Marketing
Saturday 25/11/2006, Page: 8
Westpac's doing it. BP's doing it. Wal-Mart's doing it. News Ltd's doing it. Virgin's doing it. Origin Energy's doing it.
Increasing numbers of corporates around the world are doing it. Prime Minister John Howard and President George W Bush aren't doing it. It's called the Climate Change Boogie.
While the President is having trouble finding someone who can explain it for him in simple enough terms, and the Prime Minister seems to think that if he ignores it for long enough then it will go away, climate change is top of the agenda for corporates because they have to plan beyond the next election.
Rupert Murdoch, until recently a greenhouse sceptic, is on a drive to make News Corp carbonneutral in an attempt to help address climate change. Sir Richard Branson recently pledged $3.9 billion (I said billion) dollars to fight global warming. The world's largest retailer, Wal-Mart, is leading the way to reducing its carbon footprint by radically rethinking its entire operation.
These and many other corporates are not waiting for politicians to lead. Conservative political regimes and their media supporters are climate change doubters, believing it's a green/communist plot to bring down modern consumer capitalism. Alan Jones says the climate change threat is based on `pretend science: Despite this, the bastions of capitalism are joining the revolution.
Last year, Goldman Sachs chairman Henry Paulson, warned that the time needed to address climate change was running out.
James Murdoch's BSkyB is now carbonneutral, which means that as a company it adds no new carbon to the atmosphere. Father Rupert was impressed by the positive response from investors to this move. News Ltd has launched a range of initiatives such as subsidies on company cars when executives choose a hybrid and a program aimed at cutting electricity.
On top of the Wal-Mart in McKinney, Texas, is a wind turbine. It's the tallest structure in town. It generates five percent of the store's electricity. Energy needs are also supplied by solar power cells on the roof, heat-reflective paint on exterior walls and lights that automatically dim or brighten if it's sunny or overcast. Customers drive out of their way to shop at this experimental Wal-Mart.
With 5200 stores worldwide, Wal-Mart influences everything from the price of goods to the packaging. If it throws its weight behind environmental action, the impact would be felt around the world. "One little change in product packaging could save 1500 trees," says Wal-Mart CEO Lee Scott. "If everybody saves 1500 trees or 50 barrels of oil, at the end of the day you have made a huge difference."
Wal-Mart aims to slash greenhouse gas emissions at existing stores by 20 percent and to construct new stores that are 25 to 30 percent more efficient. Wal-Mart's fleet of 7000 trucks is tasked to get twice as many miles per gallon by 2015, through better aerodynamics and lowerfriction tyres. Factories that cut air pollution, even in China, get preferential treatment. Wal- Mart will reward manufacturers who reduce their packaging with prime position on the shelves. Wal-Mart's lobbyists are pushing for pro-environmental policy changes in Washington.
Three other significant US companies, Whole Foods Market, FedEx Kinko's and Walgreens, have launched major `green energy' procurement programs. The biggest commitment was made by Whole Foods Market, which became the first large company to offset all of its electricity use in the US and Canada with renewable energy certificates (RECs). FedEx Kinko's has increased the number of RECs it purchases annually by 68 percent.
Chemist chain Walgreens installed solar panels at 112 of its 5000 stores and at two distribution centres to generate more than 13,800MWh of electricity per year, the largest solar power project in the US.
These companies aren't doing it to be goodygoodies or to save the world for the frogs and dolphins. They are doing it for today's and tomorrow's profits. Wal-Mart sees profit in going green. "We are not being altruistic. This is a business philosophy, not a social philosophy," says a spokesperson. Energy costs are the secret ingredient. The company's truck drivers switch off engines when they stop for a break, to make savings of US$25 million a year. Wal-Mart expects to save US$310 million a year by other fuel savings.
Besides direct action, the other corporate reaction to global warming is to call for a cap and trade system - a mandatory emissions scheme that forces companies to reduce their emissions or buy credits from someone who has sequestered (locked up) carbon.
Westpac, BP, IAG and Origin Energy formed a business roundtable to push for serious government action; i.e. a cap and trade system (John Howard calls it a 'carbon tax'). In the US, 40 companies, including Boeing, IBM, John Hancock and Whirlpool have publicly stated that climate change is real by joining a business council organised by the Pew Center on Global Climate Change. Even power companies, the largest industrial emitters of carbon dioxide, are pleading for a cap and trade system. A uniform system would eliminate costly uncertainties dogging investment decisions on new multibillion-dollar power plants.
There will come a moment - soon - when carbon becomes real to the masses. They will want to know what you're doing to protect them from the wrath of a world wracked by fever. What will you tell them? What will you tell shareholders? What will you tell your children?
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