Improving Sustainability at General Electric (GE)

Improving Sustainability at general voltaic (GE)INTRODUCTIONThe General Electric Compevery (GE from henceforth) is an Ameri tail assembly Multinational stack up founded in 1892 by the merger of Ameri potentiometer Inventor Thomas Alva Edisons Edison General Electric Comp some(prenominal) and Thomson-Houston Electric Company .GE currently operates at the same age in five divers(prenominal) stemma sectors namely Energy (e.g. oil and gas), Media (as NBC planetary in atomic number 18as such(prenominal) as ccapable and film), applied science Infrastructure (e.g. melodic phrase and Healthc atomic number 18), Home and line of business Solutions(Appliances and Intelligent platforms) and Finance ( as GE not bad(p) concern in both commercial and consumer finance). GE currently has businesses in just ab protrude 160 countries and about 300,000 employees nigh the globe. The companys headquarters is located at 3135 Easton Turnpike, Fair flying field, Connecti sign on, USA.As a gl obal conglomerate GE has had a dis rolled history with regards to air and irrigate pollution dating back to the latterly 1940s and had al managements been a target of criticism from public officials and environmentalists in the US. However, things took a turn for the better when on the 9th of May, 2005 GEs CEO Jeffery Immelt announced the companys impertinent environmental opening move cal lead Ecomagination. In Mr Immelts words, the take on of the initiative is to focus our anomalous competency, technology, manufacturing, and infrastructure capabilities to develop tomorrows solutions such as solar energy, hybrid locomotives, supply cells, lower-emission aircraft engines, wakeer and sozzleder materials, efficient lighting, and piss purification technology. As can be prised, the adoption of such an initiative was actu completelyy bold especially presumption the large size of GE and it legion(predicate) businesses around the globe nevertheless, the initiative was apply across the entire company and is currently in its ordinal year of doing.As Ecomagination is GEs main sustainability syllabus, the documents retrieved from the company and use of goods and servicesd for the purpose of this workbook atomic number 18 in the form of Annual Sustainability Reports which atomic number 18 publicly available at the Ecomagination website (http//ge.ecomagination.com/ account.html). The reports are currently available for the years 2005 to 2009 in PDF format and can be buckloaded and viewed by the public.IMPROVING SUSTAINABILITY AT GEAs menti singled in the introduction, GE has sought to quell criticism of its environmental records and remedy its sustainability by implementing a company-wide sustainability initiative launched in 2005 called Ecomagination. The initiative encompasses an array of changes and loyaltys forming a freehanded strategy that is implemented with the aim of not just making GE a global leader in ground of sustainability, excep t besides with the accompanying belief that commitment towards sustainable practices, products and services will go for GE a competitive advantage and is at that placefore worth the labor and any initial costs.In smart set to achieve its goals of becoming a more(prenominal) than sustainable company and to join on their overall sustainability performance, GE through Ecomagination has committed to fetching the following cover stepsReduce piddle use and improve water system reuse As of 2006 GEs freshwater was totalling about 15.3 unity million million gallons and so the company announced its goal of parapraxis intake by 20% by 2012. By 2009, GEs water economic consumption was down 30% to about10.7 trillion gallons which further prompted the company to set a circumscribed goal of aiming for a 25% reduction by 2015. One way GE was able to reduce its freshwater consumption was by conducting Kaizen linebacker blitzing water reduction events at three of the largest consu mption sites agree to GE reports, the Kaizan go up employs multi-functional teams tasked with disbursement a concentrated week studying water utilisation at a prone facility with the ultimate aim of developing water reduction projects.Double investments in clean investigate and Development At the launch of Ecomagination, GE committed to increase its RD spending on clean technologies from about $700 million in 2004 to $1.5 billion by 2010 by the end of 2009 a total of about $5 billion had been spent on RD for clean technologies which according to GE reports sired about $70 billion in tax revenue convey to the new technologies and products from the Ecomagination initiative. In light of this, in 2010 GE announced a commitment to invest an excess $10 billion in Ecomagination by 2015.Reduce Greenhouse Emissions and improve Energy efficiency of its current operations At the launch of Ecomagination, scope 2004 as a baseline GE do a commitment to cut 1% of its greenhouse gas (GHG) emissions by 2012 and reduce the color of its GHG emissions 30% by 2008. As of 2011, GE has been successful in cutting GHG emission by 22% and withal reduced the garishness of its GHG emissions by 39%. check to GE reports, overall energy intensity has improve by 34% and the company hopes to improve by up to 50% for all its operations by 2015.Increase revenues from Ecomagination products In 2009, revenues from Ecomagination grew by 6% to about $18 billion despite the monetary crisis. GE projects Ecomagination revenues to save to grow at double the rate of total GE revenues in the next five years and eventually account for a larger proportion of total sales.Communicate with the public GE has resorted