How GE turned a potential business threat into a brand building opportunity
November 22, 2011UNITED STATES
Area of innovation: Brand
In the early part of this century it was clear to GE, one of the world's largest diversified technology and industrial supply companies, that it was operating in a world where environmental issues are right in the centre of all its key stakeholders' agendas, including consumers, customers and governments. While other technology companies would have perceived this as a threat, GE saw potential .
In 2005, GE announced a unique initiative - 'Ecomagination'; a term emerging out of the company's corporate slogan 'Imagination at Work'. It was designed to drive business growth and profits through commitment to clean energy, as well as to build its brand image as that of an environmentally aware company.
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In addition to being an umbrella branding of GE's different product lines, Ecomagination has expanded to include increased research and development spending on creating environment friendly technology for its customers, reducing emissions and wastage, and regulating use of natural resources for its own operations with the emergence of an increasingly stringent regulatory framework on carbon dioxide emissions and other pollutants, and as firms face a world of decreasing fossil fuel resources, GE sought to become the lead provider of relevant products and services for this new reality.
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GE fell short of its aggressive Ecomagination revenue target of $25 billion by 2010, but still has some $18 billion coming from environmentally-friendly products
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In just a few years, Ecomagination has spawned everything from low-energy digital mammography machines and aircraft engines to gas turbines and nuclear plants. By 2010, GE had shown impressive progress on each of its Ecomagination targets, developing over 90 Ecomagination products, which contributed at least $18 billion in revenues. It invested around $1.5 billion in clean technology research, meeting its 2010 target a year early. It successfully reduced its own energy intensity by half and greenhouse gas emissions by over 20 per cent below the 2004 baseline. The company's water consumption has also reduced by 30 per cent from the 2006 baseline. GE has also gone down the inorganic route by acquiring relevant assets, including expertise in water purification, waste water treatment and water reuse, amongst other areas.
The Ecomagination initiative has helped GE generate over $70 billion in revenues since its inception, and its success has prompted it to commit a further investment of $10 billion in related research over the next five years. It hopes Ecomagination revenue will grow at twice the rate of the company's total revenue.
As part of its commitment, GE publicly reports its progress on an annual basis. Driven by focused product development and sustained brand building efforts under its Ecomagination initiative, GE's overall brand value has grown by 17 per cent to $52 billion.