This particular document seeks to overview configurations and considerations of truly global public companies regards to being green. Despite being a review, a mere snapshot of sorts, a conscious choice was made of iconic companies in very different industries with relative representation in mind.
The approach began with the scouring of the four companies 10K reports, took a detour to the share price over the last five years (given that increasing shareholder wealth is the primary fiduciary responsibility of the public company) and then went back and scoured the annual reports as well. Just for good measure, each company was googled for the phrase: “Is ___ green?”
The companies are General Electric, Microsoft, Time Warner and McDonalds. Each of these companies has at least a footprint in more countries than not, and more than being global in a literal sense they are each recognized globally for the corporate citizens that they are. A notable aside: that each of these companies is, in and of itself, a larger economy than half the world's countries.
General Electric
If there could ever be such a thing as the quintessential Corporation, it would certainly have to be GE. Many of the considerations that we think of when we consider American corporations became famous through GE; in particular through its last CEO Jack Welch. Arguably, for better or for worse, such corporate expressions included off shoring, Six Sigma and while for others would be enormously successful enterprises in their own right, for GE, these distinct entities were simply modules rearranged on a chessboard, merged, deconstructed... whatever was necessary to line the coffers.
When most people think of GE, they tend to think of appliances and light bulbs. The new (well, since 2000) CEO, Jeff Immelt, began to extinguish the appliance line altogether in 08/09. The last incandescent light bulb to be manufactured in the United States occurred this month (September 2010); the fluorescent bulb manufacturing having already been established overseas. Yet, a point in fact, as much of American business is making money off money (Sears), GE's 10K reveals an acknowledged 13 distinct entities, the majority financial institutions.
Despite being the behemoth that it is GE seems almost human compared to other MNCs; given its nimbleness and cleverness. Embedded in the military-industrial complex of the United States GE remains in the background by only doing pieces and parts. Upper management sees where tomorrow's money will be coming from, and as if having turned on a dime across this last decade, GE has rebranded itself as the champion of tomorrow's energy, coining the phrase: Ecomagination. An enormous effort from a company that is still in the process of dredging PCBs from the Hudson River under restraint of federal law.
GE's efforts, to name a few, include gasification, synthetic gas, conversions of coal and other hydrocarbons, nuclear, more efficient power generation wherever they can find it and the new symbolic poster child, their wind farms.
Beyond the 10K, the annual report reveals more references to the environment, green and sustainability than all the other annual reports reviewed combined. GE happily trumpets green collar jobs. While GE may be doing more than most to this end, make no mistake, GE is about making money in the long term; and the green thing is by far more marketing than the over arching aspect of all the GE does.
Taking a quick look at how they have fared over the last five years, they trade on the NYSE, their high was on Oct 1st 2007 – 41.77, their low on Mar 2 2009 – 7.06 and as of September 13 – 15.98. These are some significant swings; and while we will see some of this echoed in the other companies, given what happened in the global economy over last five years, the other three companies do not swing is much, nor did they try to reinvent themselves as much.
As this new makeup was being applied at 2005 article in Forbes entitled Has General Electric gone eco-mad? had the interesting line, “environmentalists sneer that Ecomagination is like having Philip Morris run a chain of cancer clinics.”
Microsoft
Microsoft is the new kid, compared to the rest; founded in 1975 (of course was Thomas Edison who had found the GE). In its 35 years it has certainly grown to be global, a natural expression of what it does. It has over 89,000 employees, nearly half of which are located in at least 10 other countries. The technology that Microsoft represents has been transformational for entire world. The author was unable to find corroboration, and it may be urban legend, it is said that that the world runs on Windows; specifically, that Microsoft has 92% of the market share.
For much of its life Microsoft has enjoyed the spin that what it produces is inherently green. With so much becoming digital think of all the paper, photo chemicals, and the like, that our planet is being spared.
Unfortunately, being born into a consumption culture, none of these appliances or its attendant pieces has seemed much less than disposable. Worse, these materials have been among the most insidious to get rid of and/or to recycle.
A quick detour to how Microsoft has fared over the last five years in the markets shows the following: it trades on NASDAQ (MSFT), saw its high on Oct 29 2007 – 37.06, its low on Mar 09 2009 – 16.65 and as of September 13, 2010 was trading at 23.85. This seems a very conservative reflection of what has been happening in the world economically.
Wrapping up the Microsoft commentary it is noteworthy that there was virtually no acknowledgment of the environment, anything green or sustainability in either the 10K or the annual report proper. However, found elsewhere, Microsoft is making an effort. It is unclear how much this effort actually represents. Nonetheless, this includes solar powered data centers, bio diesel trucks and a purge of PVC in its products, begun in 2005.
Time Warner
With 87 region specific versions and local language feeds in approximately 180 countries around the world (depending on who is counting, there are only 195 to 200 countries) one could argue Time Warner has more of a global penetration than any other company does. Of course its holdings include entertainment beyond the television; with all manner of publication, video games and theme parks, just to name a few. Time Warner has over 550 movie theater screens in Japan and the US alone.
