CEOs: The Worldwatch Report: Corporate converts February 24, 1999 : LUSENET : Sustainable Business & Living iForum : One Thread

The Worldwatch Report: Corporate converts
Wednesday, February 24, 1999

By Lester R. Brown

[Fair Use: For Educational/Research Purposes Only]

Corporations have been endorsing environmental goals for some three decades, but their efforts have been too often centered in the public relations office, not in corporate planning. Now this is beginning to change as the better informed, more prescient CEOs recognize that the shift from the old industrial model to the new environmentally sustainable model of economic progress represents the greatest investment opportunity in history.

In May 1997, for example, British Petroleum CEO John Browne broke ranks with the other oil companies on the climate issue when he said, "The time to consider the policy dimensions of climate change is not when the link between greenhouse gases and climate change is conclusively proven, but when the possibility cannot be discounted and is taken seriously by the society of which we are a part. We in BP have reached that point."

Browne then went on to announce a $1 billion investment by BP in the development of wind and solar energy. In effect he was saying, "We are no longer an oil company; we are now an energy company." Within a matter of weeks, Royal Dutch Shell announced it was committing $500 million to development of renewable energy sources. And in early 1998, Shell announced that it was leaving the Global Climate Coalition, an industry-supported group in Washington, D.C., that manages a disinformation campaign designed to create public confusion about climate change.

These commitments to renewable energy by BP and Shell are small compared with the continuing investment of vast sums in oil exploration and development, but they are investments in energy sources that cannot be depleted, while those made in oil fields can supply energy only for a relatively short time. In addition, knowing that world oil production likely will peak and begin to decline within the next 5 to 20 years, oil companies are beginning to look at the alternatives. This knowledge, combined with mounting concern about global warming, helps explain why the more forward-looking oil companies are now investing in wind and solar cells, the cornerstones of the new energy economy.

Ken Lay, the head of Enron, a large Texas-based national gas supplier with annual sales of $20 billion that is fast becoming a worldwide energy firm, sees his company, and more broadly the natural gas industry, playing a central role in the conversion from a fossil-fuel-based energy economy to a solar/hydrogen energy economy. As the cost of wind power falls, for example, cheap electricity from wind at wind-rich sites can be used to electrolyze water, producing hydrogen, a convenient means of both storing and transporting wind energy or other renewable energy resources. The pipeline network and storage facilities used for natural gas can also be used for hydrogen.

George H.B. Verberg, the managing director of Gasunie in the Netherlands, has publicly outlined a similar role for his organization with its well developed natural gas infrastructure.

In the effort to convert our throwaway economy into a reuse/recycle economy, too, there are signs that new initiatives are coming not just from eco-activists but from industry. In Atlanta, Ray Anderson, the head of Interface, a leading world carpet manufacturer with sales in 106 countries, is starting to shift his firm from the sale of carpets to the sale of carpeting services. With the latter approach, Interface contracts to provide carpeting service to a firm for its offices for say a 10-year period. This service involves installing the carpet, cleaning, repairing and otherwise maintaining the quality of carpeting desired by the client. The advantage of this system is that when the carpet wears out, Interface simply takes it back to one of its plants and recycles it in its entirety into new carpeting. The Interface approach requires no virgin raw material to make carpets, and it leaves nothing for the landfill.

Perhaps one of the most surprising -- and significant -- signs of impending change came last year from the once notorious MacMillan Bloedel, a giant forest products firm operating in Canada's western-most province of British Columbia. "MacBlo," as it is called, startled the world -- and other logging firms -- when it announced that it was giving up the standard forest industry practice of clear-cutting. Under the leadership of a new chief executive, Tom Stevens, the company affirmed that clear-cutting will be replaced by selective cutting, leaving trees to check runoff and soil erosion, to provide wildlife habitat and to help regenerate the forest. In doing so, it acknowledged the growing reach of the environmental movement. MacMillan Bloedel was not only being pressured by local groups, but it also had been the primary target of a Greenpeace campaign to ban clear-cutting everywhere.

(Lester R. Brown is publisher of World Watch, the bi-monthly magazine of Worldwatch Institute.)
Copyright 1997, Worldwatch Institute
Distributed by The Los Angeles Times Syndicate, All Rights Reserved

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