At
the Apple
earnings call last
week, CEO Tim Cook reported Apple’s latest record-breaking results and the
strongest March quarter ever, with 27% revenue growth and 40% earnings growth
year over year.
Cook then commented on the two new data
centers Apple is building which will run on 100% renewable energy, risking
another conservative investor backlash when he linked them to Apple’s climate
change politics: “This is just part of the work we’re doing to protect the
environment and leave the world better than we found it.”
This took real chutzpah. Cook took a drubbing last year from conservative finance
group NCPPR and its followers for spending on environmental projects not
related to profit. Cook snapped back at critical NCPPR representative Justin
Danhof, “If you want me to do things only for ROI reasons, you should get out
of this stock.”
Tim Cook has become the passionate poster
child for green
electronics, touting environmental progress even with shareholders
groups that may not be cheerleaders. And his operations department is
implementing good works, eliminating emissions in new and existing Apple
buildings, removing toxins from production and sourcing sustainable forests for
packaging.
Just as important, Apple’s brand
communications support its environmental efforts. Apple’s web site’sEnvironmental Responsibility touts both its green philosophy and
its concrete actions. Cook intones on an Apple web video called “better” that “Climate
change is real and a
real problem for the world” and boasts that 94% of its corporate facilities and
100% of its data centers are now powered by renewable energy such as solar
power.
Is Apple, now the world’s biggest company by
market capitalization, finally leading corporate citizenship too? And doesn’t
this just make Apple more vulnerable to environmental critics?
In fact, Apple is more vulnerable. An analysis in Huffington Post of Apple’s own 2014 report on climate
change efforts reveals that “manufacturing (mostly in China) accounted for a
whopping 73 percent of the company’s 34.2 million metric tons of greenhouse gas
emissions.” Only 1 percent of the company's emissions are connected to its
solar-powered headquarters and data centers.
Bloomberg’s
Adam Minter recently attacked Apple for the same thing, noting that other
companies like Boeingand GM already have factories powered by
renewables. Apple is a laggard even among technology companies. Working with BSR, HP has developed energy-management action
plans for 20 supplier factories in China. IBMnow
requires its nearly 20,000
suppliers to chart
their emissions and energy consumption and develop plans for reducing both.
Apple has joined the Electronic Industry Citizenship Coalition but has yet to
announce specific targets. This suggests that Apple is engaged in, if not
green-washing, then selective reporting.
Apple may be late signing on to corporate
citizenship, but it’s just in time. The maker of Macs and iPhones has for years
had success using fabulous design and cool chic to ride roughshod over
environmental critics and techie complaints about closed systems. Now, the
company is entering consumer payment systems (Apple Pay) and health care information
(HealthKit), markets where trust is absolutely paramount. These products lock
consumers into Apple for their money and their health, and what could be more
personal?
Apple is selling to a generation whose
purchases are, more than ever, guided by a company’s environmental actions. Six in ten
16- to 20-year-olds (“Generation
Z”) say they will go out of their way to buy products and services from
businesses they know are helping to create a better world, up from five in ten
among Gen Y. And a post-2008 crash McKinsey study noted the widespread perception
that financial services have violated their social contract with consumers,
leaving space for a trusted source in consumer wallets. Apple needs creeds as a
corporate citizen to succeed in this new arena. An honest and aggressive
commitment is required.
- By Carol Pierson
Holding
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