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A critical evaluation of Apple’s environmental corporate policy approach and the way it is communicated

A critical evaluation of Apple’s environmental corporate policy approach and the way it is communicated






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  • VICK
  • VICK“Apple’s brand is so powerful that for some people it’s like a true religion” (Manjoo 2010)Apple Inc. is an influential multinational electronics manufacturer and is currently ranked the worlds most valuable company. On a national and international level this organisation is large, powerful and highly visible. Some say Apple’s brand is so powerful that for some people it’s like a true religion. In February,  the company's market capitalization moved above the $500 billion mark. Apple is one of the few corporations to eclipse the $500 billion mark, although it is currently the only publicly traded company to exist above this value today, at $506.2 billion as of March 2, 2012. Five other companies have seen their value peak at over $500 billion, including Microsoft ($615 billion in December 1999), General Electric ($594 billion in August 2000), Cisco Systems ($557 billion in March 2000), ExxonMobil ($527 billion in October 2007) and Intel ($502 billion in August 2000). Today, Apple is the world’s most valuable tech company, but columnist Robert Cyran of The New York Times predicted last year that the mobile giant may soon hit another financial milestone: the title of the world’s first trillion-dollar company. Apple released fiscal 2012 first quarter earnings which revealed that the company has turned over quarterly revenue of $46.33 billion.
  • VICK
  • KIMPoliticalInternational environmental treaties such as the Montreal Protocol which regulates ozone emissions or the Basel Convention which regulates transboundary movement of hazardous wastes all eventually filter down to influence corporate governance practices (Perry and Sheng, 1999). Moreover, domestic environmental legislation and environmental regulatory policy influence the extent to which firms regulate pollution emissions, manage waste disposal and even design product packaging (Reinhardt, 1999; Esty and Winston, 2006)EconomicCountries that are economically disadvantaged do not have the resources or the political resolve to embrace stringent environmental regulation (Thampapillai, 2002; Baughn et al., 2007). Alternatively, social pressure in economically advanced countries gives rise to high levels of environmental regulation. The relevance of these insights for corporate environmental strategists is that economic factors in a country act as a barometer for judging the emergence of stricter environmental policies. Firms that are operating in countries which have a rapidly advancing level of affluence (such as China) can expect stricter environmental regulation and enforcement over time.
  • VICK
  • Alicehttp://www.greenpeace.org/international/en/news/features/greening-of-apple-310507/To reduce electronic waste, with the aim to remove the worst toxic substances from electronic products, improve recycling policies, and to catalyze a fundamental change in the way electronic gadgets are designed, produced, and recycledhttp://www.greenpeace.org/international/en/campaigns/climate-change/cool-it/To call on Information Technology (IT) companies to power technological solutions needed to fight climate changehttp://www.triplepundit.com/2012/11/friends-of-the-earth-make-it-better-campaign-cell-phones/http://www.techdigest.tv/2012/11/sugarsync_ceo_l.html
  • MarioWhat Drives Corporate SocialPerformance?International Evidence fromSocial, Environmental andGovernance Scoreshttp://ec.europa.eu/environment/pdf/EB_summary_EB752.pdf
  • KIM
  • VICKhttp://books.google.co.uk/books?id=QY8-7o05e9cC&pg=PT22&lpg=PT22&dq=Apple+media+exposure&source=bl&ots=3xSxrZ4V8x&sig=Rmtw6pxhYK5NwMGTcqo_U1LQ5KQ&hl=en&sa=X&ei=WEm9UKWeFonR0QXf4IGgCQ&ved=0CDoQ6AEwAjgK#v=onepage&q=media%20exposure&f=falseFirms in high-profile industries must take extra care to ensure environmental management programs are developed in a comprehensive manner in order to avoid environmental mishaps that could lead to adverse Media exposurehttp://appleinsider.com/articles/10/09/27/media_coverage_of_apple_found_to_be_overwhelmingly_positive.html
  • KIM
