Case

Ecomagination and the Global Greening of GE

As noted on Map 5.1, a recent TV ad invites viewers to “accompany” a small green frog as it
does a little globe hopping from one exotic location to another. The frog, however, doesn’t seem
intent on hitting the usual tourist spots, instead preferring stopovers at such places as a solar
farm in South Korea, a water-purification plant in Kuwait, and a wind farm in Germany. To
begin the second leg of his tour, he hops on a GE90 aircraft engine flying over China and takes
viewers to a “clean” coal-powered facility somewhere in Florida. Then he boards a GE
Evolution locomotive in the Canadian Rockies as a voiceover explains the point of all this
seemingly ordinary sightseeing: “At GE, we’re combining imagination with advanced
technology around the world to make it a better place to live for everyone.” The journey’s end
finds our frog in the midst of a lush, green tropical rain forest.

“Green Is Green”
The ad is part of a major promotional campaign by General Electric Company (GE) for its
Ecomagination Initiative.
Announced in 2005 by CEO Jeffrey Immelt, Ecomagination is an ambitious strategy designed to
demonstrate that an ecologically conscious conglomerate can cultivate the bottom line while
doing its duty toward the global environment—hence, the campaign motto “Green Is Green.”

The world’s eighth-largest corporation (in terms of market capitalization), U.S.-based GE sells
products in more than 175 countries through its industry business and GE Capital.
Industry is further divided into oil and gas, energy management, health care, transportation, and
appliances and lighting. It sells, among other things, appliances, aircraft engines, consumer
electronics, energy-related products such as solar panels and wind generators, and locomotive
engines.
It also operates research centers in the United States, Brazil, India, China, Germany, and Israel.
In early 2016, GE announced that it was selling its appliance business to Chinese company,
Haier.

When the company announced its plan to launch an internal green revolution, GE surprised both
investors and industrial customers who had long seen the firm as an ally in the struggle against
environmental activists and lobbyists.
But as more and more evidence piles up to support the claim that carbon dioxide emitted from
human-made sources is heating up average global temperatures, GE has decided to take a more
conciliatory stance, allying itself with a growing number of companies that regard investor and
environmental interests as intrinsically interlocked, rather than diametrically opposed.

"Commitments and Goals"

GE’s new initiative represents five basic commitments on its part:
(1) to reduce greenhouse emissions and improve the energy efficiency of operations;
(2) to double investment in the research and development of “clean” technologies;
(3) to increase revenues from those same technologies;
(4) to reduce its global water use by 20 percent; and
(5) to keep the public informed.

It now evaluates business unit managers not only on profitability and return on capital but also
on success in reducing carbon dioxide emissions, the chief greenhouse gas (GHG) attributed to
global warming.
Energy-intensive divisions, such as those catering to the power and industrial sectors, are
responsible for the largest cuts.

The company’s overall target was a 1 percent reduction from 2004 levels by 2012.
At first glance, the goal doesn’t seem to have been overly ambitious, but that number represents
a significant improvement if you account for the fact that, given GE’s projected growth, levels
would otherwise soar to 40 percent above 2004 levels.

Immelt also committed the company to reducing the intensity of GHG emissions—its level of
emissions in relation to the company’s economic activity—30 percent by 2008 and to improving
energy efficiency 30 percent by 2012.

To ensure that these goals were met, Immelt assembled a cross-business, cross-functional team
to oversee planning and monitor progress.
By 2014, the company had reduced GHG emissions by 31 percent from its 2004 baseline, more
than the 25 percent it had forecast.
It also had improved energy intensity by 32 percent from 2004 levels.

"A Little Consensus Seeking"

In addition to instituting the internal changes necessary to curb GHG emissions, Immelt
considered GE’s global political environment. He enlisted the Belgian and Japanese governments
in the global ecological discussion and allied GE with other green-minded corporations to lobby
American lawmakers on such matters as mandatory GHG reductions.
Working with the Environmental and Natural Resources Defense Council and the Pew Center on
Global Climate Change, GE also joined other companies to form the U.S. Climate Action
Partnership to help shape the international political debate over global warming.

