The last few years have witnessed a sea change in corporate attitudes about global climate change. With the strategic advantages of climate-friendly practices in sight, companies are no longer considering whether or not they should "go green," but how. Some of the world's biggest corporations are taking the lead.
 | Green StrategiesCompanies like General Electric or BP have totally rebranded to highlight their environmental efforts. Ecomagination is the |
For many corporations around the world, green is “in.” Reducing the environmental impacts of products, services, and operations has become a top boardroom priority for many businesses. Not only does climate-concerned behavior help companies demonstrate environmental leadership; “green” corporations can also gain a competitive advantage through market differentiation, increased market share, or being identified as preferred suppliers.
With these advantages in mind, General Electric (GE), the world's largest corporation, has initiated one of the most ambitious corporate environmental commitments to date.
"Green is green”
In May 2005, GE Chairman and CEO Jeff Immelt unveiled “ecomagination,” an environmental strategy and marketing initiative designed to generate significant profit growth from climate-friendly products and services.
“We will establish partnerships with our customers to tackle their most pressing environmental challenges,” said Immelt when unveiling the program. “And we plan to make money doing it. Increasingly for GE’s business, ‘green is green’,” said the CEO, highlighting the connection between eco-friendly business and profit (in the form of green-colored US dollars).
With “ecomagination,” GE plans to double its research investment in clean technologies to 1.5 billion US dollars by 2010. Meanwhile, the firm has set a five-year target to double its current ten billion US dollars in annual revenues from climate-friendly products and services. GE has also set ambitious targets for improved energy efficiency and cuts in greenhouse gas emissions.
Energy efficiency and emissions reduction are also important issues at other major corporations. For instance, energy efficiency measures helped British Petroleum (BP) to reduce operational emissions by ten percent between 1998 and 2001. In 2004, the company launched a five-year, 350 million US dollar program to develop technologies and processes that will reduce BP greenhouse gas emissions by an estimated one million tons each year.
Going even further, Dupont has established a goal of reducing its emissions to 65 percent below 1990 levels by 2010.
Petrochemical industry: turning to alternative energy sources
Realizing the potential of green power technologies, the petrochemical industry has also started to build business in renewable energy development in recent years.
Shell Renewables, for example, is among the world’s top-five investors in solar power, among the top-ten producers of wind energy, and has established itself as the world’s largest marketer of biofuels. Since 1997, the company has invested about one billion US dollars in renewables.
Likewise, BP announced last November that the company’s Alternative Energy unit will manage an investment program in solar, wind, and hydrogen power generation, which could amount to eight billion US dollars over the next ten years.
Doubling its investments in alternative energy, BP aims to create a low-carbon power business with the growth potential to deliver revenues of around six billion US dollars a year within the next decade.
“We are focusing our investment in alternatives and renewables on power generation because it accounts for over 40 percent of man-made greenhouse gas emissions, the biggest single source. It is also the area where technology can be applied most cost-effectively to reduce emissions,” said BP chief executive Lord Browne when announcing the program last November.
Financial and advisory support for corporate “greening” endeavours
Companies have acknowledged that “greening” their businesses is not only good for the environment, but that it also provides a first-mover advantage, and facilitates access to target markets. No matter how worthwhile the endeavour, however, financial advice and consulting should be sought.
Financial service providers like the Allianz Group specialize in putting an environmental management plan into place. “With our expertise in insurance, banking and asset management, we assist our clients with the development of green business strategies in an innovative and profitable way,” says Armin Sandhoevel, Coordinator of Allianz’ Climate Core Group.
“For instance, we advise them on their carbon risk exposure and offer investment opportunities in renewable energies. Our business interest is to position them profitably in an environmentally responsible marketplace.”
editor: Julia Leuffen
publishing date: March 15, 2006
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