A Promise for a Better World

What is a promise? An agreement, a guarantee, a pledge, a handshake, a contract? We often hear about brand promise, that is, what benefits a brand delivers to its loyal customers. The next decade promises to bring more sustainable products, more responsible corporations and a new valuation on money that includes not only financial returns, but social returns as well. We see a trend among Fortune 1000 firms who are now hinting what their vision on brand and image promises for the next decade in the products they are producing today.

Fortune 1,000 corporations now represent some of the largest economies in the world. Their buying power and influence on consumer behavior and perception is enormous, almost unwieldy. The potential to abuse such power for corporate profit is high. However, the pace and visibility of modern business is also different than it was 25 years ago. Shareholder, consumers, advocacy groups, government and philanthropic organizations have enormous power as well, a market-based check and balance that is not perfect, but can surprise as technology and access to information have made corporate behavior much more transparent in this 24-7 world. Market movers are shifting their product and service strategies with the stealth and force of a tiger.

Realizing that they can create better products for a better world while also reaping strong financial returns for shareholders; many Fortune 1,000 firms are now reinventing the brand and corporate promise to their customers and shareholders to now include elements of corporate social responsibility and social response product development.

We share some of the trends we see in this mega trend transforming our futures:

GE, the mammoth $163.4 billion diversified products company is touting its Ecomagination initiative focused on new brand promises from products ranging from advanced membrane technology to clean coal technologies, advanced light solutions using compact fluorescent, halogen or LED technology, water desalination products and cleaner burning locomotive and aircraft engines.

With sales exceeding $25.6 billion Tyson Foods is the world’s largest meat-processing company. It serves retail, wholesale and foodservice customers in more than 80 countries. Seeking to be more than a meat processor, Tyson Foods is now utilizing its waste food by products (animal fats, vegetable oils and greases) as a feedstock for synthetic and renewable fuels production in a strategic partnership with Syntroleum Corporation. Tyson Foods has also teamed with ConocoPhillips to produce the next generation of renewable diesel fuel.

With sales topping $348.6 billion, retail giant Wal-Mart is an economy unto itself. Wal-Mart has been reinventing its corporate reputation and brand promise by taking a serious look at ethical product sourcing, procurement of renewable energy, waste reduction and more active promotion and sale of sustainable products, many of which are certified like ten fish products that the Marine Stewardship Council certifies as having met more stringent environmental criteria. Wal-Mart is now looking at the products it carries from food to clothing to electronics and working with industry trade associations and others to help identify more sustainable products it can promote and provide to consumers.

LP Corporation, the $2.2 billion wood products company is promoting their promise to save energy through their Radiant Barrier LP TechShield® product line.

And, Toyota Motor Corporation has perfected the concept of a brand promise. With more than $202.8 billion in sales in 2007 the company is outpacing all other automotive manufacturers in production and sales worldwide. Having led the automotive revolution into and era of more fuel-efficient vehicles with the hybrid synergy drive, Toyota is beloved by its customers and now revered by its peers.

We see promises for a better world in each of these firms listed. We also see them in dozens more now shaping the money markets. Every sector, financial, real estate, industrial products, energy, automotive, consumer products and so on has social response leaders now promising a better future. These firms are shaping the products we used to associate with price, quality and performance in an economically competitive world. They are also shaping new products based on a socially responsible competitive world. The competitive landscape has shifted and the tigers are on the prowl.

Tell us what “promises for a better world” you see unfolding from Fortune 1,000 firms.

Mark C. Coleman
Senior Associate & World Inc. Case Leader, AHC Group, Inc.
Mark@ahcgroup.com

“Dare to Dream” Big: How New Social Response Partnerships Are Spawning Effective, Timely and Innovative Corporate & Social Collaborations

Addressing the Gap in 21st Century Science & Engineering Leaders - A unique collaboration between ExxonMobil, The Harris Foundation, and 19 University Campuses sets the stage for a new era of social response leadership.

Across the next ten to twenty years, the U.S. may face a critical shortage of engineers, scientists and other technically trained workers as the baby boomer generation settles in on retiring and reinventing their futures. There are an estimated 77 million baby boomers (those born between 1946 and 1964) in the U.S. The first large wave of them began to retire in 2006 and, the U.S. Bureau of Labor Statistics has estimated that as many as “10 million jobs will go unfilled in 2010” as this first wave of the boomer generation retires. With much of the know-how, technical expertise and historic understanding of how large systems work embedded in the minds of millions of engineers, scientists and other technical experts of the boomer generation, there is great potential to have a critical gap in knowledge for 10-to-20 years.