GE and its allies want to be known for developing forward-looking strategies and making long-
term investments in an increasingly fragmented regulatory environment. With half of its markets
located outside the United States, GE is already under the jurisdiction of foreign governments
that are more active than the United States in addressing environmental issues.

Technological Tactics and Eco-Friendly Products

Under Immelt’s direction, GE has also been gearing up to double R&D investment in clean
technologies, including renewable-energy, water-purification processes, and fuel-efficient
products from which it expects significant revenue growth. GE had already spent $10 billion on
R&D investment between 2010 and 2014. In 2006, GE announced that it would reduce water
usage by 25 percent from its 2006 baseline, and it achieved a 42 percent reduction by 2014.

When the Ecomagination initiative was first launched, GE marketed only 17 products that met its
own Ecomagination criteria; by 2009, there were 90 such products, and by 2011, there were 140
products and solutions generating $105 billion in revenues. By 2014, revenues over the 2010–
2014 period had increased to $200 billion. GE wind was generating $30 billion in revenues, and
there were over 30,000 wind turbines in operation. In 2016, GE purchased the energy business of
French-based Alstom, giving GE access to Alstom’s giant offshore wind turbine technology.

In addition to making other products, such as appliances and light bulbs, energy efficient, GE
intends to establish itself as an “energy-services” consultant and to bid on contracts for
maintaining water-purification plants and wind farms, a venture that could be five times as
lucrative as simply manufacturing the products needed for such projects. The use of its website
to communicate information about its green products and the efforts to improve its own GHG
emissions reduction is an example of commitment #5, listed above: to keep the public informed.
In addition, it communicates information through social media such as Twitter and Facebook.

“Solving Environmental Problems Is Good Business”

GE insists that the markets for such products and services are both growing and profitable, and
Immelt is convinced that taking advantage of them not only helps the environment but also
strengthens the company’s strategic position with major profit opportunities.

GE also regards its Ecomagination strategy as a necessary response to customer demand. Before
embarking on this initiative, GE spent 18 months working with industrial customers, inviting
managers to two-day “dreaming sessions” to imagine life in 2015 and to discuss the kinds of
products they’d need in such an environment. The result? Management came out of the talks
with the indelible impression that both GE’s customers and the social and political environments
in which it conducted business would be demanding more environmentally “clean” products.

Many of GE’s Asian and European competitors had already begun investing in cleaner
technologies, and GE knew it couldn’t risk falling behind. GE is also focusing on emerging
markets such as China and India, where rapid economic growth has spurred the need for
expanded infrastructures, such as water and sewage systems, and for means of curbing
appallingly high levels of pollution.

"Mixed Reactions"
Not surprisingly, GE has been praised for its efforts to go green. It reached the ninth spot on
Fortune magazine’s list of the “Most Admired Companies” for 2015, and it earned a place on the
Dow Jones Sustainability Index, which identifies the 300 firms that perform best according to
combined environmental, social, and financial criteria.
At the same time, however, the company has generated a certain amount of skepticism. What
happens, for example, if the markets it’s betting on don’t materialize fast enough (or at all)?

Another potential risk revolves around the participation of developing nations in the clean-
technology push. In particular, will they be willing to pay prices that developed countries pay for
the technology that reaches the market? GE also faces the challenge of implementing the internal
changes entailed by its fledgling green strategy. Traditionally, the firm’s culture has been
accustomed to strategies of incremental change in time-tested products and services. In fact, its
highly touted Six Sigma program, championed by ex-CEO Jack Welch, inherently discourages
radical deviation and unnecessary risk taking. Management may have its work cut out when it
comes to persuading marketing, sales, and production teams that untested, early stage
Ecomagination products are worth the risk.

