European giants go green

23 January 2013

AMSTERDAM: Big European companies like Unilever, Philips and Telecom Italia are enhancing their focus on sustainability, an area expected to deliver both cost savings and revenue-generating opportunities.

Unilever, the FMCG giant, has just become the first firm to feature in the annual ranking of the leading corporations in the sustainability arena which is published by RobecoSAM, the investment group, and KPMG, the advisory network.

The 102 food producers assessed logged an average score of 46% for their economic, ecological and social activities. Unilever, by contrast, posted 86%, and is now seeking to halve its environmental footprint and double revenues by 2020.

"Sustainability for us is at the core of our business model," Pier Luigi Sigismondi, chief supply chain officer of Unilever, said. "We're seeing massive cost savings."

Philips, the electronics-to-healthcare conglomerate, already derives 40% of its sales from "eco-design" products, and wants this figure to hit 50% by 2015. The organisation is also trying to improve the efficiency of its product portfolio by 50%.

"In terms of market opportunities, a huge part of our current and future revenues depends on major global trends such as urbanisation, climate change and ageing populations," said Robert Metzke, a senior director at Philips.

Its rating of 91% was the best of 26 operators in the "leisure goods" segment which together recorded a norm of 53% for their green status. This cohort housed players including Panasonic and LG.

Air France-KLM was the top-performing airline on 89%, beating an industry average of 58%. It has very deliberately maintained its emphasis on this matter despite the challenging economic climate.

"Sustainable flying is inevitable. Therefore, sustainable development remains a cornerstone of the Air France-KLM strategy," Jean-Cyril Spinetta, the chief executive of Air France-KLM Group, said.

KT Corp, a Korean firm, led the communications sector with a reading of 94%, versus the typical return of 69% for this category. Telecom Italia was among a second rung of players here which are rapidly making progress.

The company is Italy's second-largest electricity user, and has yielded €23m in cost savings a year simply by cutting its carbon emissions. Services like "telemedicine" are also attracting its attention.

"We believe the most interesting opportunity is in terms of revenue generation," said Paolo Nazzaro, head of sustainability at Telecom Italia.

Data sourced from KPMG; additional content by Warc staff