Trading on the NYSE (TWX) , the five-year high came Jan 16 2007 – 67.86, the low Feb 17 2005 – 22.05 and as of September 13th, 2010 – 31.78. Like Microsoft, Time Warner’s market movement seems reflection of global economics.
The 10K itself yielded nothing about any green movement on Time Warner's part. The annual report, however, had a seal on the back page stating, "Time Warner reduce printing and postage expenses and helps protect the environment." That was about it.
However, also like Microsoft, more about Time Warner's green efforts were elsewhere. Acknowledged on their own website were practices and initiatives, studies, recycling efforts, some kind words towards carpooling and energy conservation and a solar powered building. It is difficult to see this is much more than cosmetic, also. It is hard to imagine the paper consumption alone offset by these efforts.
McDonalds
One of the four companies considered, only GE and McDonald's had something to say about the environment within their 10K statement. McDonald stated, “The Company continually monitors developments related to environmental matters and plans to respond to governmental initiatives in a timely and appropriate manner. At this time, the Company has already undertaken its own initiatives relating to preservation of the environment, including the development of means of monitoring and reducing energy use, in many of its markets.”
If this sounds somewhat weak, it likely is for several reasons. For generation now, McDonald's has been a target of consumer activism. The Styrofoam clamshell packaging has been gone for some time now. McDonald's may still be a producer of extraordinary waste, but its environmental efforts continue enough that consumer pushback today is largely focused on the actual nutrition content of the food, issues of obesity, etc.
At least that is how the conversation seems left for the North American audience. In Europe, however, the greening of McDonald's has recently included something as drastic as a color change in the timeless icon itself.
“The Annual Report is printed on paper certified to the standards of the Forest Stewardship Council (FSC) and includes postconsumer fiber”. Otherwise, the annual report is largely silent about environmental matters as well.
McDonald's trades on the NYSE (MCD); and there is something of interest to note. Insofar as we all have to eat, and McDonald's has positioned itself as a low-cost food source. Its low over the last five years was on October 10, 2005 at – 32.32, but it has continued to climb since. As of September 13, 2010, McDonald’s was trading at a five-year high of – 75.01.
Consistent with its other heavyweight colleague's McDonald's efforts to go green were largely found away from its own grid of 10K and annual report. In 2008, McDonald has had its first LEED® Certified restaurant. In 2009, McDonald has installed electric vehicle charging stations for the first time. However, these tentative first gestures can hardly offset the destruction of football field’s worth of tropical rain forests every day, to create new lands for cattle grazing.
Summary
Sadly, only half of the four had pronounced environmental activities sections within their formal 10K and/or annual reports. Of itself, this was a surprise; given the general mood among first world nations’ consumers to be sensitive to such things. While all four companies have made an earnest movement in the green direction, it seems far too much has been cosmetic, lip service or even at best, minimal, compared to the portrayal.
GE sees a monetized future if we can establish itself well enough as first to market. The rest seem to be making as much movement as they need to speak to as much noise as they may be getting; enough to keep off the hounds, allowing them to continue business as usual (as much as possible). Managing interdependence between host and home is largely a case-by-case basis; as witnessed by McDonald's new green signs.
Concluding thoughts would have to acknowledge that any efforts to this end are good efforts; we simply need to elevate the conversation, hold corporations more accountable. The citizens of the world are at the mercy of the conflicting agendas playing out on the world stage: the cancerous need of capitalism to seek deregulation versus the good governance global institutions and their treaties with the politics of the respective governments caught in the middle. People speak up!
References
General Electric. (2010). Annual Report ([pdf download]). Retrieved from Corporate home website: http://www.ge.com/
General Electric. (2010, Feb 19, 2010). Annual report [Section 13 and 15(d), not S-K Item 405]Acc-no: 0000040545-10-000010 (34 Act) Size: 22 MB ([digital/online]). Retrieved from SEC; EDGAR system: http://www.sec.gov/Archives/edgar/data/40545/000004054510000010/frm10k.htm
McDonalds. (2010, February 26, 2010). Annual report [Section 13 and 15(d), not S-K Item 405]Acc-no: 0001193125-10-042025 (34 Act) Size: 4 MB ([digital/online]). Retrieved from SEC; EDGAR system: http://www.sec.gov/Archives/edgar/data/63908/000119312510042025/d10k.htm
Microsoft. (2010, July 30, 2010). Annual report [Section 13 and 15(d), not S-K Item 405]Acc-no: 0001193125-10-171791 (34 Act) Size: 20 MB ([digital/online]). Retrieved from SEC; EDGAR system: http://www.sec.gov/Archives/edgar/data/789019/000119312510171791/d10k.htm
Time Warner. (2010, February 19, 2010). Annual report [Section 13 and 15(d), not S-K Item 405]Acc-no: 0000950123-10-014479 (34 Act) Size: 7 MB ([online/digital]). Retrieved from SEC; EDGAR system: http://www.sec.gov/Archives/edgar/data/1105705/000095012310014479/g21813e10vk.htm
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