Then, of course, there are clients and shareholders. Many of GE’s customers work out of the
utility sector, which has assumed a leadership role in disregarding warnings of climatic change
and opposing ecofriendly regulation. Some investors seemed particularly concerned about the
company’s newfound activism and the potential of newly instituted greening initiatives to
alienate industrial customers.

Summary by Section (English)

Case Introduction

 GE’s Ecomagination ad campaign features a globe-trotting green frog visiting clean-

energy sites worldwide.
(Used as a metaphor to promote GE's global environmental efforts through advanced
technologies.)
 GE aims to combine imagination and technology to improve global living
conditions.
(Core message of the Ecomagination campaign.)

 Chiến dịch quảng cáo Ecomagination của GE đưa hình ảnh chú ếch xanh du hành
đến các địa điểm năng lượng sạch toàn cầu.
(Biểu tượng truyền tải nỗ lực môi trường toàn cầu của GE.)
 GE kết hợp trí tưởng tượng và công nghệ để cải thiện điều kiện sống toàn cầu.
(Thông điệp cốt lõi của chiến dịch Ecomagination.)
“Green Is Green”

 Ecomagination was launched in 2005 to prove that environmental responsibility and

profitability can coexist.
(The slogan “Green Is Green” symbolizes this dual objective.)
 GE operates in over 175 countries and across many sectors like energy, aviation,
healthcare, and appliances.
(Its scale gives it broad influence in implementing sustainable practices.)
 Historically seen as anti-environmental, GE surprised many with its green
revolution.
(Shifted stance due to rising concerns about CO₂ emissions and climate change.)
 GE now aligns investor interests with environmental responsibility.
(Seeing the two as mutually reinforcing rather than opposing.)

 Ecomagination được công bố năm 2005 để chứng minh rằng lợi nhuận và trách
nhiệm môi trường có thể song hành.
(Khẩu hiệu “Green Is Green” mang ý nghĩa kép.)
 GE hoạt động ở hơn 175 quốc gia với nhiều lĩnh vực như năng lượng, hàng không, y
tế, đồ gia dụng.
(Quy mô lớn giúp GE áp dụng bền vững rộng khắp.)
 Từng bị xem là “chống môi trường”, GE khiến nhiều người bất ngờ khi chuyển
hướng xanh.
(Do áp lực về biến đổi khí hậu và CO₂.)
 GE giờ đây xem lợi ích nhà đầu tư và môi trường là tương hỗ.
(Không còn mâu thuẫn như trước.)

“Commitments and Goals”

 GE’s Ecomagination commits to five goals:

1. Reduce greenhouse gas (GHG) emissions and improve energy efficiency.
2. Double R&D investment in clean technologies.
3. Increase revenue from clean products.
4. Reduce global water use by 20%.
5. Keep the public informed.
 Managers are now evaluated on both financial and environmental performance.
(Accountability is built into leadership roles.)
 GE aimed for a 1% absolute reduction in GHG by 2012, avoiding a potential 40%
increase.
(Growth-adjusted goal was ambitious.)
 By 2014, GE surpassed its goals:
 o Reduced GHG by 31% from 2004 levels.
o Improved energy intensity by 32%.

 GE cam kết 5 mục tiêu:

1. Giảm phát thải GHG và tăng hiệu quả năng lượng.

2. Gấp đôi đầu tư R&D công nghệ sạch.
3. Tăng doanh thu từ sản phẩm xanh.
4. Giảm 20% lượng nước sử dụng.
5. Cung cấp thông tin minh bạch cho công chúng.

 Quản lý được đánh giá cả về tài chính lẫn môi trường.

(Tăng trách nhiệm trong vai trò lãnh đạo.)

 Mục tiêu giảm GHG 1% đến năm 2012 tương đương tránh tăng 40% theo tăng trưởng.
(Mục tiêu tương đối tham vọng.)

 Đến 2014, GE vượt mục tiêu:

 Giảm 31% GHG so với năm 2004.

