Environment
Johnson & Johnson, the famous health care corporate started as a humble, family owned business in New Jersey, U.S. in the year 1886 (Johnson & Johnson Services Inc., 2016). Between 1886 and 1910, the company manufactured mostly first aid kits, surgical aids, antiseptic products, sanitary aids and maternity kids that were very useful in improving the standard of public health care. Soon, Johnson & Johnson expanded overseas to UK, Argentina, Australia, South Africa, Mexico and Brazil. From 1954 to 1989, the company revolutionized the pharmaceutical market with its huge range of baby-care and wound-care products, and further expanded to India, China, Russia and rest of the world (Johnson & Johnson Services Inc., 2016). In 90’s the company came up with its novel coronary stents that revolutionized coronary surgeries, and till date Johnson & Johnson remains a giant in consumer health care (Johnson & Johnson Services Inc., 2016).
Though a pharmaceutical company with such a long history of service to mankind is human friendly, its raw material sourcing, manufacturing, packing and transporting as well as waste treatment processes put much stress on the environment. Johnson & Johnson despite being a for-profit organization started realizing its responsibility towards environment, and began setting environmental goals since 1987 (Johnson & Johnson Services Inc., 2016). Since 1999, Johnson and Johnson started investing in on-site co-generation and renewable energy projects, with a target to reduce 7% of its green house gas (GHG) emissions across all its facilities worldwide (Johnson & Johnson Services Inc., 2016). It also used carbon offsets and green power purchase to reduce its carbon footprint. Recently, the company has set up a, first of its kind, 2.1-megawatt biomass boiler for its biotech facility in Ireland. Biomass is a carbon neutral fuel, and the facility can reduce 22% of its carbon emissions by shifting from natural gas to biomass fuel. Further, Johnson & Johnson is the “second largest corporate user of solar power” in US (Marketing-Schools.org, 2012), with 10 solar power installations in its facilities (Johnson & Johnson, 2007). Solar power is a clean energy resource, and it saves energy as well as water utilized in the generation of fossil fuel derived electricity.
According to Parera, Pino and Oliveira (2013), Johnson and Johnson has been accounting and reporting its GHG emissions since 2003. One year after its commitment to reduce GHG emissions, the company realized it was not track because large emission reduction projects competed with capital budgets allocated for business development or regulatory compliance. But, the company’s energy team identified the benefits of energy and emission reductions in the long run (Parera, Pino and Oliveira, 2013). So, Johnson & Johnson allotted a capital relief fund (CRF) of $40 million in 2005, which could be used by its various business units to invest in GHG reduction projects. Further, government rebates, tax credits and grants were also useful in recovering some cost invested in green technologies (Parera, Pino and Oliveira, 2013). Once a business unit identifies a emission reduction project opportunity, it applies internally for the CRF. A specialized team thoroughly assesses the project’s estimated GHG emission reductions, energy savings and return on investment (ROI) before granting the fund.
Johnson & Johnson’s expected ROI on CRF projects was only 15% but, from 2009 there was an average ROI of 19%, and the CRF was allowed to go beyond 40 million USD (Parera, Pino and Oliveira, 2013). Though a few projects did not perform well, those that did outweighed the losses from failed projects to the company. One particular chiller optimization project titled “Project cold” under the CRF program, aimed at reducing energy consumption of chillers at the facility. But, the project produced water savings in addition to energy savings, by reducing water loss through cooling tower evaporation. Thus between 2010 and 2011, Johnson and Johnson was able to reduce its GHG emissions by 5% despite considerable increase in its sales (Parera, Pino and Oliveira, 2013). Johnson & Johnson thus committed to a new target to reduce emissions by 20% from 2010 levels by 2020, without using voluntary renewable energy credits or external carbon offsets through emission trading. Thus for-profit corporations can positively impact the environment and derive financial benefits as well as good public image in return.
References
Johnson & Johnson. (2007). 2007 Sustainability Report - jnj.com. Retrieved April 5, 2016,
Johnson & Johnsonn Services Inc. (2016, April 04). Generating Green Power. Retrieved
Marketing-Schools.org. (2012). Green Marketing | What is Green Marketing? Retrieved
Parera, A., Pino, S., & Oliveira, B. (2013, February). Aligning Profit and Environmental
Sustainability: Stories from Industry (Working paper). Retrieved April 5, 2016, from World Resources Institute website: http://www.wri.org/sites/default/files/pdf/
aligning_profit_and_environmental_sustainability_stories_from_industry.pdf
