PROFITS AND PURPOSE

Making money while making a positive difference in the lives of human beings

"Many leaders of big organizations don't believe that change is possible, but if you look at history, things do change." —Larry Page - Founder, Google

Ecomagination: It's Not Easy Being Green

IMAGINE THE UNIMAGINABLE: A Fortune 500 energy company becoming eco-conscious on its own without being forced to by litigation or regulation. Well, once upon a time in May 2005, General Electric (GE) launched its “Ecomagination” campaign to promote and create eco-friendly products. CEO Jeff Immelt claimed it was necessary for the energy giant to answer the needs of planet, people, and profits. Along with new products, GE boldly committed to significantly reducing its carbon footprint by 2010. Early on, GE began to take heat for what environmentalists call “greenwashing.” Claims that GE exaggerated the greening of its business initiatives cast doubt over GE’s environmental responsibility. As GE pursued Ecomagination, the Wall Street Journal reported in 2007 that GE was also pursuing coal and oil energy production.

Despite criticism, it is clear that Ecomagination is making some progress. Immelt claims GE will meet its 2010 target with sales for eco-products reaching $20,000,000. GE’s new planet saving products include hybrid electric vehicles, battery automobile technology, and Light Emitting Diode bulbs used in 500 Wal-Mart Stores. CEO Immelt states that green technology is no longer a “fringe” issue. Green has gone mainstream. At some point in the not-so-distant future, consumers will set the agenda for big business eco-products. They will not pay the green unless the product is truly green. GE is wise to see the trend on the horizon.

A New Commodity Exchange: Trading Carbon

THE NEW COMMODITY EXCHANGE called Carbon Trading proves that global capital markets can make money while serving the planet. Climate exchanges are springing up around the globe to capitalize on the clean air, clean world boom. Sustainable business is not easy to maintain for some corporations who produce more than their “share” of environmentally damaging emissions. The resolution has evolved to buying carbon credits to offset carbon emissions. Where would a company buy “carbon credits” you may wonder? The Chicago Climate Exchange (CCX) bills itself as “the world’s first and North America’s only Greenhouse Gas Emissions Registry, Reduction, & Trading System. CCX was founded by economist Richard Sandor in 2003 as a “legally binding integrated trading system.” Named “father of carbon trading” in 2007, Sandor was also cited as “Hero of the Planet” by Time Magazine back in 2002.

The impressively long list of CCX trading members includes Dow Corning, DuPont, and Ford. Companies commit to reducing emissions by 1% per year in accordance to their emissions baseline. An independent auditor, the Financial Industry Regulatory Authority (FINRA, formerly NASD), sets the standards for voluntary legally binding emission control and reduction. Companies who successfully reduce emissions below their target can sell carbon credits to companies who have not yet reached their targets.

Evolutionary Markets (EM) based in White Plains, New York and London claims to be the “world's highest volume environmental broker, having facilitated more than $50 billion in trades of environmental commodities, including more trades of Certified Emissions Reductions (CERs) than any other broker.” EM claims to assist governments in designing effective carbon markets. EM brokered the first European Union’s International Emissions Trade under the Kyoto Protocol in 2003.

When the US (the world’s largest carbon producer) finally catches up to the EU by establishing legal standards for sustainable business, these markets and their brokers will become enormous. In the meantime, EM and CCX are profiting handsomely while answering the call to protect nature’s bounty.

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