  • KIMDell’s VP Communities and Conversations Bob Pearson gave three main criticisms:Be part of the conversation- Apple employees are not allowed to blog- Pearson “doesn’t recall” Apple joining the conversation about the environment, either via key conferences, the blogosphere, or reporter meetingsLack of goalsApple hasn’t stated any goals – just made claims that Dell says are not accurate – and the Macbook was not designed and built with the environment andeasy accessibility in mind any more so than Dell’s Latitude E-series, Pearson wrote.Actions speak louder than wordsCiting the recent packaging initiative that will purportedly eliminate 20 million pounds of shipping materials, Pearson said that “actions speak louder than words” and urged its rival to do more and advertise less.The U.S. Green Building Council (2011) has awarded the data centre with the LEED Platinum certification (no other data centre of comparable size that has achieved this level of LEED certification)It will be producing an unprecedented 60 percent of its power onsiteThe two solar array installations in and around Maiden will be registered with the North Carolina Renewable Energy Tracking System (NC-RETS) established by the North Carolina Utilities Commission
  • KIM
  • VICK
  • KIM
  • VICKIn 2004 electronics manufacturers, government bodies and legislators began to make changes in the ways in which electronic products were produced. Environmental and health concerns were addressed as the serious implications of using Chlorine and Bromine in electronic goods came to light. The Restriction of Hazardous Substances Directive was implemented by the European Union on 13 August 2004, prohibiting the use of certain heavy metals and brominated flame retardants. http://evertiq.com/news/15231http://www.commondreams.org/news2005/0817-05.htm
  • VICKhttp://www.commondreams.org/news2005/0817-05.htmhttp://www.nytimes.com/2009/06/23/technology/23apple.html?_r=0
  • ALICEDid 2007 see the start of a greener, more environmentally friendly Apple?Apple communicated their environmental credentials via an open letter posted on their website from Steve Jobs stated “A Greener Apple”. Apples environmental policy stated a timetable for the removal of toxic chemicals from their new products, a forecast of their recycling progress and criticisms and comparisons of their competitors. Greenpeace rated Apple as lower than many of their competitors in their Guide To Greener Electronics in March 2007 as you can see number 3 on the scale. This then led to Apples communication of their environmental progress as they were unhappy with the rating. A key question we thought applies here is that would Apple have addressed environmental issues if this backlash from environmental groups had not occurred?
  • ALICE2007 was the first time Apple publically communicated their environmental procedures to all stakeholders, Apple also publically apologised via the open letter method. This was the start of Apple’s communication and promises to their consumers of more interaction and announcements about their environmental actions annually. This communication of the environmental policy is partially reactive as they have responded to Greenpeace’s actions however Apple recognised that they needed to be proactive in the future. As Babiak and Trendafi stated green initiative may result in a bigger customer base therefore Apple should continue to communicate their environmental actions as it may lead to this. Other academics stated that Apple changed their environmental policy and incorporated changes due to consumer demand therefore again Apple may have not completed the communication of their environmental policy if there was no request from consumers.  "We were always green but we just weren't sharing it"http://www.huffingtonpost.com/stefan-deeran/green-pc-wars-hp-vs-apple_b_109454.html
  • KIM
  • KIm“For 2011, we estimate that Apple was responsible for 23.1 million metric tons of greenhouse gas emissions.” (Apple, 2012)Apple’s environmental policy is finely aligned with their brand image; this is evident when looking at the Company’s webpage which details the story behind Apple’s environmental footprint. ‘The story’ they present is clear and concise - Apple perform a comprehensive life cycle analysis to determine where their greenhouse gas emissions come from, which is calculated by adding up the emissions generated from the manufacturing, transportation, use, and recycling of their products, as well as the emissions generated by facilities.
  • VICK
  • ALICEThat means that 80 percent more iPhone 4 boxes fit on each shipping pallet, more pallets fit on each boat and plane, and fewer boats and planes are used — resulting in fewer CO2emissions.
  • KIMApple is the only company to date who has all its products approved by ENERGY STAR.ENERGY STAR  is an international standard tohelp consumers save money while protecting the environment through energy efficient products and practices.
  • Mario
  • Vichttp://www.forbes.com/sites/glennllopis/2012/09/10/5-powerful-things-happen-when-a-leader-is-transparent/- Apple needs to be a bit more “human” and increase its transparency. In doing so, Apple will resonate better with its consumers and we predict will have a strengthened brand image and increased credibility.
