Is Corporate America Going Green?

Corporate America, which once dismissed fears about global warming as unfounded, appears to be changing its mind, publicly acknowledging its influence on climate change and striving for a greener image.

BOSTON — Corporate America, which once dismissed fears about global warming as unfounded, appears to be changing its mind, publicly acknowledging its influence on climate change and striving for a greener image.

Major companies such as General Electric Co. and chemicals maker DuPont Co. are taking steps to make their plants and products more energy efficient and to reduce emissions of the greenhouse gases linked to global warming.

To be sure, U.S. companies have heavily promoted their change of heart in slick marketing campaigns such as Ford Motor Co.'s "I guess it is easy being green" television advertisements for its Escape hybrid sport utility vehicle.

Environmental activists say the changes go beyond lip service but they urge lawmakers to prod companies along even faster through tougher environmental regulations.

"We've barely just begun, but what we've begun is real," said Mindy Lubber, president of Ceres, a Boston-based coalition of institutional investors and environmental groups that manages more than $3 trillion in assets.

Many scientists say a build-up of greenhouse gas emissions caused by burning fossil fuels such as oil and coal are raising temperatures around the world and could bring catastrophic changes -- from severe heatwaves to rising seas.

For many years, major U.S. corporations asserted that natural swings in temperature made it impossible to tell whether greenhouse gas emissions were influencing the climate.

With some notable exceptions -- including oil giant Exxon Mobil Corp. -- U.S. companies have noticeably changed their tune.

Fairfield, Connecticut,-based GE -- the world's second-largest company by market value -- last year unveiled its "Ecomagination" initiative to cut greenhouse gas emissions and increase sales of energy-efficient products.

Sales of "Ecomagination" products, ranging from washing machines to jet engines, reached $10.1 billion last year and GE aims to double that by 2010. It also aims to double its research spending on such products to $1.5 billion by 2010.

"Our customers are heavy energy users, customers that have fuel issues, that are seeking energy efficiency," said Lorraine Bolsinger, a GE vice president who heads up the Ecomagination program. "When we talk to our customers, they tell us, 'This is what we need."'

Fears that a warmer, wetter planet would spawn devastating storms like Hurricane Katrina, which flooded much of New Orleans and killed more than 1,500 people in Louisiana alone, have also caused insurers to shift thinking on global warming.

American International Group Inc., the world's top insurance company by market value, said in May -- after losing $2 billion after tax from Katrina and other disasters last year -- that it would develop projects to keep greenhouse gases out of the atmosphere.


A tripling in oil prices to record highs above $70 a barrel is also accelerating the drive for greater efficiency.

DuPont has cut its energy bill by about $3 billion since kicking off an emissions-reduction campaign in the early 1990s, said Edwin Morgan, director of energy and environment at the Wilmington, Delaware,-based company. It has cut its greenhouse gas emissions by more than 72 percent over that time.

Ceres, in a March study, ranked DuPont's efforts to reduce global warming second only to British petroleum firm BP Plc among major global companies.

U.S. greenhouse gas emissions have continued to rise since the White House declared in 2001 that the U.S. would not abide by the terms of the United Nations' Kyoto Protocol to cut such emissions below 1990 levels by 2008.

While observers lauded the steps taken by U.S. companies in industries ranging from chemicals to electric utilities, they said the only reliable way to reduce U.S. greenhouse gas emissions would be regulation.

"One company doesn't want to go alone. They want to move forward as industries," said Brendan Bell, global warming analyst at the Sierra Club, a major U.S. environmental group.

Some investors have begun petitioning companies to fight global-warming-related regulation. The Free Enterprise Action Fund, a $6 million mutual fund, through proxy proposals asked GE and J.P. Morgan Chase & Co. this year to fight such regulation.

"Global warming activists are using these guys to get these laws passed. And once the laws are in effect, they are going to get more and more intrusive, and they're not going to be able to control them," said Steve Milloy, a portfolio manager.

Bolsinger said GE would be able to compete even in a tighter regulatory environment.

"Without some kind of legislation, we don't see that there's going to be significant progress made," Bolsinger said. "We're not afraid of whatever regulation will come."

Source: Reuters

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