So far, the story of GE's surprise drop in profits has not been explicitly tied to sustainability, but I'm sure it will be soon. After all, Jeff Immelt's name has been closely associated with the Ecomagination campaign as his major contribution to both the company and to the sustainability movement.
The idea of developing technologies to help solve environmental programs, and viewing that as a financial growth platform, was novel at the time it was announced - and it was all the more powerful an idea coming from a company as well-respected by the financial community as GE.
If the firm's financial prowess continues to slip, will its commitment to Ecomagination stay strong? Will environmental products be seen as the way out of a slow market, and as a way to offset failing real estate assests, or will it be seen as an unaffordable non-core expense? Will the program itself remain as greatly respected by the sustainability community if fails to be an example of sustainability and profitability intertwined?
Of course, the "shocking" GE news is also a demonstration of how short-sighted and narrow-minded the market can be - where a company doing big things in a smart way can be so embarrassed by a quarterly mis-prediction of profits. The stock fell by 12% as soon as the news was announced, penalizing the company in a big way for failing to deliver on short-term predictions - and probably making it a lot harder for leaders like Immelt to focus on the long term.
That's a really depressing thought, that sustainability could be seen as such a financial threat.
Posted by: Jodie | April 13, 2008 at 02:57 PM