Going Green Only When It’s Convenient
Jim Prevor’s Perishable Pundit, September 20, 2007
Everyone is into “green”:
- Hannaford announced it will build a “Green” supermarket that will obtain the “Platinum” designation, the highest there is of the U.S. Green Building Council.
- United Natural Foods sent us an invitation to a dedication of “California’s fourth largest solar panel system.”
- Tesco is building a larger array on the top of its distribution center.
- Safeway is putting solar panels on stores.
- Wal-Mart has prototype “green” supermarkets and intends to build additional models.
The big question we are wrestling with here is what will it all boil down to?
We suppose some definition is in order. Although some people want to trumpet that being “green” is good business, we can’t accept that doing things simply because they provide a good return on investment deserves some special praise.
An interesting piece in The Wall Street Journal chronicles how General Electric is dealing with CEO Jeffrey Immelt’s push to make GE a leader in addressing climate change. Part of the issue, of course, is that unlike in produce where the initiatives are typically retail driven, GE is a supplier of many goods and services:
Two years ago, General Electric Co. Chairman Jeffrey Immelt vowed to make GE a corporate leader in addressing climate change. Since then, Mr. Immelt says, he’s heard a refrain from some big GE customers: “’Can’t you just shut up and sell us stuff?’ That would be a paraphrase, maybe with a few blanks in between.”
Of course, although Mr. Immelt is a major corporate advocate for “green” policies, he has his limits. Like things that might limit business:
…he himself is willing to push GE only so far. “I don’t want to change the economic flow of the company,” Mr. Immelt says. So GE continues to sell coal-fired steam turbines and is delving deeper into oil-and-gas production. Meanwhile, its finance unit seeks out coal-related investments including power plants, which are a leading cause of carbon-dioxide emissions in the U.S.
Despite these hitches, GE certainly is trying to get the maximum PR value out of its efforts:
…these limitations haven’t stopped GE from making a big marketing to-do of its commitment to the environment. Indeed, the primary focus of the conglomerate’s marketing efforts these days is a $1 million-a-year campaign to publicize its search for “innovative solutions to environmental challenges.”
GE has dubbed its campaign “ecomagination,” and Mr. Immelt calls it a success. GE is on track to sell $14 billion of its self-described environmentally friendly products this year, and projects the total will grow more than 10% annually through 2010. GE says it reduced its own greenhouse-gas emissions by 4% between 2004 and 2006, even as revenue grew 21%.
Yet to GE’s CEO, this is not a moral crusade:
Mr. Immelt says global warming isn’t a moral issue for him. “I never put it in right versus wrong,” he says. Rather, he believes that making changes to address potential climate change is a political necessity.
He also thinks there will be a governmental climate change policy and wants to get a seat at the table:
Mr. Immelt wanted GE to help draft government rules on climate change, instead of playing defense as it had … “We are much better as a company getting ahead of [climate-change policy] than we are pretending like it doesn’t exist,” he says.
Not everyone at GE is a believer and some seem to fall back into “I just do my job” mode:
Inside GE, some of Mr. Immelt’s top aides cautioned him to move slowly; others were skeptical about the science of climate change. Mr. Immelt says he initially had few supporters within the company.
The skeptics included GE’s lead regulatory lawyer Steve Ramsey, whom Mr. Immelt had put in charge of developing the emissions inventory. Mr. Ramsey suggested his staff lawyers read a speech by novelist Michael Crichton, in which the author compared belief in global warming to religious fanaticism.
A former EPA lawyer, Mr. Ramsey says, “I’m not a scientist. I’m an English major and a lawyer.”
An awful lot of the green initiative seems to focus on selling stuff, and to what degree those products are really environmentally friendly is unclear:
Mr. Immelt launched his campaign in May 2005. In a speech at George Washington University, he said GE would “develop and drive the technologies of the future that will protect and clean our environment.” Mr. Immelt pledged to double investments in energy-efficient technologies to $1.5 billion by 2010 and projected $20 billion in annual sales of products like solar panels, wind turbines, and lower-emission locomotives.
GE works with GreenOrder, an environmentally focused marketing consulting firm, to “certify” the products’ environmental benefits, then wraps them in its ecomagination label. GreenOrder also advises BP’s Americas unit and Office Depot Inc. How much credibility a GreenOrder certification carries with environmental groups isn’t clear.
Some of the green products are just the same old products:
Many of GE’s ecomagination products, such as fuel-efficient aircraft engines, locomotives and gas turbines, were already on the market or in the lab before the campaign.
And they are not making any green products to lose money:
But he stresses that the projects must make economic sense. “We invest in the basic strategies that we think are going to fit into [the program], but make money for our investors at the same time,” Mr. Immelt says.
GE opposes green initiatives when they would hurt its business:
Mr. Immelt’s environmental campaign poses new public-relations quandaries. Especially troublesome are proposals in several countries and California to ban incandescent light bulbs — the technology that made GE founder Thomas Edison a household name. Backers of a ban favor fluorescent lights, which use far less energy.
GE makes fluorescent bulbs, but scrambled to protect its much-larger incandescent business. Lobbyists sought to shift the debate to efficiency standards for lighting, rather than a bulb’s technology. GE also announced — several years ahead of schedule — plans for an advanced incandescent bulb that would use half as much energy. But that met with a mixed reaction, as some advocates accused GE of trying to thwart a move to fluorescents.
Lloyd Alter, a columnist at environmental Web site treehugger.com, labeled GE’s new technology a “vaporbulb” and accused the company of trying to “knock the wind” out of the movement to ban incandescents. Mr. Alter later tempered his criticism, after meeting with several GE officials.
There is a lot more, such as many battles over how to measure GE’s own emissions and questions about how GE’s giant financing unit plays into all of this. For example, if GE finances a power plant, do the emissions wind up on its report record?
In the end it comes off as a kind of cynical effort. It is profitable, however, in the sense that it burnishes an image, sells certain products and, for a corporate giant such as GE, is a way of addressing a political reality.
This strikes us as a real danger of many sustainability efforts. If a company only does Green things as a prototype to learn from and get PR or, alternatively, only when it is profitable, how does that show consumers that a company’s owners or executives care about something?
And if they don’t care about it, well, how can it motivate a consumer to want to affiliate with that store or by shopping there?
Read the article here.