 Cải thiện 32% hiệu suất năng lượng.

“A Little Consensus Seeking”

 GE collaborated with foreign governments and environmental organizations to

influence U.S. policy.
(Engaged in political advocacy to push for climate action.)
 Joined the U.S. Climate Action Partnership to shape global climate discussions.
(Positioned itself as a global green leader.)
 Recognized stricter environmental regulations outside the U.S. as future business
norms.
(Proactively adapting to international expectations.)

“Tìm đồng thuận”

 GE hợp tác với chính phủ nước ngoài và tổ chức môi trường để tác động chính sách
Mỹ.
(Đóng vai trò tích cực trong vận động hành lang khí hậu.)
 Gia nhập U.S. Climate Action Partnership để định hình thảo luận toàn cầu.
(Thể hiện vai trò lãnh đạo xanh.)
 Nhận thấy quy định môi trường nghiêm ngặt từ các chính phủ ngoài Mỹ.
(Chủ động thích nghi với môi trường pháp lý tương lai.)
“Technological Tactics and Eco-Friendly Products”

 GE doubled R&D spending in clean energy, water purification, and efficient

products.
(Targeted fast-growing environmental markets.)
 Cut water usage by 42% (target was 25%) from 2006 baseline.
(Exceeded environmental efficiency goals.)
 Ecomagination product line expanded from 17 to 140 by 2011, generating $200B
revenue (2010–2014).
(Demonstrated strong market demand for green solutions.)
 Acquisition of Alstom’s energy business gave GE offshore wind technology.
(Boosted leadership in renewable energy.)
 GE offers energy services and operates water/wind plants—more lucrative than
product sales.
(Transitioning from product seller to full-service provider.)
 GE uses its website and social media to fulfill its public commitment.
(Transparency aligns with its 5th Ecomagination goal.)

“Chiến lược công nghệ và sản phẩm xanh”

 GE tăng gấp đôi đầu tư vào R&D năng lượng sạch, lọc nước và sản phẩm hiệu suất
cao.
(Nhắm vào thị trường tăng trưởng nhanh.)
 Giảm sử dụng nước 42% (mục tiêu chỉ là 25%) so với năm 2006.
(Vượt xa cam kết ban đầu.)
 Số lượng sản phẩm Ecomagination tăng từ 17 lên 140, tạo ra 200 tỷ USD (2010–
2014).
(Thị trường phản hồi rất tích cực.)
 Mua mảng năng lượng của Alstom để có công nghệ gió ngoài khơi.
(Củng cố vị thế trong năng lượng tái tạo.)
 Chuyển sang cung cấp dịch vụ năng lượng, vận hành nhà máy lọc nước và gió.
(Sinh lời cao hơn sản xuất đơn thuần.)
 GE sử dụng website và mạng xã hội để minh bạch thông tin.
(Thực hiện cam kết thứ 5 của Ecomagination.

“Solving Environmental Problems Is Good Business”

 GE views green markets as profitable and aligned with strategic growth.

(Environmental efforts are economically motivated.)
 Ecomagination responded to customer insights after 18 months of consultation.
(Customers demanded greener products for a sustainable future.)
 GE sought to keep pace with Asian and European competitors investing in clean
tech.
(Global competition was also a driving factor.)
  Focusing on emerging markets like China and India, where pollution and
infrastructure needs are rising.
(GE sees long-term opportunity in fast-developing nations.)

“Giải quyết môi trường là kinh doanh tốt”

 GE tin rằng thị trường sản phẩm xanh vừa sinh lời vừa tăng sức cạnh tranh.
(Lợi ích môi trường và tài chính đồng thời đạt được.)
 Ecomagination được hình thành sau 18 tháng tham vấn với khách hàng.
(Khách hàng muốn sản phẩm thân thiện môi trường.)
 Cạnh tranh với châu Á và châu Âu thúc đẩy GE phải hành động.
(Không thể tụt hậu trong công nghệ sạch.)
 Tập trung vào các thị trường mới nổi như Trung Quốc, Ấn Độ.
(Nơi có nhu cầu hạ tầng và chống ô nhiễm cao.)

