Jeffrey Immelt: Making GE Sustainable

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GE had not been known over the years as a particularly environment-friendly company. In fact, it was considered for a long time as one of the biggest corporate polluters in the US. Though the company delivered outstanding returns to shareholders, it lagged behind on the social responsibility front. However, GE chose to ignore its critics and gave precedence to profitability and financial goals rather than social and environmental objectives. During the 1980s and 1990s, GE stonewalled and delayed most of its environmental initiatives, and this led to significant negative equity among many in the environmental community. One of the biggest environmental controversies involving GE concerned the pollution of the Hudson and Housatonic rivers in the US...

In late 2004, at a senior-level brainstorming session, Immelt set the stage for the company-wide green initiative Ecomagination. Initially, the proposal was greeted with skepticism by a majority of the senior level management as they felt that it would require huge investments. Senior executives posed questions such as "Do we want to attract attention?" and "Will this create problems around the Hudson River [issue]?" during internal discussions. Only six out of 35 executives went with Immelt on the idea while the rest argued that the initiative would cost too much and it would be undermined by GE’s other environmental issues. Some executives felt that it would be difficult for GE to shift its focus from a conservative operations-and-management strategy to a breakthrough innovation strategy. Since GE comprised many businesses, convincing the heads of each business unit was one of the toughest parts of the execution process...

Over the years, Ecomagination gained momentum as public awareness and commitment grew around sustainability. With the acceptance of energy-efficient products in the market, GE doubled its investments on the initiative. In 2008, the value of the GE brand grew by 16.9%, to US$51.6 billion, according to Interbrand . "The key element of Ecomagination is that it’s happening before it has to. It is leadership by example," said Catarina Gunnarsson-Tagmark, International Brand Manager of GE...

Critics were of the view that most of Immelt's investments in the Ecomagination program had not produced knockout returns. Patrick Michaels, senior fellow in environmental studies at the Cato Institute , said, "Mr. Immelt is overestimating the urgency of these threats in my opinion. As it is, G.E.'s virtuous talk has had virtually no positive effect on its share price. What that says to me, is the markets aren’t buying it." Critics alleged that Immelt had launched Ecomagination to deflect attention from the company's negligent stance toward environmental matters and to cover up its poor environmental image. Some analysts felt that most of GE's environmental initiatives were reactive in nature with respect to the company's past...

Convincing potential investors, partners, and customers to invest in clean products was also a big challenge. With customers’ trust in green business at an all-time low due to the economic slump, analysts were worried that in the future, Immelt's investments in clean energy would not prove profitable. Moreover, the global political and environmental climates imposed different demands on green initiatives...

In the six months ended June 2011, GE's revenues were US$73.96 billion, up 1% compared to the corresponding period of the previous year. Net earnings increased by 42% to .US$ 7.37 billion compared to a year earlier . For the year ended 2010, GE reported revenues of US$150.2 billion, compared with US$155.3 billion in 2009.Despite the backlash, Immelt maintained his stance on environmental issues and planned to expand and involve more GE businesses in the initiative. He was of the view that Ecomagination had huge scope for expansion in the future as green technologies would be able to address new problems, create new markets, and reach underserved customers...

Exhibit I: The Football League in England
Exhibit II: The Football League in Europe
Exhibit III: Top 10 Football Clubs in Europe
Exhibit IV: Titles Won by Manchester United with Ferguson as The Manager
Exhibit V: Young Talent at MUFC under Ferguson

Exhibit I: GE's Performance under Immelt
Exhibit II: GE's Ten-year Stock Chart
Exhibit III: Jeff Immelt – Climbing the Corporate Ladder at GE
Exhibit IV: Jeff Immelt's Leadership Checklist
Exhibit V: GE's Organizational Structure*
Exhibit VI: Ecomagination Statistics
Exhibit VII: Ecomagination Innovations (2010)
Exhibit VIII-a: Selected Financials of GE
Exhibit VIII-b: Selected Financials of GE - Quarterly

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