  • Alice

A critical evaluation of Apple’s environmental corporate policy approach and the way it is communicated A critical evaluation of Apple’s environmental corporate policy approach and the way it is communicated Presentation Transcript

  • How green is Apple? “A critical evaluation of Apple’s environmental corporate policy approach and the way it is communicated”
  • 1. Company Profile2. Effects of Corporate Environmental Policy3. Corporate Environmental Strategy Framework4. Group Task5. Target Audience6. Key Events in Apple’s Path Towards Sustainability7. Current Corporate Environmental Policy Approach8. Corporate Communication9. Criticism10. Moving Forward11. Conclusion
  • Apple Inc. is a world renowned multinational electronicsmanufacturer; on a national and international level this organisation is large, powerful and highly visible. Apple, was named by Forbes Magazine as the most admired company in 2008 #1 world’s most powerful brand (Bortree 2009) #1 most valuable brand #1 in market value #2 in profit #26 most innovative company #26 in sales
  • Reasons to adopt a corporate environmental policy:• Effective environmental management can reduce operating expenses (Yakhou and Dorweiler 2004), allow firms to make better use of resources (King and Lenox 2001), and stimulate innovation in production technology (McDonough and Braungart 2002).• Firms can successfully leverage superior environmental management for competitive advantage (Cerin 2002) and develop new market niches through green marketing (Kiernan 2001).• Improved environmental governance practices are viewed as a way to stave off both public protest and regulatory intervention (Reinhardt 1999)
  • What elements influence how a firm approaches the development ofenvironmental management initiatives and what can strategists do to influencethese elements?1. Macro Layer2. Secondary Stakeholder Layer3. Industry Layer4. Firm Layer5. Functional Layer
  • Macro forces are the broadest forces that influence how firms approachenvironmental governance (Grant 2005)• Economic factors• Social factors• Technological factors• Political factors
  • Political forces can have a significant direct influence on corporate environmental governancestrategy (Kolk 1999)International environmental treaties:• The Montreal Protocol (1989) which regulates ozone emissions• ISO 14000 is a family of standards related to environmental management that exists to help organizations minimize how their operations negatively affect the environment, comply with the law and improve their performance• The Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal (1992)Domestic environmental legislation and environmental regulatory policy:• EPA Land and Cleanup regulations
  • A significant amount of research has emerged over the past decade in support of StakeholderTheory which postulates that firms must balance strategic objectives to ensure that a broadspectrum of stakeholders’ expectations is adequately satisfied (Rowley 1997). Responses fromdissatisfied secondary stakeholders pose significant threats to firms (Khanna 2005)• Creditors• Government regulations• Union pressure• Interest group pressure• General public
  • Interest group pressure• Increasingly, environmental organizations and local environmental groups are exposing poor environmental practice at both firm and industry levels (Carter 2001).• The repercussions for firms that neglect this threat can be financially damaging• Apple has been targeted by environmental groups such as Greenpeace & Friends of the Earth – “Cool IT” – “Greener electronics” – “Clean our Cloud” – “Make it better”
  • General public• Public expectations regarding corporate environmental governance have increased significantly (Deegan 2002). To defend societal interests, concerned individuals and community groups are increasingly involved in monitoring corporate behavior (Cormier and Magnan 2003)• 95% of EU citizens feel that protecting the environment is important to them personally (-1 point compared to 2007). 58% consider it to be very important (Eurobarometer 2011)• 92% of MNCs from Europe changed their products to address growing concerns of environmental pollution (Vandermerwe and Oliff 1990)• (93%) of the 766 participant CEOs from all over the world, declared sustainability as an “important” or “very important” factor for their organizations’ future success.
  • In 1980, Michael Porter, an authority on corporate strategy introduced his Five Forces frameworkwhich demonstrated how forces impacting a firm’s industry influence the attractiveness of theindustry and define the parameters within which firms in the industry must operate if they are tosucceed in the long run (Porter 1980)• Type of industry• Competitive practices• Media exposure• Customer (buyer) pressure• Supplier (vendor incentives)
  • Media exposure• Research indicates that industries which are exposed to a greater level of media scrutiny are apt to expend greater efforts to publicly disclose environmental governance practices (Adams 2004)• Firms in high-profile industries must take extra care to ensure environmental management programs are developed in a comprehensive manner in order to avoid environmental mishaps that could lead to adverse (Valentine 2009)• Apple receives the most press in the mainstream media, representing 15.1 percent of all technology stories in the news (Marsal 2010)• Media coverage of Apple found to be overwhelmingly positive• Of the stories analyzed, 42% described Apple as "innovative and superior“ (Marsal 2010)
  • Customer (buyer) pressure• In industries where customer pressure to adopt improved environmental practices is high, firms are more likely to adopt more comprehensive environmental strategies to avoid adversely affecting the customer base (Wilmshurst and Frost 2000)• Consumer awareness of environmental inequities drives sustainable business practices (Young 2010)• Euromonitor International’s Annual Survey confirmed that over half of respondents globally considered the factors “fair-trade”, “green/environmentally-friendly” and “sustainably produced” to be important when considering a purchase.