“Mixed Reactions”

 GE gained recognition, including top rankings and sustainability awards.

(Praised for proactive environmental strategy.)
 Skepticism persists: What if markets for green tech don’t grow fast enough?
(Uncertain returns remain a concern.)
 Developing nations may resist paying Western prices for clean technologies.
(Market access and pricing are potential barriers.)
 Internal culture may resist rapid change due to GE’s Six Sigma legacy.
(Risk-aversion could slow innovation adoption.)
 Some customers (especially utilities) and investors fear alienation from green
activism.
(Balancing activism with stakeholder interests is challenging.)

“Phản ứng trái chiều”

 GE nhận được nhiều giải thưởng và đánh giá cao.

(Ví dụ: Fortune, Dow Jones Sustainability Index.)
 Nhưng vẫn có nghi ngờ nếu thị trường xanh phát triển chậm.
(Rủi ro thị trường vẫn tồn tại.)
 Các nước đang phát triển có thể không đủ khả năng trả giá cao cho công nghệ sạch.
(Giá cả là rào cản lớn.)
 Văn hóa GE vốn ngại rủi ro có thể cản trở đổi mới nhanh.
(Thói quen theo Six Sigma có thể xung đột với sản phẩm mới.)
 Khách hàng ngành tiện ích và nhà đầu tư có thể phản đối chiến lược “xanh” quá đà.
(Khó giữ cân bằng giữa cải cách và lợi ích hiện hữu.)
Questions
⭐ 5-1. What are the major challenges GE faces in adopting a green strategy while keeping all of
its stakeholders happy?

1. Conflicting stakeholder interests

(Shareholders seek profitability; environmental groups demand sustainability; customers
want affordability.)
2. Internal resistance to cultural change
(GE’s traditional Six Sigma culture favors incremental change and avoids risky
innovation—barrier to adopting green strategy.)
3. Market uncertainty for green products
(There is no guarantee that green markets will grow fast enough to justify large
investments.)
4. Cost vs. Return dilemma
(R&D and clean tech investment is expensive—difficult to balance with short-term
profitability expectations.)
5. Skepticism from industrial customers
(Utility sector clients may reject eco-regulations and resist GE’s green innovations.)
6. Global regulatory fragmentation
(Different environmental laws in each country make it hard to apply a uniform strategy—
requires adaptation to local legal and cultural standards.)
7. Need for stakeholder consensus
(GE must manage relationships with governments, NGOs, investors, and clients
simultaneously—a key lesson from pressure group dynamics.)

Câu hỏi 1: Những thách thức lớn nào mà GE phải đối mặt khi áp dụng chiến lược "xanh"
mà vẫn làm hài lòng tất cả các bên liên quan?

1. Xung đột lợi ích giữa các bên liên quan

(Cổ đông muốn lợi nhuận; các nhóm bảo vệ môi trường yêu cầu tính bền vững; khách
hàng muốn giá cả hợp lý.)
2. Sự phản kháng nội bộ với thay đổi văn hóa
(Văn hóa truyền thống của GE dựa trên Six Sigma ưu tiên thay đổi dần dần và né tránh
rủi ro—đây là rào cản khi chuyển sang chiến lược xanh.)
3. Thị trường sản phẩm xanh chưa chắc chắn
(Không có gì đảm bảo rằng thị trường xanh sẽ phát triển đủ nhanh để biện minh cho các
khoản đầu tư lớn.)
4. Bài toán chi phí và lợi nhuận
(Chi phí cho nghiên cứu, phát triển và công nghệ sạch rất cao—khó cân bằng với kỳ
vọng lợi nhuận ngắn hạn.)
5. Hoài nghi từ khách hàng công nghiệp
(Khách hàng trong ngành tiện ích có thể phản đối quy định môi trường và không ủng hộ
sản phẩm xanh của GE.)
 6. Sự phân mảnh về luật môi trường trên toàn cầu
(Mỗi quốc gia có luật môi trường riêng khiến GE khó áp dụng một chiến lược đồng nhất
—phải điều chỉnh theo luật và văn hóa địa phương.)
7. Nhu cầu đạt được sự đồng thuận từ các bên liên quan
(GE phải cùng lúc quản lý mối quan hệ với chính phủ, các tổ chức NGO, nhà đầu tư và
khách hàng—đây là bài học từ các nhóm áp lực xã hội.)

