The broadsheets and social media are currently rife with commentary about the dramatic fall from grace of one of the world’s largest and most trustworthy automotive brands; Volkswagen. The fallout is massive. This means billions in losses for the company. The CEO has resigned and it remains to be seen what the legal and long-term consequences are for the decision-makers involved in this debacle and even for the brand, no matter how resilient it might be. As a result of the scandal, even “brand Germany” reputed its for trustworthy, squeaky clean engineering excellence, is coming under scrutiny. Aileen Ionescu-Somers on the VW scandal.
The economic and political clout of the global corporation is growing constantly, going well beyond regional or national boundaries. With globalization, a company’s purpose defined solely around profit is inadequately articulated since it does not reflect the world’s vastly changing dynamic. Like it or not, companies are fundamentally social institutions, playing their own explicit and defined role within society. For a long time, their purpose was defined – not so much as promoting the common good, but as meeting market needs while making a profit as an indicator that they added more value to society than the resources they used up. However as of late, some prominent business leaders – but by far not enough – have realized that companies simply cannot do business as usual on a failing planet with dwindling resources and rising social inequity.
Volkswagen, as an industry leader had – at least on paper – recognized that. The very name of the brand exudes a societal purpose: Volkswagen after all, is the “People’s car”. But the company went further, defining its corporate purpose in a more meaningful way, seemingly taking a holistic view of its role in and contribution to society: “make Volkswagen the most successful, fascinating and sustainable automaker in the world by 2018”. Its Strategy 2018 puts environment, its clients and its people at the center of the company’s strategic vision.
There can be no doubt that Volkswagen clients and the public at large now perceive its lofty purpose to lack authenticity. Greenwashing would be putting it mildly. Right now, Volkswagen’s reputation lies in tatters. How could it have gone so wrong?
Let’s surmise basing ourselves on IMD’s “Keeping it real: How authentic is your corporate purpose?,” empirical research carried out in 2015 in partnership with Burson Marsteller, a top public relations firm. First, the hundreds of executives we surveyed had great difficulty identifying a single company with a truly authentic corporate purpose. This means that while many companies “talk the talk” on corporate purpose, they do not necessarily “walk the walk”. This also means that strategies and linked internal and external communications efforts need revision across industries. Our survey also indicated that executives do not generally rely on their own company’s stated purpose to guide their decision-making processes. There is a serious disconnect. It is highly likely that similar scenarios were playing out at Volkswagen.
In fact, stating purpose is actually the easy part and only the first step. It is important that purpose also be embedded in the organization. It’s may not seem like rocket science but so often important aspects are ignored that allow companies to take a holistic perspective on purpose and strategically align values, organizational culture, activities and operations around it; in other words, ensuring that one hand knows what the other is doing and above all, keeping it real. Taking a holistic approach helps avoid any disconnect between what companies say they do and what changes are truly being made to how they operate. It also helps avoid the substantial risks to brand and reputation that Volkswagen is currently experiencing. In other words, companies absolutely have to– and particularly in today’s digitally connected world– mercilessly walk their talk before they talk their walk. This starts within the company, top down and bottom up.
That said, much as walking the talk is crucial for any corporation, too few are shifting away from the sole short-term profit focus dictated by capital markets. The managerial mindset this promotes has clearly fundamentally affected the way Volkswagen operated in some of its key markets. We can deduct from the mayhem around Volkswagen this week that there are a increasing number of external factors requiring companies to adoptable broader purpose-driven strategies that are also authentic. Currently it’s a perfect storm where on the one hand we are reaching planetary boundaries and simply running out of resources, feeling the impact of climate change as never before, while on the other, issues around social equity need urgently to be addressed and this includes by corporations also. Now more than ever, companies have power to effect change both internally and externally by acting out and communicating purpose more holistically and effectively. If they can keep it real, better business is the result.
New Zealand to Switch to Fully Renewable Energy by 2035
New Zealand’s prime minister-elect Jacinda Ardern is already taking steps towards reducing the country’s carbon footprint. She signed a coalition deal with NZ First in October, aiming to generate 100% of the country’s energy from renewable sources by 2035.
New Zealand is already one of the greenest countries in the world, sourcing over 80% of its energy for its 4.7 million people from renewable resources like hydroelectric, geothermal and wind. The majority of its electricity comes from hydro-power, which generated 60% of the country’s energy in 2016. Last winter, renewable generation peaked at 93%.
Now, Ardern is taking on the challenge of eliminating New Zealand’s remaining use of fossil fuels. One of the biggest obstacles will be filling in the gap left by hydropower sources during dry conditions. When lake levels drop, the country relies on gas and coal to provide energy. Eliminating fossil fuels will require finding an alternative source to avoid spikes in energy costs during droughts.
Business NZ’s executive director John Carnegie told Bloomberg he believes Ardern needs to balance her goals with affordability, stating, “It’s completely appropriate to have a focus on reducing carbon emissions, but there needs to be an open and transparent public conversation about the policies and how they are delivered.”
