The Way Business should be…

Sustainable Intangible Products….and Buying a Car…Choices, Choices, Choices

Beautiful business welcomes submissions from anyone with a beautiful business to showcase or a sustainability, ethics or responsibility issue to share. The two submissions below are from guest writers Viacheslav and Mariia from Ca’Foscari University of Venice. The views, research and cited materials are their own and should you wish to contact them, find their emails attached.

Sustainable intangible product. What does it mean?

Viacheslav Iurkov, M.Sc. student at Ca’Foscari University of Venice.

Probably the majority of us are acknowledged with such notion as “environmentally friendly products”. These “eco-friendly products” are designed in such a way which helps to reduce negative impact on the environment. For example, many European supermarkets have stopped using plastic bags. Or another example – 71% of all IKEA products are made from recycled materials.
But have you ever thought that not only tangible goods could bring with them the “eco” component? Have you ever assumed that you could watch “eco” video and send “eco” e-mails? The answer is “Yes, you can”.
In fact, intangible products might harm the environment even in much serious way than the tangible ones. Let us consider such IT companies like Google or Microsoft. These giants are one of the biggest electricity consumers – powering and cooling the data centers acquire large portions of energy use that harm the environment in terms of follow-up greenhouse gas emissions released because of the energy production. Moreover, Google and Microsoft continue acquiring powerful servers that result in more energy consumption and leaving large carbon footprints.
However, IT companies try to reduce their impact on the environment and, therefore, implement green practices into their supply chains in order to reach environmental sustainability. Think of Google. This is one of the leading US corporations who actively support “green” practices. For now, the corporation uses 33% of total electricity obtained from renewable sources. Moreover, Google has very efficient data centers which use only 50% of the energy of most other data centers. Therefore, one may be sure that “consuming” Google products like Gmail or Youtube he almost does not harm the environment. Let us look at the numbers provided by Google (see also two figures below).
100 searches with Google could be compared to drying hands, ironing a shirt, or drinking orange juice. 3 weeks of non-stop streaming on Youtube are equivalent to one load of laundry. 1 year of using Gmail is equivalent to write, mail, and dispose 6 letters via physical mail.
Google actively invites network users to reduce their impact on the environment by using its products. Particularly, a small business could be more sustainable if instead of setting its own servers, it could host its e-mails locally with Gmail. Many educational institutions have applied these practices.
Unfortunately, not all IT companies proceed with “green” practices. For example, Microsoft is still on its way to ensuring carbon neutrality. Recently the corporation has announced its program to become carbon neutral that is planned to start in July 2013. In turn, Google is providing its carbon neutrality activities since 2007. The practices which will be applied by Microsoft to achieve carbon neutrality are similar to those ones which now are actively supported by Google – buying and investing in renewable energy as well as data centers improvement.
However, the sustainable trend is set, and every self-respected corporation, not only in IT industry, should follow it in order to keep its chances of being competitive in the future.

Environmental impact of Google search

Environmental impact of YouTube and Gmail

What do you need to know about corporate social responsibility of the automobile company when you buy a car? The case of Fiat S.p.A.

Koval Mariia, student at Ca’Foscari University of Venice

When you decide to choose the producer of automobiles, you probably pay attention to the company’s reputation, quality and safety of its products and price. But, not all the potential buyers know that all the mentioned parameters depend on the company’s corporate social responsibility; in other words, whether the company is economically, socially and environmentally responsible. Indeed, corporate social responsibility (CSR) has been practiced for more than 70 years. Looking into the past, one case became a starting point in the CSR path. In 1919 Henry Ford decided to reduce shareholders’ dividends in order to increase wages and decrease prices for cars. In such a way he wanted to raise social welfare by sharing profits with workers and increasing customer surplus. Unsatisfied shareholders of the Ford Motor Company went to law; and the Michigan Supreme Court acknowledged Ford’s decision as wrongful since it violated the main goal of the corporation to maximize profits of the shareholders. Only in 1950 the New Jersey Legislature declared that, apart from the main activities, corporations obliged to improve social, economic and legal conditions of the society.

Nowadays, years after, automotive companies all over the world have been applying CSR pursuing various objects. Main privileges of the socially responsible business are the opportunity to get immediate benefits as lower production costs, lower risks and the higher efficiency. In addition to the ‘short-run bonuses’, in the long run, while having stable sustainable development, companies can get such benefits as stronger competitive position, savings of the resources and raw materials and stable positive reputation.

For the potential buyer, perhaps, it would be interesting to find out that in Europe one of the automotive producer that follows principles of CSR and values its reputation is Italian company Fiat S.p.A. CSR of the Fiat Group is reflected mainly in its environmental protection policy. Thus, the Fiat Group actively invests in R&D sector to develop new, environmentally more efficient designs. The usage of the innovation of the clean technology allows the company to reduce the negative environmental impact of the vehicles through the minimization of the fuel consumption, emissions and the noise, usage of the alternative and renewable energy, but also trough the improvement of the product recyclability.

During the last years the Fiat Group managed to achieve remarkable results in the decrease of its negative impact on the environment. Thus, in Europe, in 2011 the Fiat Group managed to reduce the average total CO2 car emission on the 4% comparing to the 2010 (Graph). In particular, over the last ten years the corporation reduced the average total CO2 emissions of cars sold in Europe by 22%. The company develops and produces engines with the usage of the innovative technologies that allow cutting fuel consumption and vehicle emissions. Thus, in 2011 the company introduced two-cylinder turbocharged gasoline engine TwinAir Turbo 85 hp that produced 30% less CO2 emissions comparing to the engines of the similar performance. Such engine had the lowest CO2 emission level among all gasoline engines in Europe. Another innovative solution of the Fiat Group is HEMI eight-cylinder engine family that increases fuel economy. In 2011, the company sold 80% of such V-8 engines. Despite an application of the wide range of the innovative technologies, aimed to reduce CO2 emissions by the vehicles, the company has an emission reduction strategy to use the alternative fuels, such as natural gas and biofuels. The advantage of the natural gas lies in its property to produce the lowest level of CO2 emissions and to renew in the form of biomethane. Nowadays, Fiat S.p.A. is the European leader in a production of the natural gas vehicles. It has the 65% market share and supplies more than 42000 natural gas vehicles in Europe. In addition, the company is a leader in the Brazilian market in a production of the ‘Flexfuel’ vehicles that use gasoline and bioethanol. Another remarkable innovation of the company is the ‘TetraFuel’ engine that uses four different types of fuels: refined crude oil, anhydrous ethanol, gasoline and natural gas.

Therefore, Fiat S.p.A. proves that corporations in the automotive industry are aware of consumers’ and business customers’ willingness to align themselves with the businesses that have a reputation of economically, socially and particularly environmentally responsible. To maintain competitive positions in the global market, automotive companies have developed CSR plans of actions, which would allow implementation of CSR by the corporation’s headquarters, as well as by the subsidiaries.


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This entry was posted on 03/04/2013 by .
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