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General Electric: Switched on, but could shine more brightly

By William D Alessandro on October 25, 2010 at 10:15am.

GE is the oldest company on the Dow Jones Industrial Index.  Its unfashionable — even archaic — mix of jet engines and power generation, financial services, medical equipment, and television programming should leave the telltale footprints of a capitalist dinosaur.  Instead, it is the most widely held stock in the world with over 5 million shareholders.

The company could endow a law library filled only with the materials from environmental and corruption cases filed against it.  Yet among the 500 largest companies in the US, GE has the eleventh best green reputation in the opinion of academics, environmental officers, and CEOs surveyed by Corporateregister.com.

The dichotomy of GE is encapsulated by an old segment televised on the late-night ‘David Letterman Show’.  On the list of ‘Top 10’ ways to make a GE executive very angry is this delicious nugget: Ask if GE’s guided missiles come in ‘avocado’ or ‘harvest gold’.  The jibe still packs a punch.  The company’s audacious ecomagination branding campaign (escalated in 2009 with the launch of healthymagination) belies GE’s huge defence business.

The sixth annual extra-financial report on the triple-bottom line, which GE refers to as ‘citizenship,’ will be quite familiar to public watchdogs and socially responsible investors.  It follows last year’s format closely.  As in previous years, the report is heavy on text and light on pictures. 

GE crams enough about its activities onto 45 printed pages for everyone from novices to experts to reach an informed opinion.  URLs are provided to connect readers to areas on the corporate website where they can indulge their appetite for more facts and exclusive stories about GE’s sustainability.  For an amuse-bouche, sample the interactive data tables like the one on corporate governance http://www.ge.com/citizenship/metrics/governance-data.html

In scope and in detail, the 2009 citizenship report is impressive.  While no one aspect is extraordinary or unique compared to other reports, all the essential ingredients are present or available online.  An improvement in the format from 2008 is a six-page list squaring up performance to the 2009 commitments. A third column declares updated goals for 2010. 

Four more pages present basic measurements of GE’s triple-bottom-line performance.  The metrics are introduced by two pages that can easily be overlooked.  Titled ‘operational excellence’, the discourse reveals the marching orders that dictate how GE is supposed to be managed.

In response to a suggestion, the company has compiled fact sheets with information about its operations in 17 separate countries.  The national profiles are referred to but not included in the printed report.

To call GE’s reporting style prosaic is not a criticism; GE does a yeoman’s job condensing a huge amount of information with only minor flaws (why does page 27 come before page 23?  Why are penalties and fines shown on page 25 when the GRI index refers to them as being on page 23?).

One can take GE’s message at face value.  Using hard numbers and straight text, GE documents as well as any company the great strides it has taken on legal compliance, occupational and environmental safety, and energy and resource consumption (the governance data is a mixed bag). 

The longer one reads the report, however, the more one realises something is missing.  The portrait it paints is sanitised.

The 30-year struggle with GE to remove toxins dumped into the Hudson River has been called ‘one of the signature battles of the modern environmental movement.’  But the words ‘polychlorinated biphenyls’ do not appear in the report.

In the briefest terms possible, the report states that phase one of dredging the river was completed in 2009 and that the experience will be used in consultation with the US Environmental Protection Agency ‘to improve Phase II.”  Nothing is mentioned even in passing about the continuing fight over future cleanup operations.

Two lines buried at the bottom of a page commit GE to design a due diligence process to reduce the risk that conflict minerals from the Congo and adjoining territories enter GE’s supply chain.  But there is no mention much less any discussion of company problems with conflict minerals in the Congo or anywhere else in the world either in the 2008 or 2009 reports.

Two of GE’s performance commitments are actually pledges to lobby for measures that enhance its businesses.  This is a fine example of how the citizenship report always generates a positive spin:

‘From testifying on Capitol Hill in Washington D.C. to bringing our customers and government leaders together at our Global Research Centres for various symposiums and forums, in 2009 GE engaged key stakeholders at every level on how to accelerate new technologies to solve some of society’s biggest challenges.’  GE promises the same in 2010.

GE self-declares its disclosures to a grade-A standard against the Global Reporting Initiative guidelines.  It has an index showing where in the document the required indicators can be found.

The external assurance comes in the form of an open letter from a six-member advisory group.  The members’ credentials lean towards the social side of the ledger rather than traditional environmental, health, and safety expertise. (GE reimbursed their expenses and made honoraria of an undisclosed sum to either individuals or the organizations of their choice.)  The panellists met twice during the year.

The advisers recommend that GE gear the report on its three-pronged business strategy — energy and climate change; healthcare; and community building — in the context of the UN Millennium Development Goals.  Like the rest of the report, the advisers’ letter is carefully written, polished nearly to perfection, and indefatigably motivational. 


1. Say less but tell more.
2. Be explicit about the stakeholder engagement process. 
3. Double-check the references and page numbers.
William D’Alessandro is president of Victor House News Co., an independent agency reporting on law and the environment for trade publications and executive newsletters.  He also edits Crosslands Bulletin http://www.crosslandsbulletin.com covering strategic corporate environmental management and sustainability issues.