissions, he said, are generated in three ways: Production, consumption and disposal.
Production takes into account carbon emissions not only at the plant, but also in the delivery of raw materials to the plant. How is that plant powered?
Consumption covers the product from its delivery to the consumer to the vehicle that uses that specific product. What energy is used to deliver the products, i.e., how is the container ship powered? And how energy efficient are the vehicles that fit those specific tires?
Disposal accounts for the process to get rid of the product.
"You can measure these things, and that is called your carbon footprint," Mr. Sareen said. "How much are you actually emitting for a set of four tires?"
Major tire makers devote a significant portion of their resources to their sustainability goals, as documented in many annual reports. Group Michelin, for example, has pledged to lower CO2 emissions from all of its production facilities by 50% by 2030 compared with 2010, with the ultimate goal of achieving carbon neutrality by 2050.
Tire companies can reduce their footprint by, for example, converting a plant to a more efficient energy form from coal, but they also can accumulate assets that offset their carbon footprint and help improve their score.
Those assets include investing in agency-approved green projects, such as windmills, solar energy, etc. Another direction might be to plant trees or install solar panels, or perhaps deliver product on carbon-neutral vessels or electric vehicles from certain logistics carriers.
In order to address the issue, Mr. Sareen said Omni United will not contract with a tire plant powered by coal, and he is hoping to contract with cargo carriers that are more ecologically efficient.
Since Omni United's products are less expensive Tier 3 alternatives, they often are used on older, less efficient vehicles. That, he said, must change.
"As a company we will have to take steps into moving to a different direction from a product design perspective," Mr. Sareen said. "If your product is used in an electric vehicle, you have zero consumption."
Mr. Sareen said he believes all stakeholders in the industry must evaluate their businesses and move toward carbon neutrality. That includes the independent tire dealer in the U.S.
"Come up with your carbon strategy," he said. "Do you have a plan for your business to survive to 2050, or are you living on a day-to-day basis?"
He suggests dealers contact their bank and inquire about "green" loans. He said by sharing any type of carbon-neutral strategy, the lending institution might offer lower borrowing rates.
Omni United, he said, has done just that in Singapore.
"We have got ourselves qualified as a green company, so our borrowing rate has come down (significantly) at banks," Mr. Sareen said. "If you're doing a $100 million business, and you're playing the game well, you can save up to $400,000 to $600,000 just by lowering your borrowing cost."
He said for many of his customers in the U.S., "climate change and sustainability are not the priority for them."
But if dealers start making a change themselves, while asking companies they deal with to do the same, carbon neutrality could become a reality much sooner.
"If dealers, large (tire) customers in the U.S., start demanding, just as we are demanding ... if they start asking the question, 'What is your carbon strategy?,' that will collectively reduce the footprint.
"They're not producing tires; they're only selling tires. They are only redistributing tires. But they have a stake in this. That strategy becomes their common strategy.
"Plus, it can save them (carbon) taxation, which is sure to come."
