Responsibility rewards

It’s one of the great debates of our time: do companies and corporations have a responsibility to protect the environment and promote conservation? Of course, companies are legally obligated to conform to environmental legislation. But that’s not quite the idea. Put simply: is there a social responsibility to do more than the minimum? Can businesses become green leaders? It’s easy to answer “of course,” but it’s not so simple.

Companies have an obligation to shareholders to maximize their profits, and are expected to provide for things such as employee pension funds. Short of ensuring business operations don’t contravene environmental laws, is it fair or reasonable to expect companies to do more?

Some do. Some companies see themselves as constituent members of their local and global community, and are embracing social responsibility. Some companies are driving the unfolding green revolution, rather than lamenting how much it might cost them. GE, Google and Waste Management are three Fortune 500 companies with seemingly little in common beyond sheer success. So what do the world leader in power generation, a free Internet search tool and a waste company have in common?

The common thread linking all three – if you’ll forgive an obvious metaphor – is green. Each has put its money where its public spokesperson is, so to speak, and actively funds and supports green initiatives.

GE   Take GE. A huge corporation by anyone’s standards, its power division alone had $29.3 billion in revenue in 2008. With operations literally around the globe, GE deals in many different types of energy – including non-renewables such as coal and natural gas, but also significantly invests in and promotes solar, biogas, and in particular, wind.

Quite simply, GE is the world leader in wind power. In 2008, GE’s wind turbine business was approximately $6 billion, and has grown dramatically in a short period of time. As recently as 2005, GE was making about 500 turbines per year. GE expected to make more than 3,000 in 2008.

In total, it has installed more than 10,000 wind turbines around the world, comprising over 15,000 megawatts of capacity. GE manufactures turbines in its main facility in Germany, but also in Spain, China, Canada, and the US.

GE has also developed tools to help individual electricity consumers make better decisions. GE’s SmartMeter makes consumers aware of their energy use, especially during peak times. This enables time-of-use pricing, where applicable. The goal is to decrease peak-time energy use, which is more expensive, and increase energy efficiency, saving money for both utilities and their customers.

Waste Management   What’s more “brown” than trash? Waste management used to be about finding an empty field within trucking distance of a town, and filling it with stuff people throw away. Responsible waste management used to mean digging a pit first, so there’d be more space to throw garbage into. Waste Management is trying to do things differently.

Quite simply, Waste Management is trying to effect a culture change – trash doesn’t have to be brown. Indeed, their website ThinkGreen.com reflects a conscious paradigm shift. Trash can be green if it’s put to good use – but what use is trash?

Plenty, says Waste Management. A new facility will liquefy and purify landfill gas into natural gas, which will fuel garbage collection trucks. The first phase of the program will involve 300 trucks in California, reducing annual greenhouse gas emissions by 30,000 tons. The medium-term goal is to reduce Waste Management’s overall truck emissions by 15 per cent by 2020.

Google   It’s only appropriate for energy and waste companies to be more environmentally responsible – after all, they are best-placed to make the biggest difference. Companies in all sorts of divergent industries are taking steps to ensure they make the right sort of impact.

Take Google. Yes, the search engine. If it’s not immediately obvious to you how a free service provider can be financially successful, Google had over $16 billion of revenue in 2008 – mostly from online advertising.

Whereas GE figures it can best act responsibly by building and selling clean energy, Google funds and conducts energy research. For example, in October 2008, Google announced an ambitious plan to wean the United States off coal and oil by 2030, and to cut the use of cars by 40 per cent. Google’s contributions are more than theoretical. Google has also invested $45 million into wind, solar and geothermal start-up companies as part of its Renewable Energy Cheaper Than Coal campaign.

The big THREE are just the start…

Are those the only three companies seeking to do something about the environment? Far from it. Many smaller companies further from the green industry are greening up their business.

Take the National Bank as an example. The Drive Eco program, launched in September 2007, plants trees on behalf of its young drivers customers. The amount and type of trees depends on the model and make of the car, specifically calculated to offset the vehicle’s carbon dioxide emissions. In less than two years, more than 5,000 trees have been planted, reforesting five hectares of land – about 10 football fields.

Other companies aren’t just taking action to be more environmentally responsible, they’re keeping track of companies that do – and don’t – make a similar effort.

The Conference Board of Canada, for example, analyses corporate responses to the Carbon Disclosure Project (CDP) and publishes a report. The top 200 companies listed on the Toronto Stock Exchange are encouraged “disclose information on the financial and business implications of climate change risks and opportunities, greenhouse gas (GHG) emissions accounting, and GHG management strategies to institutional investors.”

The annual report illustrates the actions companies are taking to combat, or at least adapt to, climate change. The trends are encouraging; each year, more companies participate – 55 per cent in 2008, up from 45 per cent the previous year, and 28 per cent before that.

What’s more, there seems to be a general sense among companies that change is needed, and steps are being taken. To that end, almost half of the companies report having implemented formal greenhouse gas emissions reduction plan or policies , and more than half have established committees with mandates to track and seek ways to reduce greenhouse gas emissions.

Corporate responsibility used to be seen as a humorous oxymoron; like military intelligence, or civil war. Increasingly, however, independent companies and corporations are taking steps to, at the very least, mitigate their environmental footprints and reduce their harmful emissions. Sometimes “the man” isn’t so bad after all.