Corporations Put More Green Into Their Bottom-Line Plans
More firms embrace environmental efforts, but some activists say it's "greenwashing."
In a push to become known as the "greenest of the green" electric companies, Northeast Utilities is adopting the latest international environmental standards in all its power plants.
British Petroleum is joining forces with the Environmental Defense Fund to reduce carbon- dioxide pollution. And Union Carbide is touting new biodegradable industrial detergents for washing grease-stained uniforms.
After decades of battles with - even animosity toward - environmentalists, many corporate executives are now embracing ideas they once dismissed. Among a growing number of firms, caring for the environment is being incorporated into the bottom line.
"It's incredible, particularly if you put it in the historic context: 30 years ago there wasn't even an [Environmental Protection Agency]," says Andy Savitz, who heads Coopers & Lybrand's environmental consulting division - which didn't exist six years ago.
As international leaders gather at the United Nations this week to assess the progress since the 1992 Earth Summit, the question of "corporate greening" has taken on a magnified role. Government and institutional aid for environmental projects has fallen, leaving more responsibility for green innovations to the free market.
While some moves may do more to buff the corporate image than the planet, many companies today are doing regular environmental audits. Complying with environmental standards is increasingly a responsibility of the board of directors, and compensation for executives is tied to environmental performance.
But this apparent dawning of an environmental corporate conscience has some is some environmental activists very concerned.
"It's going great for the corporations, but not too well for the rest of the world," says Robert Weissman of Essential Information, a nonprofit consumer watchdog group.
Weissman and other staunch environmentalists applaud genuine corporate efforts to clean up their act, but contend they are more the exception than the rule. Instead of corporate green, they see greenwashing: superficial changes that are used as marketing tools to woo consumers.
"There are certain corporate realities that make industries like the auto, oil, and chemical industries incapable of being green," says Andre Carothers, a member of the board of directors of Greenpeace International. "The earth requires they completely rethink the way they're doing business, not just change the processes or the details of what they do."
But for many environmentalists, that view is too extreme and denies economic realities. They applaud the steady trend in corporate greening, and are doing their best to nurture it.
In May, The Environmental Defense Fund (EDF) announced it was undertaking a joint project with British Petroleum (BP), one of the world's largest oil firms, to develop projects that will use "emissions trading" and other innovative ways to try to bring down the levels of "greenhouse" gases that contribute to global warming.
BP is the first global oil and gas company to undertake such a project. For EDF's chief scientist Michael Oppenheimer, the project is a coup because a petroleum company the size of BP brings clout to such policies. "I was very moved by BP's decision," says Dr. Oppenheimer.
BP's chief John Browne takes a philosophical view. He says that as the world's population continues to grow - by 10,000 people every half hour - so inevitably will the use of fossil fuels. Since most of the scientific community agrees there is a link between carbon-dioxide emissions and increases in global temperatures, Mr. Browne wants to be sure fossil fuels are used "correctly."
"First, we have to look at the manufacture of our products and say how can we do it better and better to reduce carbon dioxide," says Browne.
Browne credits his customers for making their environmental concerns well known. While some experts credit environmental activists and government regulations for the greening of the corporate world, others point to examples such as BP and contend that the consumer is responsible.
In a recent survey, the Calvert Group found that 81 percent of Americans said they would be more likely to invest in companies if they knew they were environmentally responsible.
"People are starting to realize they can have an impact not just with their consumer dollars, but with their investment dollars as well," says Steve Cohen at Calvert, an investment fund that specializes in socially responsible companies.
That has companies, such as Northeast Utilities, working to transform not only their image, but also their thinking. The firm is New England's largest utility and has been dogged by serious nuclear regulatory and environmental problems.
"Just like you get up in the morning and put your socks on, that's how I want everyone in this company to think about the environment, automatically," says Dennis Welch, Northeast's director of environmental health and safety.
Union Carbide went through major soul searching after a 1984 disaster in Bhopal, India, that killed 2,000 people. Executives say environmental factors are now part of every decision.
"When you step back and insist everything you do must be environmentally friendly and safe, that puts a heavy load on the research and development people," says Ron VanMynen, Union Carbide's vice president of health, safety, and environment. "But in the end your final product and your business will be much more viable."
Still, for activists like Greenpeace's Carothers, it's too little, too late: "The vital signs of this planet cannot wait for the 200-year trajectory we're on with this corporate trend.... Environmentalists have been right way too often in the past to be comfortable now," he says.