Steven Milloy of foxnews.com wants you to believe that being a CEO in favor of green business is bad for business. In his most recent column, he gives three "examples" of how CEOs of major companies, by trying to move in a greener route, have sparked a decline in their own company's future value. He picks the specious cases of Ford, British Petroleum, and the upcoming "crisis" in General Electric. However, if you read what he has to write, he is simply not making any sense.
Ford's choice of CEO may have not been the wisest choice in the world, but the 5-year reign of Bill Ford did not have the disasterous effect that Millor wants you to believe. His reasoning is that, since Bill actively sought to turn his company down a greener road, the 2/3 loss of stock value that the company has endured is his fault. Instead, it was a company's reliance on trucks and SUVS - which consume huge amounts of gas - that dragged them down, and their unwillingness to change. Look at Ford's compatriot, General Motors. A company similarly laden down with the same burdens, has not had an environmentalist at the helm but still has managed to shed the majority of its value. In stark contrast, Toyota got on board the green vehicle bus very early, and is currently reaping in the benefits from it (note: here in California the waiting list for a Prius was, at one point, 7 months... how many cars would you willingly pay for in advance, and then wait 7 months for it to be delivered? not many). Honda is also there, and they have a good corner on the solar panel manufacturring market to bolster them up. So it was not these last 5 years that have doomed Ford, it has been decades of negligence and unwillingness to act or recognize changes down the road.
Negligence reminds me of Milloy's comments about BP's CEO Lord John Browne. Milloy states that, while Browne is trying to turn a new leaf in the company's long and sometimes turbid history, he has neglected "core business needs and has given the company a black-eye." What is evidence for this accusation? "A March 2005 explosion at BP’s Texas City, Texas, refinery complex killed 15 workers and injured many more. Poor maintenance at BP’s Alaskan oil pipeline caused the largest-ever oil spill on the North Slope in March 2006. A BP oil rig damaged by Hurricane Katrina still leaks one year later." Now the pipeline corrosion is a condition that builds up over years, if not decades, making recent decisions by the CEO hardly relevant. Even more important, the pipeline is soon to be back online,by BP's estimates. Explosions and hurricanes, while unfortunate, happen, at great cost to lives, money, and the environment. But these are pitfalls in any company, and freak acts like those do not necessarily reflect upon the CEO in question. Instad, trying to push BP into a new generation of companies working with alternative fuels, helping California's governor work with a new global-warming initiative, and work with partners like Greenpeace are constructive steps that more companies should take.
The truth of the matter is that green companies are starting to turn a profit, and make a lot of sense. Forbes magazine opines, "Evidence is mounting that what is good for the environment is also good for the price of a company's stock. Contrary to the widely accepted belief that environmental regulations are a drain on profitability, research demonstrates that being environmentally effective can add value to a company, and potentially benefit its shareholders. By taking advantage of environmental opportunities, companies can gain a competitive advantage over their peers through cost reductions, quality improvements, increased profitability and access to new and growing markets. Environmentally responsible companies also have less risk of environmental liability, which could have a major impact on future stock prices." And that was two years ago, before a lot of green businesses that exist today are even in place.
According to the Carbon Disclosure Project, "More than 70 percent of the world's largest 500 companies (FT 500) are now addressing climate change in their corporate reporting, according to the Carbon Disclosure Project. In addition, 90 percent of those companies flagged climate change as posing commercial risks and/or opportunities to their business." Toyota's hybrid cars have certainly been a boost for that company, as mentioned above. Portfolio 21's top 10 green companies for 2005 returned anywhere from 52% to 120%, hardly shabby growth by any metric.
Milloy's comments are not merely obtuse, but blatantly misleading. He chooses such abominable examples to base his case around that it could be hardly considered journalism. As I have shown, most of his accusations are not the result of one man's actions, as those take longer to matriculate in a large corporate atmosphere. Instead, CEOs who think green and act green should be encouraged to continue what they are doing, for it will benefit their shareholders, their customers, and society in general. Milloy should stop pandering and slandering and write about something about which he actually understands.