⭐ 5-2. From the standpoint of environmental impact, do you think it’s more important for GE to
reduce its carbon footprint or to develop products that fit their Ecomagination strategy of being
energy efficient?

1. Long-term impact requires both—but product development has broader influence

(Developing energy-efficient products impacts many sectors and end-users, not just GE’s
internal emissions.)
2. Supports shared value creation
(Products that solve environmental problems while generating revenue align with the
“shared value” concept.)
3. Helps customers meet environmental goals
(Customers in regulated markets demand solutions that help them reduce emissions—
Ecomagination products meet this need.)
4. Global scalability and competitive advantage
(Product innovation can be scaled globally, contributing to GE’s competitiveness in
emerging and developed markets.)
5. Footprint reduction is limited in scope
(Carbon footprint reduction improves internal sustainability, but has less systemic effect
than market-based product innovation.)
6. Signals ethical leadership and commitment
(Offering green products shows proactive corporate ethics—fulfills expectations from
both society and investors.)
7. Aligned with sustainability and strategic growth
*(Environmental impact and long-term profitability both improve when green products
lead market transformation.)

Câu hỏi 2: Xét về tác động môi trường, bạn cho rằng điều gì quan trọng hơn đối với GE:
giảm lượng khí thải carbon hay phát triển các sản phẩm phù hợp với chiến lược
Ecomagination về hiệu quả năng lượng?

1. Tác động lâu dài cần cả hai – nhưng phát triển sản phẩm có ảnh hưởng rộng hơn
(Việc phát triển sản phẩm tiết kiệm năng lượng có thể ảnh hưởng đến nhiều lĩnh vực và
người dùng hơn, không chỉ riêng nội bộ GE.)
2. Hỗ trợ tạo ra giá trị chia sẻ (Shared Value)
(Sản phẩm vừa giải quyết vấn đề môi trường vừa tạo ra lợi nhuận phù hợp với khái niệm
“giá trị chia sẻ”.)
3. Giúp khách hàng đạt mục tiêu môi trường
(Khách hàng ở các thị trường có quy định nghiêm ngặt cần giải pháp giảm phát thải—
sản phẩm Ecomagination đáp ứng nhu cầu đó.)
4. Có thể mở rộng toàn cầu và tăng lợi thế cạnh tranh
(Đổi mới sản phẩm có thể áp dụng trên nhiều thị trường, giúp GE duy trì vị thế cạnh
tranh ở cả thị trường phát triển lẫn mới nổi.)
5. Giảm dấu chân carbon có phạm vi hạn chế hơn
(Việc cắt giảm khí thải chỉ cải thiện hoạt động nội bộ, trong khi đổi mới sản phẩm có thể
tạo ra tác động lớn hơn đến toàn thị trường.)
6. Thể hiện cam kết đạo đức và vai trò lãnh đạo
(Việc cung cấp sản phẩm xanh cho thấy GE chủ động về đạo đức doanh nghiệp—đáp
ứng kỳ vọng từ cả xã hội lẫn nhà đầu tư.)
7. Phù hợp với định hướng phát triển bền vững và tăng trưởng chiến lược
(Cả tác động môi trường và lợi nhuận dài hạn sẽ cùng tăng khi sản phẩm xanh dẫn dắt
quá trình chuyển đổi thị trường.)