The coalition deal outlined a few steps towards achieving this, including investing more in solar, which currently only provides 0.1% of the country’s energy. Ardern’s plans also include switching the electricity grid to renewable energy, investing more funds into rail transport, and switching all government vehicles to green fuel within a decade.
Zero net emissions by 2050
Beyond powering the country’s electricity grid with 100% green energy, Ardern also wants to reach zero net emissions by 2050. This ambitious goal is very much in line with her focus on climate change throughout the course of her campaign. Environmental issues were one of her top priorities from the start, which increased her appeal with young voters and helped her become one of the youngest world leaders at only 37.
Reaching zero net emissions would require overcoming challenging issues like eliminating fossil fuels in vehicles. Ardern hasn’t outlined a plan for reaching this goal, but has suggested creating an independent commission to aid in the transition to a lower carbon economy.
She also set a goal of doubling the number of trees the country plants per year to 100 million, a goal she says is “absolutely achievable” using land that is marginal for farming animals.
Greenpeace New Zealand climate and energy campaigner Amanda Larsson believes that phasing out fossil fuels should be a priority for the new prime minister. She says that in order to reach zero net emissions, Ardern “must prioritize closing down coal, putting a moratorium on new fossil fuel plants, building more wind infrastructure, and opening the playing field for household and community solar.”
A worldwide shift to renewable energy
Addressing climate change is becoming more of a priority around the world and many governments are assessing how they can reduce their reliance on fossil fuels and switch to environmentally-friendly energy sources. Sustainable energy is becoming an increasingly profitable industry, giving companies more of an incentive to invest.
Ardern isn’t alone in her climate concerns, as other prominent world leaders like Justin Trudeau and Emmanuel Macron have made renewable energy a focus of their campaigns. She isn’t the first to set ambitious goals, either. Sweden and Norway share New Zealand’s goal of net zero emissions by 2045 and 2030, respectively.
Scotland already sources more than half of its electricity from renewable sources and aims to fully transition by 2020, while France announced plans in September to stop fossil fuel production by 2040. This would make it the first country to do so, and the first to end the sale of gasoline and diesel vehicles.
Many parts of the world still rely heavily on coal, but if these countries are successful in phasing out fossil fuels and transitioning to renewable resources, it could serve as a turning point. As other world leaders see that switching to sustainable energy is possible – and profitable – it could be the start of a worldwide shift towards environmentally-friendly energy.
How Going Green Can Save A Company Money
What is going green?
Going green means to live life in a way that is environmentally friendly for an entire population. It is the conservation of energy, water, and air. Going green means using products and resources that will not contaminate or pollute the air. It means being educated and well informed about the surroundings, and how to best protect them. It means recycling products that may not be biodegradable. Companies, as well as people, that adhere to going green can help to ensure a safer life for humanity.
The first step in going green
There are actually no step by step instructions for going green. The only requirement needed is making the decision to become environmentally conscious. It takes a caring attitude, and a willingness to make the change. It has been found that companies have improved their profit margins by going green. They have saved money on many of the frivolous things they they thought were a necessity. Besides saving money, companies are operating more efficiently than before going green. Companies have become aware of their ecological responsibility by pursuing the knowledge needed to make decisions that would change lifestyles and help sustain the earth’s natural resources for present and future generations.
Making needed changes within the company
After making the decision to go green, there are several things that can be changed in the workplace. A good place to start would be conserving energy used by electrical appliances. First, turning off the computer will save over the long run. Just letting it sleep still uses energy overnight. Turn off all other appliances like coffee maker, or anything that plugs in. Pull the socket from the outlet to stop unnecessary energy loss. Appliances continue to use electricity although they are switched off, and not unplugged. Get in the habit of turning off the lights whenever you leave a room. Change to fluorescent light bulbs, and lighting throughout the building. Have any leaks sealed on the premises to avoid the escape of heat or air.
Reducing the common paper waste
Modern technologies and state of the art equipment, and tools have almost eliminated the use of paper in the office. Instead of sending out newsletters, brochures, written memos and reminders, you can now do all of these and more by technology while saving on the use of paper. Send out digital documents and emails to communicate with staff and other employees. By using this virtual bookkeeping technique, you will save a bundle on paper. When it is necessary to use paper for printing purposes or other services, choose the already recycled paper. It is smartly labeled and easy to find in any office supply store. It is called the Post Consumer Waste paper, or PCW paper. This will show that your company is dedicated to the preservation of natural resources. By using PCW paper, everyone helps to save the trees which provides and emits many important nutrients into the atmosphere.
Make money by spreading the word
Companies realize that consumers like to buy, or invest in whatever the latest trend may be. They also cater to companies that are doing great things for the quality of life of all people. People want to know that the companies that they cater to are doing their part for the environment and ecology. By going green, you can tell consumers of your experiences with helping them and communities be eco-friendly. This is a sound public relations technique to bring revenue to your brand. Boost the impact that your company makes on the environment. Go green, save and make money while essentially preserving what is normally taken for granted. The benefits of having a green company are enormous for consumers as well as the companies that engage in the process.