CSR commitment: Go Green Attempts by Google and Ford

For the last few weeks, I drew attention to unethical practices in the recent business realm. This week, I hope to bring a more positive note to the issue of business ethics. In this entry, I used Google and Ford Motors as examples to demonstrate encouraging corporate practices. I examined a post entitled “Planet 2050” by Dr. Leslie Gaines-Ross, Weber Shandwick’s Chief Reputation Strategist, who strongly promoted corporate social responsibility through the use of clean energy. Ross also brought out the issue of reputation building through corporate social responsibility. Next, I responded to a post entitled “Outsourcing Pollution, With No Thought for Ethics” by Shel Horowitz, who is an author of several business related books and is hoping to emphasize in his blog: ethics as a success driver. Horowitz’s post discussed on companies outsourcing to countries such as China and India, in hopes to take advantage of the low cost production and absence of anti-pollution laws. My responses to the posts and links to the two blogs can be found below.

‘Planet 2050’
Comment

Your post provided sound arguments against skeptics who argued that green business would be an early casualty of the credit crunch. Without a doubt, “the fit for purpose company will be an environmental leader, ready to embrace a new world order.” And the new world order is running in the trend of going green and environment sustainability. This is not a temporary trend. Companies who advocate the trend of going green and prove success in its environmental protection practices would excel and lead the industry. In addition, I agree completely that “corporate responsibility is a fundamental element of corporate reputation-building.”Allow me to add on to your discussion using Google as an example.

Google released its Clean Energy 2030 plan (see left, above) last fall. It says the country can generate 30% of its electricity from renewable sources, mostly wind and solar, by 2030, and in so doing replacing all coal and oil electricity generation, and about half of that from natural gas. Google itself has venture capital investments in start-ups in solar power, wind and wave energy. The goal to generate 30% of electricity from renewable sources might seem overreaching, and critics argue that the company neglects shareholder value. However, at the Wall Street Journal’s ECO:Nomics Conference in Santa Barbara, California, Eric Schmidt, Google’s CEO, insisted the net benefit of Clean Energy 2030 to the U.S. economy would amount to around $4.4 billion. He believes that the recent financial turmoil should not be a reason to put the plan on hold. “Change does not occur when things are going well,” he says. “Change occurs when people are scared. This is the time to have this conversation. Shareholder value in a company is created at the end of everything we do.” Utilizing renewable sources, although with high initial capital investment, is more profitable in the long term. Schmidt says, “Green energy, done right, is more profitable than the old kind of energy. Lower costs cause more earnings for shareholders.”

In addition, the Clean Energy 2030 plan does not only build on energy saving issues. As the plan develops, Google claims that around 9 million jobs will be created. The news is a strong boost to society morale amongst the recent announcements of layoffs in the market.

I believe Google’s active role in advocating clean energy explains why the company is continually ranked first in the list of 100 Best Companies to Work For and has an exceptionally high reputation in the industry. Its reputation is tied to its commitment in corporate social responsibility.

'Outsourcing Pollution, With No Thought for Ethics'
Comment

Your post is of intriguing thought. It has never occurred to me that corporations are “shifting our manufacturing operations overseas, not only because of lower costs, but also because these countries do not have effective anti-pollution laws.” It is especially true to say, “when there’s money to be made, it’s understood that you want to be among the profits.” During the recent economic turmoil, news such as the peanut salmonella outbreak and the Satyam scandal, exemplifies corporations and executives’ single mindedness on boosting sales and profit making. While it is true that some corporations rank profits over ethical values, I would like to use Ford Motors as an example to demonstrate its commitment to the environment and how it upheld corporate social responsibility over the years.

The world is all about going green and saving the environment now. People are shocked by the fact that the environment they are living in might not be able to endure the damages we are making any longer. In response to that, hybrid cars seemed to be the new hit item. Just this spring, Ford Motors introduced Ford Fusion, a retooled, restyled, fuel-efficient midsize car. Despite its $5.9 billion loss in the fourth quarter of 2008, that it is revamping its balance sheet and a share of its stock costs less than a Big Mac, Alan Mulally, CEO of Ford Motors (see right, above), still pushed forth the higher capital investment of producing hybrid cars. In this year’s Wall Street Journal’s ECO:Nomics Conference in Santa Barbara, California, Mulally was introduced as “the one American auto industry CEO who is not taking bailout money.” Mulally admitted that “the hybrids are very tough economically.” While the company might not be doing well in its financial books, Ford is still considered as an industry leader.

In fact, Ford Fusion is not the company’s first attempt to stir itself to a more environmental friendly corporation. As early as 1983, Ford launched the Ford Conservation and Environmental Grant award, which aims to encourage and commend environmental programs. The award was made global to include China in 2000. In addition, William Ford Jr., Ford Executive Chairman, along with Alan Mulally, announced that they would take a 30% pay cut for the next two years. Ford’s board of directors will also drop their compensation for two years and there will be no more performance bonuses for salaried workers and senior executives. Ford and Mulally believed that “these are necessary actions to help us emerge as an even stronger, profitably growing Ford Motor Company for the benefit of us all.”

I believe Ford Motors is a great example of sound management team and corporate social responsibility. I hope this adds some optimism that maybe there are still companies out that who would not sacrifice their morals for profits.