7 Corporations Going Green to Boost Their Bottom Lines
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This article is extracted from Inverse. Written by Eleanor Cummins.
Historically, multinational corporations have been the target of environmental activists: Faceless, gas-guzzling conglomerates blatantly pursuing profits are hard to love, or persuade to change. But slowly, a few companies that rule large parts of the world and our lives are becoming shining examples, not out of concern over climate change as much as increasing the bottom line.
If you go back to 2016, the price of renewable energy like solar and wind dropped below the cost of fossil fuels like coal and natural gas for the first time. This dip, coupled with substantial government subsidies for energy alternatives and a surge in the number of consumers who prefer sustainable products, has made going green good business.
Take Walmart. The retail behemoth, which has 11,695 stores in 28 countries, isn’t exactly known for its ethical business practices. It’s driven family-owned business bust, been forced to pay-out in numerous lawsuits alleging dangerous workplaces, and back in the 1980s and 90s, famously took out life insurance policies on many of its employees.
But more recently, the company has found clever ways to increase its green energy production — without, of course, taking on any additional economic risk. As of 2015, the company had installed 105 megawatts of photovoltaic panels on the roofs of its stores. It promises to double that by 2020.
Walmart has also found ways to cut down on the electricity bill in its warehouses, where it stores goods that will be sold online. For example, the company relies heavily on Plug Power to supply many of its forklifts. Instead of running on gas combustion or even electricity, Plug Power forklifts use hydrogen fuel cells to keep things moving. And Walmart’s choices are affecting its competitors, however incrementally. In April, fellow online retailer Amazon bought stock in Plug Powerin hopes of reducing the 25 percent of a warehouse’s electricity bill spent fueling forklifts.
When tech company Apple began building its new spaceship-like campus in Cupertino, California, CEO Tim Cook said Apple planned to construct “the greenest building in the world.” There’s no way he achieved that goal, but the new $5 billion office building for 12,000 of Apple’s employees is full of environmental good will nonetheless.
The campus reportedly has 7,000 trees designed to be drought-resistant and nourished by a water recycling system. Natural ventilation has been incorporated to eliminate artificial cooling or heat for the majority of the year. And the whole operation’s run on 100 green energy, courtesy of 17 megawatts of rooftop solar panels.
Sure, Apple’s efforts could curb its greenhouse gas emissions and better the world in the process. And that’s one large part of their stated motivations. But by taking control of energy production at its Cupertino headquarters — and in other Apple facilities around the world — the company has the opportunity to cut costs and, crucially, steel itself against fluctuations in energy pricing that vary widely year to year.
Gordon Gecko may have said “greed is good,” but those succeeding him on Wall Street are more inclined to say “green is good.”
Goldman Sachs is one of several banks, including Bank of America, to join RE 100, which commits powerful companies to the pursuit of 100 percent renewable energy. According to RE 100, Goldman aims to reach meet its renewable energy goal by 2020.
Goldman is also using more traditional banking strategies to drive environmental goals. It allows customers to focus on socially responsible investment strategies that seek to enable people to make money by fueling the growth of feel-good industries like solar energy and equitable housing development. At the end of 2016, the bank had $6.5 billion in assets under socially responsible management. Of course, Goldman still offers plenty of not-responsible investment strategies, too. How else could the company’s total assets under management top $240 billion?
Given its official mascot is a polar bear, it’s only logical that Coca-Cola would eventually get involved in environmentally-responsible business practices. The company’s current sustainability commitments require more responsible sourcing of agricultural products, a 25 percent cut to the carbon footprint of its drinks, and a lot of changes to how Coca-Cola treats water.
In 2015, Coca-Cola used 300.19 billion liters of water in manufacturing and the final drinkable product. But that same year, it returned 145.88 billion liters through wastewater treatment processes alone.
According to Mother Jones and others, Coca-Cola says this matters not because it looks good, but because without water, its products would be literally impossible. With 1.1 billion people already struggling to access clean water and rising temperatures and populations only exacerbating water scarcity issues, it seems another water-wasting soda bottling plant wouldn’t be just tacky. It’d be dangerous.
Apple isn’t the only tech company going green. In the United States, two percent of the nation’s total energy usage goes directly to fueling data centers, according to the U.S. Department of Energy. And someone has to pay.
HP relies on such data centers to store and process immense amounts of electronic information. It has long sought to produce their own renewable energy in the hopes of cutting data storage costs.
In 2015, HP inked 12-year contract with SunEdison, which will provide HP enough energy to operate all of its data centers in Texas. “The most sustainable programs are the ones that are win-win,” George Favaloroof Pricewaterhouse Coopers Sustainable Business Solutions told Marketwatch in a report on the HP contract at the time. Microsoft, Google, and others have worked to do the same.
Investing in renewable energy makes sense for companies storing large amounts of data for another reason, too. If a data center loses power, like one of Google’s facilities in Europe did in 2015 companies like HP stand to lose hundreds of thousands of dollar, even if the disruption lasts only a few minutes. By diversifying their sources of power — having, say, both their own windmills and access to a local grid — adds an extra layer of protection against such a catastrophe.
Though many more established companies are catching on, the pivot isn’t easy for those entrenched in the automotive industry. Ford, for example, has had to trim its budget in order to find ways to finance research on electric vehicles and General Motors missed the mark on its 2016 goals to increase fuel economy in its fleet.
Much of Musk’s competitive advantage, then, comes from seeing the sea change toward environmentally-conscious consumerism before anyone else and selling aggressively to those buyers.
But that doesn’t mean Tesla is particularly green in practice — at least not right now. Electric cars are only as clean as the electricity they use and in the United States, that electricity is often made from coal. However, this could change, as Tesla’s new Supercharger stations will reportedly be powered by Musk’s other startup, Solar City, and it’s carbon-neutral sun power.
Innovators in terrestrial transport are rivaled only by the airline industry. In 2016, United Airlines began an important shift from fossil fuels to biofuels.
The company contracted with AltAir Fuels, a California company turns literal trash — like agricultural waste and spent oils, blended in with reduced amounts of jet fuel — into plane power.
AltAir’s product, of which United planned to purchase as much as 15 million gallons, contributes 60 percent of the greenhouse gas emitted by more traditional fuels.
While United Airlines is alone in its formal corporate commitment to biofuels, competitors like Alaska Airlines are also trying alternative energy on for size. In November, the company flew its first flight in a plane powered partly by wood.
Though many airlines are tinkering with ways to reduce their carbon emissions, they’re still struggling to break even on biofuels, which are three times as expensive as regular fuel and not subsidized, according to the non-profit reporting outlet Crosscut. Though there’s a struggle ahead, these obstacles only serve to further the heartwarming feeling that the airline industry’s shift toward greener energy is actually genuine.
Source: https://www.inverse.com/article/35227-corporations-go-green-to-make-money / August 8, 2017
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