In the last few years, many multinational corporations and US businesses have committed themselves to addressing climate change. Large companies are able to use their market power to influence the types of products consumers buy. Some companies have realized this, and are now leveraging their market power and offering increasingly environmentally friendly products to their customers. For example:
• Home Depot, one of the largest suppliers of lumber in the US, has decided to sell only certified wood (wood that has been harvested in a sustainable way) in its stores (Mangu-Ward, 2006).
• Wal-Mart is using its market power to educate consumers about climate-friendly approaches. For example, they are featuring more efficient electrical products in their stores, and are significantly increasing the number of organically grown cotton products they sell (Ruben, 2006).
Neither Home Depot nor Wal-Mart would have been able to produce such a large effect on the products consumers buy if they did not control such a large share of their respective marketplaces. Although not as large, hundreds of other businesses around the country are also voluntarily reducing emissions, using sustainable products and becoming more environmentally aware.
Perhaps most importantly, many corporations are now investing millions of dollars in alternative and renewable energy sources. Over US$48 billion was invested in renewables in 2005, and that number was expected to reach US$60 billion for 2006 (Wasik, 2006). Venture capitalists in the US invested over US$1.4 billion in clean technology markets in 2005, markets that produce global annual revenues of US$150 billion each year (Roosevelt, 2006).
The following examples give an indication of the many positive actions that are being initiated in the energy production, transportation, technology/industry and financial sectors.
BP was the first major oil company to acknowledge publicly that climate change is a serious threat. It is working to increase its efficiency and reduce its own greenhouse gas emissions (Hertsgaard, 2006). In addition, it has created an Alternative Energy Division and has pledged to invest up to US$8 billion in clean energy over the next decade (Roosevelt, 2006). Although some critics contend that BP's investments in green technologies have been aimed at improving their reputation rather than accomplishing anything substantial, the evidence proves otherwise. BP tops the list put together by Ceres (Investors and Environmentalists for Sustainable Prosperity) ranking multinational firms in their adoption of climate-protecting steps (Cogan, 2006).
Other energy companies are taking substantial steps: Shell has become an investment leader in hydrogen and is spearheading such efforts in the US and Iceland; Chevron currently invests more than US$100 million each year in alternative energy and has included clean technologies in its energy portfolio (Cogan, 2006). Others are following their leads.
Toyota, the largest non-US auto company, has committed itself to meeting the emissions reductions called for in the Kyoto Protocol and is reducing greenhouse gas emissions at its facilities. In addition, it plans to offer hybrid options for all of its major models by 2010.
GM, the world's largest auto manufacturer, has also started to turn its attention to alternative energy and fuels. It has already invested more than US$1 billion in developing fuel cell technology and has increased its inventory of vehicles that run on bio-fuels (Cogan, 2006).
IBM participates in the Chicago Climate Exchange, the only voluntary but legally binding greenhouse gas trading system in North America. It also purchases 4 per cent of its US electrical needs from renewable resources (IBM, 2005).
DuPont has been a corporate leader in addressing climate issues. It has reduced its greenhouse gas emissions by 72 per cent since 1990, and is developing energy-efficient building materials and low-emitting refrigerants. DuPont's energy conservation strategies have actually saved the company over US$3 billion. 'What started as an effort to address our carbon footprint has turned out to be financially a very good thing', explains DuPont Vice-President Linda Fisher (DuPont News, 2006).
GE recently introduced its 'ecomagination' campaign, and plans to invest US$1.5 billion in green technologies annually. The initiative generated revenues of US$10 billion in 2005 alone and the company expects to double this to US$20 billion by 2010. GE's wind power program appears to be especially promising; it operates over 7000 wind turbines worldwide already and the number is growing rapidly (GE, 2006). This US$2 billion program is expected to grow to US$4 billion shortly (Eizenstat and Kraiem, 2005; Deutsch, 2006; The Economist, 2006; Roosevelt, 2006).
J. P. Morgan, a leading provider of financial services, has established an 'environmental policy' that outlines the socially responsible conduct that the company will follow concerning the environment. In addition, it has pledged to invest US$250 million in wind power initiatives (Deutsch, 2006).
Goldman Sachs has also committed itself to combating global warming. In their 'Environmental Policy Framework', the company has committed to reducing greenhouse gas emissions from their offices by 7 per cent (the Kyoto Protocol requirement for the US) by 2012. It will also promote market formation for emissions permits and renewable energy credits, and will invest up to US$1 billion in renewable energy and efficiency programs (Goldman Sachs, 2005). According to a spokesperson for the company, it is 'well on its way' to reaching the US$1 billion investment goal (Deutsch, 2006).
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