If you look at it from oil companies' point of view, effectively what they're doing at the moment is continuing business as usual, and sticking toes in water in a number of areas which might become important in future. But at present there is a relatively poor business case for making significantly greater investment in these new areas if we can call them that, so when I agree that they may not be investing enough, that is if you like the point of view of a citizen of the world rather than a shareholder in one of the companies.12
Recent events suggest that Shell, having dabbled in energy alternatives, has decided their core interests remain in oil. The company announced in March 2009 that it will no longer invest in renewable technologies such as wind, solar and hydro power on the basis that they are 'not economic'. Linda Cook, Shell's executive director of gas and power, said 'We do not expect material investment [in wind and solar] going forward.'13
Other companies nevertheless followed the lead in taking voluntary action on climate change to reduce their emissions, capitalising on the economic savings to be made and the public relations credit to be earned from being seen to take a lead on the issue. Chemicals giant DuPont reduced its emissions by 65% below their 1990 levels, while IBM has saved $115 million since 1998 through cutting its carbon emissions.
One of the highest profile examples has been General Electric's Ecomagination initiative announced in 2005. This involved GE doubling investment in research for cleaner technologies to $1.5 billion a year by 2010, doubling sales of environmentally friendly products to at least $20 billion by 2010 and reducing GHG emissions by 1% by 2012 from 2004 levels. It has received resounding praise from environmental NGOs and the business sector alike. The company is also being rewarded financially, with revenues from the company's portfolio of energy efficient and environmentally advantageous products and services exceeding $12 billion in 2006, up 20 per cent from 2005.14
12 David Strahan, author of The Last Oil Shock, interview with Lord Oxburgh. See http://www.davidstrahan.com/blog/?p=40, accessed 19 December 2009.
13 T. Webb, 'Shell dumps wind, solar and hydro power in favour of biofuels,' The Guardian, 17 March 2009. See http://www.guardian.co.uk/business/2009/mar/17/ royaldutchshell-energy, accessed 19 December 2009.
14 GE Eco-imagination report, 'Investing and Delivering on Eco-imagination', 2007. http://ge.ecomagination.com/site/downloads/news/2007ecoreport.pdf, accessed 19 December 2009.
Ecomagination was driven by GE's CEO Jeffrey Immelt, who pushed the issue upon taking his post in 2001. He argued that GE was operating in a rapidly changing environment where it had to deal with diminishing domestic oil and natural gas supplies, consumer demands for efficient products and the need to deal with climate change. To remain competitive, GE required a radical change in technology and products. Also, he maintained that instead of being defensive in relation to this changing reality, GE should go on the offensive and take a leadership role in reducing outputs and developing environmentally friendly products that reduce emissions.15
For many conservatives such talk was almost blasphemous and highly risky. When under attack from them about his company's proactive stance on climate change Immelt protested, 'Look, I've never voted Democrat, I work for investors!' He was speaking at the 'ECO: nomics' conference in California where he was joined by CEOs from Wal-Mart, Duke Power and Dow Chemicals in making the argument that federal action to cap GHGs 'will unleash entrepreneurs and big business alike to move America towards a clean-energy economy'.16
making the case for business action
A number of NGOs such as the Climate Group in the UK and the Pew Center in the USA have played an important role in making the business case for action on climate change and publicising the benefits achieved by existing leaders in the field. Some companies such as BP and Shell have gone so far as to establish their own intra-firm trading systems that encourage competitive reductions between different parts of the company. This carries benefits such as saving money through reduced use of energy, first-mover advantages that come from developing new technologies and production processes, and public and employee credibility from being seen as an environmentally responsible company.
Given this array of business initiatives, some go so far as to claim that governments are already being outdone by corporations,
15 'G.E. CEO Immelt Is Bullish On Profitability of Ecomagination'. See http://www. verdexchange.org/node/82, accessed 19 December 2009.
16 'GE, Wal-Mart chiefs renew 'green' vows'? See CNNMoney.com, http://money. cnn.com/2008/03/14/news/newsmakers/gunther_scott_immelt.fortune/index. htm, accessed 3 October 2008.
Making the case for business action
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