(2 of 5)
While environmentalists generally laud these efforts, corporate pledges to go green tend to be the first casualties when business gets tough, and enviros often criticize the promises as "greenwash"--really, business as usual. In 2000, Ford Motor lit up the Birkenstock crowd by promising to improve SUV fuel economy 25% by 2005; three years later, the firm reneged amid a steep sales slump and $6.4 billion in losses. Ford has started issuing reports on its environmental impact and is taking steps to address global warming. But nowhere in the publicity efforts do you hear that the firm is part of an industry group suing California to block a regulation requiring a 30% cut in greenhouse-gas emissions for new vehicles sold in the state by the 2016 model year.
Large, global companies are complex organisms, of course, with sometimes contradictory positions, and you could say Ford execs are just protecting investors, whose interests they are legally required to represent. No CEO wants to stand up at a shareholders' meeting and announce that going green hurt profits. "Guys in my job can't have hobbies," Immelt says, explaining that he's not greening GE to earn plaudits from environmentalists, eco-minded consumers or even young GE employees, who liked the idea according to internal focus groups. "You can't do things because you had a vision while you were in bed one night and someone whispered in your ear 'Go green.'"
No, for Immelt and GE--whose size, stellar earnings record and legendary management practice make it one of the world's most influential companies--it's about cashing in on cleaning up the planet. Worldwide, the market for environmental goods and services hit $600 billion last year, according to Environmental Business News. Some segments, such as renewable-energy power systems, are expanding at double-digit rates in Europe and China. Immelt needs those high-growth businesses to offset mature sectors in GE's portfolio, which aren't growing much more than the economy. The potential for fuel-saving technologies and renewable energy is also getting more compelling as oil and gas prices reach record levels. Eighteen states, including power hogs California and Texas, have set requirements or goals for renewable energy. New York, for one, aims to generate 25% of the state's energy from renewables by 2013, up from 19% today. More than 160 mayors have pledged to curb greenhouse gases in their cities according to the guidelines of the Kyoto Protocol. Indeed, now that Kyoto has kicked in--with 34 industrialized nations legally bound to cut emissions, excluding the U.S., China and Australia--multinational companies will have to cut CO2 emissions or pay to pollute at the old rate, bolstering the market for pollution-control gear.