to keeping parley channels open and in addition engaging more with the public regarding Ecomagination efforts. For example, as part of its $200 million innovation experiment, the company announced the Ecomagination quarrel running from January to March which encourages entrepre neurs, students etc. to present ideas for future clean energy technologies with the top 5 entries to be awarded $100,000 each.GEs STAGE OF CORPORATE SUSTAINABILITYEmploying the concept of the sise phases of corporate sustainability as mentioned by Dexter Dunphy and Jodie Benveniste in their book authorize Sustainability The Corporate Challenge of the 2 initiative Century, one would place GE in the strategic sustainability. Specifically, GE is a HS5 in name of Human Sustainability and simultaneously an ES5 in toll of Ecological sustainability.The justification for place GE in the HS5 category of the strategic sustainability phase has to do with the fact that as a company GE has a well-documented history of human nurture and teach programmes that is part of the GE culture. At the centre of this is John F Welch (Jack) leading Development Centre establish in 1956 and named after Jack Welch the noted ex-CEO of GE who believed in the principle that a company was wholly as good a s it people. Currently GE invests about $1 billion annually on training and education programmes for GE employees. Now, it could be argued that given(p) GEs ache standing commitment to Human sustainability, one should place them as a HS6 (Ideological Commitment Phase) this argument is debateable and for the purpose of this workbook, GE is placed as a HS5 because even though it scores high on breeding and training, its policies are very strict and its culture very competitive which has led to the consistent termination of the under(a)performing 20% of its workforce. As a result one could argue that although GE invests much in its people, its culture does not put too much effort in aiding underperformers and simply cuts them off.On the separate hand, in terms of Ecological sustainability GE is labelled as an ES5 thanks in large part to the launch of its Ecomgination initiative in 2005. assumption the fact that GE is over a century old, its decision to move in sustainability in 2005 was bold and historic one and going into the future, one can expect the initiative to be implement across all its business around the globe due in large part to its very strong culture. Put in perspective, as a company GE has progressed through a long phase of active antagonism in its early years, through the indifference phase for most of the 80s and 90s before in the end making a strong commitment in 2005 with the announcement of Ecomagination. belatedly GE has been very active in the area of sustainability from cutting emissions and water usage to investing in clean technologies and seeking ideas from the public, the company has been stratified on various indices as one of the top five sustainability leaders over the past five years. Also the argument could be make that GE should be labelled as an ES6, while true, the fact is that given the large size of a company like GE and its numerous businesses in diverse sectors across the globe its sustainability polices will need time to be fully implemented and assessed.GEs COVERAGE OF ENVIRONMENTAL DIMENSIONSCLIMATE variegate Taking into account the large size and global reach of GE as a company, climate change can be highlighted as a key issue that poses a challenge for GE travel forward. In light of this fact, as part of the Ecomagination initiative GE has been able to successfully cut its GHG emissions by 22% and overly reduced its GHG intensity by 39%, using 2004 as a baseline. Figure 1 below shows the distribution of usable GHG emissions by GE in 2009 according to type Source GE GHG InventoryAs observed 85% of their emissions are made up of CO2 while 13% are consist of HFCs which are usually emitted during foam-blowing operations at its refrigerator manufacturing plants, in total they accounted for approximately 98% of GEs emissions in that year.In order to take on the problem GE has established a GHG inventory modelled after the origination Resources Institute/World Business Council for Sustain able Development (WRI/WBCSD) protocol. Going by this inventory GE employs the obtain approach which accounts for GHG emissions over which the Company has control the protocol is subdivided into three scope categories namely Scope 1 which accounts for go GHG emissions from sources under the control of the reporting company, Scope 2 which accounts for indirect emissions import or purchased electricity, water or steam and finally Scope 3 which accounts for indirect emissions which result from a reporting companys activities but occur from sources belong to another(prenominal) entity.WATER As was highlighted earlier on, from 2006 to 2009 GE successfully cut its freshwater consumption by 30% and is on pace for an surplus 25% reduction by 2015. . This was achievable through the installation of GE sensing ultrasonic flow meters which was installed at the largest water consumption site. The sensors supportd a more accurate measure of the total flow from 2006 and led to the find of an o verestimation of about 2.2 billion gallons from the figures previously calculated. In addition, more concrete steps were taken to address water usage such as the replacement of single-speed pumps with new variable frequency drive pumps, improved valve operation and as well as the previously mentioned the running of Kaizen blitz water reduction events to name a few. In addition, GE currently has a project underway aimed at