Monty Python fans will recall with relish the famous scene from The Holy Grail where the guardian of the bridge over the chasm of doom asks his questions three: What's your name? What's your quest? What's your favorite color? Michael Palin was indecisive about the third question, leading to his swift demise, but General Electric (NYSE: GE ) CEO Jeffrey Immelt answered the question yesterday with authority: It's green.
Immelt spoke Monday at George Washington University in Washington, D.C., where he unveiled a company wide initiative dubbed "Ecomagination." The goal, Immelt said, is to "aggressively bring to market new technologies that will help customers meet pressing environmental challenges."
What's this, you ask? Has the world's largest company (in terms of market capitalization) gone crazy? Is the house that Jack Welch built being run by a bunch of fanatical tree huggers?
It turns out that GE is completely serious about green technology. The company is making a bet that what the world needs today is safer, cleaner, and more abundant sources of energy and water, delivered in a cost-effective manner. We've seen environmental initiatives from large companies in the past. From the feel-good commercials of BP (NYSE: BP ) to Starbucks' (Nasdaq: SBUX ) commitment to ecologically sound growing practices, the idea that corporate entities need to act responsibly is a growing theme in corporate governance today. Heck, even Wal-Mart (NYSE: WMT ) is building energy-efficient supercenters.
But none of these initiatives comes close to the position that GE is staking out on environmental matters, namely that improving the environment is not only good for society but also good for business. Yes, GE intends to make the world a better place and reward its shareholders along the way. It views environmental initiatives as a key component of its future growth strategy and has set an aggressive goal of generating an incremental $20 billion in revenues from environmental initiatives by the year 2010.
Under the auspices of Ecomagination, GE has specifically committed to:
- Double its R&D investment in clean technologies, to the tune of $1.5 billion annually by 2010.
- Double its revenues from products and services that provide significant and measurable environmental-performance advantages to customers.
- Reduce its greenhouse gas emissions substantially by 2012.
- Keep the public regularly informed of its progress in meeting these goals.
The announcement that GE's "going green" may sound like a bolt from the blue, but the company has been discussing this initiative for about a year with customers, thought leaders, and employees around the globe. These discussions "crystallized the growing market demand for solutions to the challenges GE customers face," the company announced. GE has a long heritage of innovative product development and anticipating the world's changing needs, going back to founder Thomas Edison, who said, "I find out what the world needs, then I proceed to invent."
Amid this heroic vision of the future, investors may be asking whether GE's commitment to green and clean will ultimately be a bottom-line success. Will "green" lead to more green in the pockets of shareholders? Or are we seeing the birth of a new Don Quixote? It's too soon to tell. Clearly the company needs to tread this path for a while before we can begin to answer that question. But I wouldn't bet against it at this point. In a world that seems to get smaller every day -- marked by skyrocketing energy prices, urban sprawl, and continued population pressure -- it just feels right for the world's largest corporate entity to make a stand for something that goes beyond the bottom line. Socially conscious investors take note!
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Fool contributor Timothy M. Otte has high regard for both Monty Python and humpback whales. He owns shares of Wal-Mart, and welcomes comments on his articles. The Fool has a disclosure policy.