  • Firm-specific forces can be defined as influences on corporate environmental governance thatarise as a result of the unique structure of a given firm (Deegan 2002)• Ownership characteristics• Firm size• Financial health• Age assets• Environmental reputation
  • Environmental Reputation• Cerin (2002) and Patten (1992) have shown that in response to publicised environmental problems, negligent firms have a propensity to adopt stricter reporting standards. Furthermore, Deegan et al. (2000) have shown that publicised environmental mishaps from one firm tend to influence the reporting styles of other firms within the industry.• Yahoo and Google data centres drove the industry in terms of renewable energy powered facilities• On the back of those, Apple announced that its north Carolina data centre will be powered entirely by renewable energy by the end of 2012
  • Activities that firms undertake in the environmental governance sphere which directly impact afirm’s market valuation, revenue prospects or cost performance in either the short or long termare all found in the functional layer (Deegan 2002)• Financial strategies• Brand protection strategies• Cost-control strategies• Quality strategy• Green position strategies
  • Apple’s Environmental Timeline Apple Products Introduced?
  • Governments Regulators EmployeesCustomers General public Pressure groupsInvestors Suppliers MediaDistributors Competitors Local communities NGOs
  • • Apple commits to phase out the use of bromine (Br) and chlorine (Cl) in its products with the intent to minimize impact on the environment and human health during manufacturing, use, and disposal in accordance with the RoHs Directive• Apple moves beyond RoHS compliance by restricting additional bromine and chlorine based compounds in consumer electronic products• Samsung, Nokia, Sony & LG commit to eliminate the use of hazardous chemicals• Sony Ericsson takes on the complicated task of establishing full chemical inventories for all their product lines
  • “Apple is in many cases ahead of, or will soon be ahead of, most of itscompetitors in these areas. Whatever other improvements we need to make,it is certainly clear that we have failed to communicate the things that we aredoing well” (Jobs 2007)“Secrecy at Apple is not just the prevailing communications strategy; it isbaked into the corporate culture” (The New York Times 2012)
  • • Partially in response to Greenpeace’s “Guide to Greener Electronics”, Apple devised and publicly announced its environmental policy “A Greener Apple”• The environmental policy was clearly stated and provided consumers with a progress chart• Apple stated that they were doing more in terms of being environmentally responsible• "We were always green but we just werent sharing it“ (Deeran 2008)
  • • “Apple have found themselves in the position of being forced to adopt change because their customer base demanded it” (Herron 2010, p.69)• “Today is the first time we have openly discussed our plans to become a greener Apple. It will not be the last” (Apple 2007)• “We apologize for leaving you in the dark for this long” (Apple 2007)• “Apple is already a leader in innovation and engineering and we are applying the same talents to become an environmental leader” (Apple 2007)
  • Apple joined US Chamber of Commerce exodus over climate change scepticism (Guardian 2009)The chamber is against the idea that the EPA should use its authority under the Clean Air Act toregulate greenhouse gas emissions.“We strongly object to the chambers recent comments opposing the EPAs effort to limitgreenhouse gases” (Novelli 2009)It can be argued that the move was partiallydriven by the public interest in the CopenhagenClimate Change Conference
  • Environment Evaluation on environment friendliness of Apple’s services is not easy, sinceThe Company does not actually manufacture the products. The true manufacturers aremostly located in developing countries, where environmental regulations are lax andfrequently get Violated (Bertolucci 2009)Apple documents detailed reports of its environmental progress and energy efficiencydesigns on official website. A comprehensive analysis of green-gas-emissions is alsoavailable, covering the complete products’ lifecycles from manufacturing to retail facilitiesScant information can be found on e-waste recycling operation after collecting thesewastes from consumersLittle is known on energy consumption of data computing supporting the iTunes platform
  • Young (2010))
  • • Manufacturing accounts for 61% of Apple’s total greenhouse gas emission• Apple products are designed to be more powerful and require less material to produce, generating fewer emissions – The iPad became 33% thinner and 15% lighter in one generation – 5% less carbon emissions were generated as a result• Apple products are free of Lead, PVC, BFR, Aresenic and Mercury• Apple uses recycled plastics, recycled paper, biopolymers, and vegetable-based inks – iTunes gift cards are made from 100% recycled paper• Supplier Code of Conduct and Supplier Audit Codes are published online