reducing its global water usage by about 5%, the project is running at one of its US plants and employs the use of GE water process technology equipment in the form of nanofilteration and ultrafilteration technologies to recycle and reuse water.In addition, GE has also established a water inventory protocol based on the previously mentioned WRI/WBCSD GHG protocol. As a feature of this, GE employs a control approach and accounts for freshwater use at so called criteria sites. The criteria sites are simply any GE sites that use a total of 15 million gallons or more annually from a 2006 baseline and subsequently.Quality assurance is another measure by GE that has been implemented with the aim of increasing the truth of the water use inventory and eliminating and accounting for errors.WASTE MANAGEMENT In regards to bungle management GE gathers data for all of its operations that generate more than 100 metric tons of hazardous be adrift and/or more than 500 metric tons of non-hazardous industrial waste. Currently there are three broad schemes put in place to specifically address waste management.The first is the Waste Site Qualification create by mental act (WSQP) which ensures that waste generated by GE is taken through recycling, preaching and giving medication facilities that meet GE rigorous environmental and safety standards. The standards require waste management sites to improve their facilities beyond set topical anesthetic standards in order to gain GE approval because GE sites can only use GE approved facilities regardless of th e summation of waste they generate. As of 2009 the WSQP programme has been expanded to about 500 GE manufacturing locations globally.Next in GEs waste management scheme are reportable spills through which GE tracks any spill on or from a site that is reportable to regulatory authorities. As of 2005 GE divided the spills into spills/releases to water such as lake, naval etc. and spills/releases not to water consisting of any other kind(s) of spills.Lastly, GE has an operational leaders Environment, Health, Safety (EHS) training manuals that provide information on how to get a line waste reduction opportunities through the use of lean manufacturing technologies.GEs CONTRIBUTION TO WIDER stinting PERFORMANCEWAGES AND BENEFITS With GE currently operating in more than 100 countries around the globe, the company is very active in terms of job creation and employee development. As shown in Figure 2 below, taking into account its total global workforce of about 300,000 people in 2009, ab out 154,000 people were non-US showing its interest in hiring and developing local people.Source GE MetricsIn addition, GE provides benefits to it employees beyond their design salaries that is aimed at ensuring heir financial security. It provides a variety of benefit packages to legal employees across its various businesses around the globe such as seclusion and health benefit plans that cover employees and their families. jibe to GE data, it currently has an miscellanea of pension plans that provide cover for close to 635,000 employees and retirees around the globe.SHARE place AND RETURN ON INVESTMENT An examination of GEs stock price from the 1st April, 2010 to 1st April, 2011 shows an increase of about a $2 rise from $18.33 to $20.34 signifying an increase in value for shareholders in spite of the recent recession. Also GEs financial statement at the fiscal year ending 2010 shows the company made a gross profit of over $11 billion, once over again confirming the fact tha t it is providing investors a large return on their investments. brass TAXES AND FEES In addition, GE also paid out close to $1 billion in income taxes to the government.USE OF LOCAL SUPPLIERS AND SUPPORT FOR LOCAL BUSINESSES In an effort to kindle its supply chain management, GE launched a supplier Diversity Programme in 1974. The aim of the programme is to engage diverse groups of suppliers in order to enhance economic opportunity according to the GE the core components of the programme are National Minority Development Council, Womens Business Enterprise National Council and a host of state and local development councils.Source GE MetricsFigure 3 above shows a 2009 distribution of GEs assessments of potential suppliers by region, its findings and the categories of its finding based on the issue(s) of concern. According to reports, GE employs and eyes always open approach in terms of assessment by investigating concerns raised by external sources such as the press reports and p ursuing corrective measures immediately.SUSTAINABLE OF PRODUCTS/SERVICESAccording to GEs 2009 Ecomagination report, revenues grew by about 6% to $18 billion courtesy of products launched under the initiative. GE currently uses an Ecomagination Product Review (EPR) to determine not only which offerings are included in the Ecomagination portfolio but also to ensure that the products improve customers value proposition and environmental performance. In addition, GE has developed a process for what it terms New Product Introduction (NPI) which focuses on consumer necessitate and views environmental performance as a key customer priority. This exemplifies GEs rocking chair to grave approach of being a responsible corporate citizen by not focusing solely on commercial factors but also environmental and health impacts of their products and services.As a global conglomerate, GE is involved in the provision of a diverse set of products and services from appliances and airwave to healthcar e and financial services.As Figure 4 shows below, most of GEs revenue is derived from offering financial services through GE Capital and