Ecomagination: Driving Sustainable Growth for GE

Case Code: BSTR387 Case Length: 20 Pages Period: 2005-2010 Pub Date: 2011 Teaching Note: Available

Price: Rs.600 Organization: General Electric Company Industry: Diversified Countries: Global Themes: Corporate Social Responsibility, CSR as Strategy, Green Marketing

Abstract Case Intro 1 Case Intro 2 Excerpts

Abstract

This case is about US-based diversified conglomerate General Electric Company (GE) and its environmental initiative Ecomagination that was launched in mid-2005. Through this initiative, the company invested liberally in renewable energy and cleaner technologies.

It also promoted energy-efficient Ecomagination products through its marketing campaigns. Besides, the company set targets for reducing its greenhouse gas emissions and for increasing the energy efficiency of its operations. Industry observers noted that the strategy had been successful for GE as it was able to make good money.

GE, which had set a target of investing US$ 5 billion in Ecomagination research and development (R&D) by 2010, surpassed the goal on June 24, 2009, one year ahead of schedule. The company was also on its way to achieving the US$20 billion mark in revenues as it had already generated US$18 billion in revenues from Ecomagination products in 2009.

Some analysts lauded GE's Ecomagination strategy saying that the company was addressing global issues such as climate change, greenhouse gas emissions, and energy conservation, while at the same time making money. However, its critics felt that Ecomagination was a business savvy move to resurrect GE's image as an environmentally friendly company. They felt that the initiative was over-hyped and that GE was pursing profits in the name of clean technologies. Some even called it greenwashing. However, GE continued its commitment to Ecomagination and expected Ecomagination revenue to grow at twice the rate of total company revenue by 2015. This would give Ecomagination an even larger share of total company sales.

Issues

The case is structured to achieve the following teaching objectives

• Understand how GE employed CSR as a strategy with its Ecomagination initiative
• Understand the importance of sustainability (especially environmental sustainability), and the role that renewable energy and clean technologies could play in this regard
• Understand the role leading players such as GE can play in addressing global issues such as climate change, greenhouse gas emissions, and energy conservation and also benefit in the process
• Analyze the Ecomagination strategy of GE
• Understand the reasons for the criticism faced by GE for its Ecomagination initiative and discuss and debate whether this was an attempt by the company to indulge in greenwashing

Contents

Green Can Be Green!
About GE
Winds of Change at GE
The Launch of Ecomagination
Ecomagination at Work
Results
The Other View
Looking Ahead
Exhibits

Keywords

Corporate Social Responsibility, CSR as a Strategy, Stakeholder tension, Green Marketing, Greenwashing, Business Ethics, Sustainability, Environmental sustainability, Renewable energy, Clean technologies, Energy conservation, Climate change, Greenhouse gas emissions, Ecomagination, General Electric Company

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