Think about it, the knowledge, know-how and intellect of energy distribution systems; oil refineries, pipeline transport and storage; transportation, water, research and innovation infrastructure has largely been built, managed and defined by millions of baby boomers. To their credit, it is an amazing accomplishment that the U.S. has had such a promising and talented workforce. To our potential detriment, without new blood in technical and science disciplines, the U.S. stands to lose its global prominence it has held from a competitive, innovation, and quality of life standpoint.

Seeking to address this gap in knowledge and expertise, The Harris Foundation and ExxonMobil have teamed up to create the ExxonMobil Bernard Harris Summer Science Camp (BHSSC). The BHSSC is a two-week camp, free to qualified students, that offers innovative programs to “enahce middle school students’ knowledge in science, technology, engineering and mathematics (STEM) while encouraging youth to stay in school and fostering leadership and citizenship”. The BHSSC summer program will, through the help of ExxonMobil reach more than 1,000 students as it is implemented at 19 universities with a total of 20 camps. During the two-week program students will attend classes in STEM curriculum taught by faculty of participating universities and secondary classroom teachers. The program will also feature hands on individual, group and teaming projects, field excursions and guest speakers – each focused on creating a well rounded experience that encourages students to meet their full potential in STEM disciplines.

The Harris Foundation is a non-profit organization that was founded in 1998 by Bernard Harris a M.D. and past NASA astronaut, physician and businessman. The Harris Foundation “supports programs that empower individuals, in particular minorities and economically and/or socially disadvantaged, to recognize their potential and pursue their dreams”. To date more than 2,500 K-12 students have participated in The Harris Foundation programs. The partnership with ExxonMobil will help Bernard Harris and his social foundation achieve much greater reach, in pursuit of a better future. As the philanthropic arm of ExxonMobil, the ExxonMobil Foundation has provided funding to K-12 and higher education levels in support of improving math and science education. In 2006 the ExxonMobil foundation provided $139 million in worldwide contributions of which $54 million was dedicated to education. By helping non-profits like the Harris Foundation, ExxonMobil is demonstrating the power of its corporate citizenship program and philosophy to address social needs, particularly in education.

A podcast through the Grassroots Learning Project at Oregon State University (OSU) (one of the 19 participating universities) offers an audio dialog Chester Bateman, Assistant to the Dean for Technology, College of Education from OSU and Dr. Bernard Harris as they discuss The Harris Foundation and the ExxonMobil Bernard Harris Summer Science Camp program.

World Inc. is not just about how companies are innovating superior products based on Socially Responsible Product Development, it’s also about how leading socially responsible firms develop new leaders while addressing social concerns plaguing our near future. Dr. Bruce Piasecki, author of World Inc. notes, “It is my view that with the right kinds of social leaders, large multinational corporations can play the key role in solving the long list of challenges facing society in the 21st century.”

In a world where every little bit of initiative and leadership counts, we commend ExxonMobil and The Harris Foundation as well as the 19 participating universities for their “World Inc.” type of leadership, for their willingness to collaborate and discover new and unique models to achieve goals, and specifically for working to address social needs while working to enhance science, technology, engineering and mathematics education in the U.S.

Mark C. Coleman
Senior Associate & World Inc. Case Leader, AHC Group, Inc.
Mark@ahcgroup.com

Big Companies, Big Time Energy Agreements, and a Little Bit of Social Response Sweetener

Shell, Luminant, PG&E and Pepsi seek to transform the energy and power markets through social response energy solutions…

With the sun high in the sky, a cool wind at their back and a tasty cold beverage near their side, four companies are aiming to lead corporate renewable energy development and pricing strategy in the U.S. Each case is an example of social response leadership, or how firms are delivering on social need in parallel with shareholder value.