as such most people even label it as a financial company with a manufacturing section.Source GE MetricsThe manufacturing arm in the form of the provision of technology infrastructure is another of GEs significant business units and perhaps the most well-known.Taking these facts into account, this workbook will focus briefly on how these two major GE businesses (GE Capital and GE engine room Infrastructure) and their products could be made more sustainable.GE Capital As mentioned earlier, GE has invested significantly in cleaner technologies and is also involved in financing and providing loans to support external businesses with a focus on innovative and sustainable practices and products. In an effort to make GE Capital more sustainable, GE could gradually consider putting more resources in telecommuting by doing this there will be less need fo r large GE buildings and offices around the globe. In addition, it could lead the way by installing most of the innovative technologies derived from its Ecomagination initiative at its GE Capital offices.GE Technology Infrastructure As GEs major manufacturing arm has made significant gains especially by focusing on the production of more sustainable products via the Ecomagination initiative. As a global manufacturing force with most of its products available in a range of places such homes, airports, banks and schools to name a few, GE has a with child(p) avenue to influence a global shift to the use of more sustainable products. GE can also improve this business unit, by making a conscious effort to minimize emission, water usage and improving waste management. There is no doubt that this is probably the fraction with the most sustainability concern due to the nature of the operations involved in the production process, as such GE would do well to also invite external evaluators to assess its plants and provide more sustainable solutions to enhance its production process.ETHICAL CULTUREGE is well known for its strong company culture and its wholeness policy is laid out in a document entitled the spirit and the letter which all employees are required to pledge to and sign. This is accompanied by an ombudsman process that allows employees to raise and report ethical concerns with impunity.GEs integrity policy covers the following parties Directors, Employees, Officers, Subsidiaries and Controlled Affiliates, Non- Controlled Affiliates and all Third parties representing GE.Specifically, all employees are expected to understand GEs policies and are obligated to raise any concerns they have while leaders are obligated to prevent form issues from arising, detect them when and if they arise and respond to them expediently.From close examination, one can observe that GEs integrity policy is quite plain and easy to understand, it is specific and particular as it lays out the followingThe parties bound to the policy.What is expected of the parties in terms of compliance and their obligationsAn exhaustible list of various channels and steps to be taken in terms of reporting concerns.It explains how and when the process will be carried outThe penalties involved when the policy is violatedAnd most importantly a bold statement that prohibits and punishes any form of retaliation against those who raise concerns.The integrity policy covers a broad range of parties and lays out in exposit how those parties are to be treated and how related ethical concerns are to be treated. A snapshot of this is a followsEmployees With regards to its staff, their rights, obligations and expected conduct is laid out at the beginning of the integrity policy. For instance, employees are encouraged to raise concerns early, they also have the right to remain anonymous but can pack not to, their privateity is respected and most of it is correctly emphasized that ret aliation is prohibited.Customers Regarding the treatment of customers, all forms of improper payments are prohibited and guidelines are provide on how to deal with various potential scenarios however, reasonable expenditures and gifts are acceptable but subject to corporate guidelines.Suppliers GEs suppliers are also expected to abide by lawful guidelines such as intermediate work practices and quality standards. Overall, they are expected to abide by national laws and regulations and also ensure the safeguarding of confidential information.Wider Community GEs integrity policy also provides guidelines for dealing with governments, preventing money laundering, safeguarding clients privacy, ensuring fair competition and dealing with local communities. The policy is very specific and provides clear expectations and steps on how to deal with the aforementioned members of the wider community.It is evident that GE has parlayed it long experience in doing business around the globe into cr eating an ethical engrave of conduct that is unambiguous and rigorous in addressing all stakeholders in its businesses around the world.KNOWLEDGE REVIEW FEATURES OF EFFECTIVE SUSTAINABILITY MONITORING SYSTEMSThe issue of sustainability has become more serious and highly debated in recent times, given the large amount of companies that claim to be committed to sustainable practices and products, this section will provide an annotated bibliography that reviews the features of effective sustainability monitoring systems. By doing this, the aim is to gain perspectives from experts in the field of sustainability that lay out what effective sustainability monitoring systems should contain and as such provide use with a set of requirements with which to assess the currents systems being implemented by various companies today.