Ch.4 The Marketing Environment.

American Express and The Environment

''Do a little digging, and you'll find that this company's environmental efforts are wide-ranging and impressive''.

   American Express is a household name. Everyone knows you don’t leave home without it. But its environmental policies are less well known. The global financial services company has been quietly reducing its impact and funding eco projects for decades, though details of its various green initiatives are buried deep in its website. But do a little digging, and you’ll find that its efforts for the environment are wide-ranging and impressive. You could say the credit card company is better at walking than talking.

   Although credit card companies do not traditionally have a large carbon footprint, American Express acknowledges that it is a “significant user of natural resources” and a “large consumer of paper.” And it is making a big commitment to reducing its impact. Having determined that its emissions in 2006 exceeded 300,000 metric tons of CO2 and its equivalents 70 percent of which came from electricity the company vowed to reduce its carbon footprint by 10 percent by 2012.

   To reach its environmental goals, American Express is taking a multipronged approach. It is focusing inward, on its own operations, business, products, and customers; and outward, on ways to help environmental organizations, other industries, and the world at large.

Environmental Program

   The credit card company’s primary environmental initiatives revolve around operating sustainably and reducing its impact. It recently implemented an enhanced environmental program built on its first set of principles, established nearly two decades ago. The program’s three elements are energy conservation, waste reduction, and sustainable use of natural resources.

• Energy conservation: to operate more efficiently, the company has installed energy-efficient technology and lighting systems and building controls to manage electrical usage. It also supports green building design, as evidenced by its facility in Sydney, Australia.
• Waste reduction: in addition to encouraging customers to go paperless for their statements, decreasing paper consumption, and offering a robust recycling program, American Express is looking for ways to reduce waste even in the lunchroom. Green initiatives in its cafeterias include reusing fryer oils for bio-diesel fuel, offering organic foods and sustainable seafood, and using bulk condiments.
• Natural resources: the company strives to respect existing resources when building new facilities, as well as conserve land, water, and fuel.

   To ensure that its program is respected and followed, American Express created an Office of Environmental Responsibility, headed up by senior executives at the company. It is also holding its vendors accountable for their environmental policies, by reviewing the environmental impact and responsibility of its supply chain.

Environmental Impacts of American Express

   The services sector, which now accounts for three-quarters of the nation’s employment and Gross Domestic Product, has a major influence on the environmental health of the United States (Halperin, 2000). So although not typically regarded as a major contributor to environmental degradation, financial-services companies such as American Express, like all companies, have an environmental impact. And while American Express has no formal environmental policy in place, many of their leading competitors have developed one in response to pressures from various stakeholders.

   A significant amount of American Express’s environmental impacts result from their internal operational activities. These include heating and lighting in their buildings, transport of employees and materials, waste in all its forms, purchasing of goods and services and the use of resources such as energy, paper and water. These activities contribute to pressing environmental issues such as global climate change, solid waste issues and depletion of the earth’s natural resources. However, good management of these activities can not only reduce the overall environmental footprint of the company, but also assist American Express in achieving higher operational efficiency and cost reductions.

   In addition to internal activities, American Express also has an environmental footprint associated with some of their business activities such as marketing. Similar to Coca-Cola, Microsoft and McDonald’s - American Express is considered one of the world’s most reputable brands. According to Business Week American Express is the 14th most valuable brand in the world and is valued at over $18 billion (Business Week Online, 2006). Consistent with building a strong brand is having exceptional marketing and advertising efforts. In fact, it was estimated that global advertising expenditure for the company was $694 million in 2005 making American Express the world’s #45 advertiser (Mind-Advertising.com, 2006).