July could go down in history as a pivotal month for green consumer products. Less than a week after retail giant Wal-Mart (s WMT) said its suppliers must disclose the environmental impact of their products, electronics heavyweight Samsung Electronics on Monday unveiled a plan to cut its carbon emissions by 50 percent and invest billions of dollars toward developing greener products. Samsung’s announcement will add pressure to its competitors to take sustainability more seriously and could open new opportunities for companies developing products and services that help firms track and reduce the carbon footprints of their operations.
Samsung’s Eco-Management 2013 plan lays out four core green objectives: reducing greenhouse gas emissions from manufacturing facilities by 50 percent by increasing the energy efficiency in its semiconductor and LCD lines and reducing the amount of emissions that result from the use of its products by 84 million tons over five years; ensuring all of its products exceed “global eco-mark standards” in terms of energy efficiency and the use of recyclable and green materials; investing about $4.3 billion developing these new products and reducing the carbon emissions of manufacturing facilities; and “enhancing” green partnerships with suppliers and partners.
The fourth objective should prove the most directly beneficial for the growing industry around tracking and reducing carbon emissions in business operations. Samsung said it intends to strengthen environmental cooperation with suppliers and partners and will encourage the use of green management systems and the establishment of greenhouse gas inventories. A growing list of startups and more established firms have been rolling out products and services for carbon management, and the space has become a hot play for venture capitalists.
Samsung’s move should also put pressure on other electronics manufacturers to step up their green initiatives. The South Korea-based firm will increasingly use its new eco push in the marketing of newly developed products — they’ll be labeled “Eco-Product,” “Good Eco-Product,” or “Premium Eco-Product,” with the good ranking meaning it’s exceeded basic industry requirements. But Samsung didn’t specify which industry standard it would follow, only stating that it uses a “strict internal evaluation criteria” that is based on “global eco-mark standards.” Samsung is already considered a leader within the mobile industry in terms of the environmental impact of its products. The environmental advocacy group Greenpeace recently ranked it third out of 18 global PC and mobile manufacturers for its policies and practices related to energy, chemicals and e-waste.
Samsung might also be positioning itself to take advantage of the South Korean government’s recently announced plan to invest $85 billion in “green growth” areas over the next five years. The investment seems mostly aimed at small and mid-sized firms developing renewable energy, but the government also will offer tax breaks and loan guarantees to companies developing other green technologies that might include Samsung’s products. Samsung, however, didn’t mention the incentives as part of the reason for its latest move.
The global economy may be struggling, but more and more companies are realizing that in order to be competitive in the future, they must get serious today about the environmental impact of their products. If the fear of climate change doesn’t spur certain executives, the risk of declining revenues will.