This week Shell and Luminant announced that they are teaming up to develop the world’s largest wind farm, a 3,000 megawatt generation site in the panhandle of Texas. At 3,000 MWs the Shell and Luminant development would be four times the current largest wind farm in the world, the 735-megawatt Horse Hollow Wind Energy Center, which was completed by FPL Energy, Inc. in late 2006, and also in Texas. Luminant is a subsidiary of TXU, the prominent Texas utility that recently was acquired by private equity firm Kohlberg Kravis Roberts & Co. (KKR).

Last week Pacific Gas & Electric (PG&E) announced that they had signed an agreement to purchase 553 MWs of power from Solel Solar Systems the Israeli parent company that has built its “patented and commercially-proven solar thermal parabolic trough technology” in the Mojave Dessert. An incredible amount of electricity, the PG&E purchase of 553 MWs of solar power is enough to power 400,000 homes in northern and central California.

Fong Wan, vice president of Energy Procurement, PG&E noted, “The solar thermal project announced today is another major milestone in realizing our goal to supply 20 percent of our customers’ energy needs with clean renewable energy…Through the agreement with Solel, we can harness the sun's climate-friendly power to provide our customers with reliable and cost-effective energy on an unprecedented scale.”

PG&E is among the cleanest energy providers in the U.S. In fact they currently supply 12 percent of their energy from qualified renewable energy sources, as defined under the California Renewable Portfolio Standard (RPS). PG&E says that more than 50 percent of the energy they deliver to their customers comes from sources that emit no CO2.

And in even sweeter deal making news, PepsiCo has retained the leader board as the #1 purchaser of green power in the U.S. with 1,105,045,154 kWh per year. PepsiCo tops the USEPA list of Green Power Purchasers which includes retail, finance, government and industrial giants like Wells Fargo, Whole Foods, US Air Force, Johnson & Johnson, Starbucks, IBM, HSBC, DuPont, Kohls Stores, Staples and The World Bank Group to name a few. What’s even more impressive is that in addition to PepsiCo, two of the firms’ largest manufacturing and bottling companies have recently joined the USEPA Top Green Purchasers list. Both the Pepsi Bottling Group, Inc. and PepsiAmericas, Inc. have decided to purchase 100% of their electricity from renewable generation sources. Pepsi Bottling is rated #4 and PepsiAmericas is rated #13 on the USEPA Green Power list.

The Pepsi Bottling Group (PBG) is the world's largest manufacturer, seller and distributor of Pepsi-Cola beverages — some of the world's most recognized consumer brands. PBG became a publicly-traded company in March 1999 through one of the largest initial public offerings in the history of the New York Stock Exchange. PBG generates nearly $13 billion in annual sales. It operates in the United States, Canada, Greece, Mexico, Russia, Spain and Turkey, accounting for more than one-half of the Pepsi-Cola beverages sold in North America, and about 40 percent of the Pepsi-Cola system volume worldwide.

With $3.7 billion in revenue, PepsiAmericas is the second largest Pepsi-Coal anchor bottler with operations in 15 countries around the world. In total, the company serves a population of more than 122 million people.

Working with Sterling Planet the PepsiCo team of companies are offsetting 100% of their electric use (a whopping 1.72 billion kilowatt-hours) through the purchase of renewable energy credits. Founded in 2000, Sterling Planet has become the nation’s leading retail provider of renewable energy through direct sales and electric utility partnerships. Sterling Planet is also entering into new U.S. energy market spaces with Energy Efficiency Certificate also know as White Tags.

Social response product development is this Century’s New Renaissance, a rebirth of scientific discovery coupled with a sustainable industrial revolution and a new-age focus on how to address social need through knowledge of the past, vision for the future and adaptation of technology for greater ecologic, economic and equitable potential. Big firms like PepsiCo, Shell, Luminant and PG&E are beginning to advance this new renaissance through the power of alliance formation, partnership, purchasing agreements and by discovering that there is value in social response energy solutions, for their reputation, their customers and their shareholders. What we call “World Inc.” companies, these firms are using the power of their size and strength of their leadership to redefine energy production, distribution and use in this new century.

What other examples of social response product development and capitalism do you see transforming new markets like energy? Do market leaders like PG&E, Sterling Planet and PepsiCo have a shot at truly creating more sustainable supply chains, energy production and delivery or products? Let us know your thoughts on how you see corporations going green impacting the future of money and markets.

Mark C. Coleman
Senior Associate & World Inc. Case Leader, AHC Group, Inc.
Mark@ahcgroup.com