  • • 5% of Apple’s greenhouse gas emissions are a result of transporting our products from assembly locations to distribution hubs in regions where our products are sold• Packaging is designed to be “efficient” – slim, light and protective – packaging for iPhone 4 is 42 percent smaller than for the original iPhone shipped in 2007
  • • The use of Apple products generates 30% of Apple’s total greenhouse gas emissions• Products are designed to be as energy efficient as possible - The Mac Mini takes one fifth of the power consumer by a single 13-watt CFL lightbulb, making it the most energy efficient desktop computer in the world• Apple is the only company to date who has all of its products certified by ENERGY STAR
  • • 2% of Apple’s total greenhouse gas emissions are related to recycling• Materials used by Apple including arsenic, aluminium, and polycarbonate are reclaimed by recyclers for use in new products• Mac Book Pro built in battery has increased lifespan of 3x the average laptop• Apple houses its own recycling programme – In 2010 and 2011, Apple achieve a worldwide recycling rate of over 70% – The last reported numbers from Dell and HP were each lower than 20%
  • • Apple’s corporate offices, distribution hubs, data centers, and retail storesaccount for 2% of the Company’s total greenhouse gas emissions• Apple provide a Commute Alternatives programme for all employees - More than 1,100 Apple employees go to work each day on free biodiesel commuter coaches• Apple reduces energy use in their facilities by utilizing renewable energy —eliminating 30,000 metric tons of CO2e emissions in Austin, Texas;Sacramento, California; Munich, Germany; and Cork, Ireland• Apple Data Centre in North Carolina
  • • Global Reporting Initiative (GRI) – Acts as an indirect method of communication• Facilities Report• Investor Report• Supplier Responsibility Progress Report• Environmental Progress Chart• Relationships with selected media• Green adverts since 2008
  • • The Company is criticized for not giving timelines for further phasing-out other hazardous substances such as DEHP and phthalates, which leads to an unfavorable overall Greener Electronics Ranking position• The planned obsolescence, or the designed disposability, may be the key problem of Apple’s green strategy• Apple adopts the cradle-to-grave way of consumption, with no innovative considerations on creating a reusable product line or creating a green manufacturing chain• Lack of stakeholder engagement strategy (Harvard Business Review 2012)• Lack of triple bottom line thinking – People, Planet, Profit (Eurocert 2012)• Low level of overall transparency (CNN 2012)
  • “We are all living during a time when people want and expect their leaders to be more human, less perfect and at times a bit vulnerable – regardless of hierarchy or rank” (Forbes 2012)• More transparency – Increased credibility, trust and strengthened brand image• Apple to pioneer a unified standard for environmental reporting• Interaction with consumers e.g. Dell’s IdeaStorm
  • • Apple overview• The importance of a corporate environmental policy• Application of a corporate environmental strategy framework• Apple’s relationship with the media• Key events – 2004: Bromine and Chlorine – 2007: A Greener Apple – 2009: Withdrawal from the U.S. Chambers of Commerce• Current corporate environmental approach• Corporate communication• Criticism• Recommendations
  • Adams C.A., 2004. The ethical, social and environmental reporting-performance portrayal gap. Accounting, Auditing &Accountability Journal 17: 731–757.Allan, S., 2000. Environmental risks and the environment. London: Routledge. Available from:http://ehis.ebscohost.com/eds/resultsadvanced?sid=a3c8a7ca-4585-4669-9d70-80f66a02fc9e%40sessionmgr13&vid=3&hid=3&bquery=%28media+risk%29+AND+%28allan%29&bdata=JnR5cGU9MSZzaXRlPWVkcy1saXZlJnNjb3BlPXNpdGU%3d [Accessed 27 November 2012].Apple., 2007. A Greener Apple. London: Apple. Available from: http://www.apple.com/hotnews/agreenerapple[Accessed 26 November 2012].Apple., 2012. The story behind Apple’s environmental footprint. London: Apple. Available from:http://www.apple.com/uk/environment/ [Accessed 4 December 2012].Avram D.O., Kuhne S. 2008. Implementing responsible business behavior from a strategic management perspective:Developing a framework for Austrian SMEs. Journal of Business Ethics 82: 463–475.Babiak, K and Trendafi, S., 2010. CSR and environmentally responsibility: motives and pressures to adopt greenmanagement practices. Corporate Social Responsibility and Environmental Management., 18 (1), 11-24.Baughn C.C., Bodie NL, McIntosh JC. 2007. Corporate social and environmental responsibility in Asian countries andother geographical regions. Corporate Social Responsibility and Environmental Management 14: 189–205.Berry MA, Rondinelli DA. 1998, Proactive corporate environmental management: A new industrial revolution. TheAcademy of Management Executive 12: 38–50.Bertolucci, J., 2009. The world’s greenest computers? Macworld, 26, 56-59.