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| Thought Leaders: Investing |
Louder than Words
Christine Arena
11/01/2006
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Sorting the Cynics
One way investors can distinguish between true and
false CSR is to monitor the quality and quantity of value produced. The bigger
the overall impact, the more substantive the approach. As with any business
practice, great CSR is all about great results. Truly responsible companies
wisely invest in two things: unmet needs and systemic change. They acknowledge
what society demands, where they fall short and what they uniquely provide—then
connect the dots.
In a strategy it calls “Ecomagination,” General Electric
plans to tackle problems such as climate change and water scarcity through the
application of innovative technologies. “We’re launching Ecomagination not
because it’s trendy or moral, but because it will accelerate our growth and make
us more competitive,” CEO Jeffrey Immelt told the press in 2005. Indeed, GE
reports that revenues from Ecomagination products, such as hybrid locomotives
and solar-powered water purifiers, reached $10 billion in 2005.
By
developing advances like Bio-PDO, an environmentally friendly polymer, DuPont
has saved more than $2 billion in overhead costs, prevented 11 metric tons of
CO2 from entering the atmosphere and accounted for 17 percent of its $26.6
billion in revenue. By 2010, DuPont hopes to derive 25 percent of its total
revenue through its endeavors.
GE and DuPont are not perfect companies with
flawless histories. Each still engages in activities that concern
environmentalists and other interest groups. But they are high-purpose companies
because their current business performance is driven by the values for which
they claim to stand. By acting on these values, these companies make the
environment—and their investors—better off.  | Christine Arena is author of The High-Purpose Company: The Truly Responsible–and Highly Profitable–Firms That Are Changing Business Now,
due out in January. |
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