Makower outlines General Electric’s ecomagination initiative as an example of a corporate responsibility programme that has the dual benefit of creating new revenue streams and cost saving in the business as well as benefiting the environment. It has been argued that strategic corporate social responsibility investment in projects should be adopted as opposed to a laissez-faire approach. These investments should demonstrate clear returns and value for money (Radcliffe, 2009) while still honoring a triple bottom line: people, planet and profits (Wikipedia, Corporate Social Responsibility, 2011).
According to Makower, General Electric’s ecomagination initiative is a driver of new products, services and business models. It creates sustainable business opportunities through innovation; finding green ideas and bringing them to the market. The source of the innovative ideas is not confined to the four walls of the organization. External sources such as non-profit organizations, academic institutions, government agencies and entrepreneurs augment General Electric’s research and development operation, which comprises of 1,500 scientists.
General Electric, in partnership with leading venture capital firms, created the “Ecomagination Challenge” as an avenue for ideas, innovation and partnership. Many start-up companies would be interested in partnering with General Electric because of its global distribution capacity, investment capital and massive research capabilities. However, this does not mean that General Electric does not stand to benefit from its corporate responsibility initiative. Makower discusses a scenario that is best described as ‘win-win-win-win’. Obviously, the first beneficiary is the start-up that gets technical and financial backing for the implementation of its idea.
Next in line is General Electric Company. It is able to realize revenue potential in billions of dollars. In September 2011, during the launch of the “Ecomagination Challenge” in China, General Electric’s chief executive officer stated that revenue from a range of green technologies, such as wind turbines and efficient jet engines, will be around 21 billion dollars in 2011 up from 5 billion in 2005 (Back, 2011).
The environment benefits from these green initiatives. Since 2005, General Electric has been able to reduce its environmental footprint. In 2009 greenhouse gas emissions were down 22 percent compared to 2004. Water consumption was also reduced by 25 percent and a 50 percent reduction in energy intensity has been attained (Robins, 2011).
Finally, the partners and immediate community in this initiative stand to benefit. General Electric Company launched its ‘Ecomagination Challenge’ in China to fund innovative gas-energy projects. This will boost China’s target of doubling the contribution of natural gas to the total energy grid by 2015 (Back, 2011). As of 2009, General Electric’s renewable energy initiatives employ more than 4,900 people globally and have created more than 10,000 supporting jobs (Wikipedia, “General Electric”, 2011). During the opening of the Asian Forum on Corporate Social Responsibility in October 2011, the AIM RVR Center’s chairman stated that “for many developing countries the private sector is actively engaged in reducing poverty, improving education and raising health standards – all part of making life better for a firm’s employees and for the country” (Herrera, 2011).
Corporations are adopting sustainable initiatives, which are likely to save costs and may even drive revenues and profits higher. Is the argument, by critics that corporate social responsibility distracts from the economic role of businesses still justified?
Back, Aaron. “GE’s China Ideas Bank.” Wall Street Journal. 29 Sept. 2011. Web. 23 Oct. 2011. <online.wsj.com>
Herrera, Maya Baltazar. “Change the World.” Manila Standard Today. 21 Oct. 2011. Web. 23 Oct. 2011. <www.manilastandardtoday.com>
Makower, Joel. “The Mark of Innovation.” Ecomagination.com. 21 Oct. 2011. Web. 23 Oct 2011. <www.ecomagination.com>
Radcliffe, Toby. “Corporate Social Responsibility and the Recession.” Article 13. 13 Feb. 2009. Web. 22 Oct. 2011. <www.article13.com>
Robins, Ron. “Sustainability Profits Companies.” Business Ethics. 15 Jun. 2011. Web. 23 Oct. 2011. <business-ethics.com>
Wikipedia. “Corporate Social Responsibility.” Wikipedia.org. 18 Oct. 2011. Web. 22 Oct. 2011.
---. “General Electric.” Wikipedia.org. 11 Oct. 2011. Web. 23 Oct 2011