In industry as in life, role models can do wonders.
Many credit Walmart for turning the perception of green products and building practices from feel-good measures to policies that can cut operating costs. General Electric and Toyota, meanwhile, have both succeeded in very different ways in marketing energy efficiency.
But after that, the list gets kind of thin. General Motors has shown that it's possible to get money from the government by being on death's door and promising to green your products.
There are three reasons I have for this.
Reason No. 1, the plan. The company has already laid out an ambitious carbon reduction plan. It wants to reduce greenhouse gas emissions from both its operations and from the use of its products by 50 percent by 2013 on a normalized sales basis. In 2008, Samsung and its products emitted 9.4 million tons of greenhouse gases with about 60 percent of the emissions coming indirectly through products. By 2010, greenhouse gases will be down 45 percent from 2001.
"A large portion of our or manufacturing is in semiconductors, so there, reduction is about simplifying the lines, being more efficient about processing the wafers," said David Steel, senior vice president of strategic marketing. Tinkering with chemical deposition equipment and vacuum pumps cuts 15,000 tons of GHGs a year.
On the product side, Samsung wants to achieve 1-watt standby power for all of its electronics products like TVs, printers, PCs and microwaves by the end of the year. Some products are already at a 1-watt standby. In household appliances, the Zipel Sapphire Fridge with its new insulation and a better vacuum consumes 50 percent of a fridge did ten years ago. The Hauzen bubble washer uses 25 percent less power and 23 percent less water than drum washers. (The company recruited 100 power blogger housewives to extol its virtues.)
Eighty-five percent of the waste glass in LCD manufacturing and 100 percent of the waste wafers in chip production now gets recycled.
OK, but so what? Everyone has energy reduction goals, but that brings us reason No. 2. This is Samsung, one of the few large conglomerates that thrives on trauma.
Back in the mid-1990s, the company was a second-tier maker of the kind of electronics you might buy in a drug store: alarm clocks, portable air conditioners, portable TVs. The company's management didn't put much stock in industrial design, branding and marketing. Quality control was middling.
Then came the 1997 Asian currency crisis, which hit South Korea particularly hard. Samsung was forced to slash roughly 34 percent of its work force, dropping from 83,800 employees to 55,000 worldwide. It also had to sell, dissolve or restructure 100 business groups.
Rather than follow the usual strategy – cut prices – Samsung decided to go upscale. It hired Foote, Cone & Belding and western marketing execs to build a brand and became an Olympics sponsor. It even began to hire designers in Tokyo and from schools like the Parsons School of Design in New York and the Royal Academy of Art. The old Samsung was just as likely to hire a ring-tailed lemur as an art-school grad. An early presentation on global branding by a new marketing hire was met with silence by execs, until then-CEO Jong Yong Yun said: "I know what you are thinking, but touch him, and you're dead."
By the middle of this decade, Samsung had become No. 1 (or within striking distance of it) in TVs, cell phones, flash memory chips, displays and other categories. It received kudos for things like the first dual-screen phones and improved quality, which then made it a sought-after partner. Samsung no longer lived in the shadow of Sony. In consumer electronics, it was the equivalent of the Super Bowl.
We're currently experiencing an economic crisis. Consumers have not focused intensely on energy efficiency when it comes to TVs and household appliances until now. Color, price and other factors have always weighed more heavily on the consumer's mind. The California TV restrictions, new EnergyStar standards and carbon taxes might change that. Water and viruses could spur interest in home health technology. If customers start moving this way, Samsung will be relentless.
To top it off, Samsung Electronics chairman Lee Kun Hee resigned last year in the face of tax evasion charges. With opportunity comes the opportunity for redemption.
And that brings us to No. 3: They can. Unlike a lot of large companies who've outsourced many functions, Samsung has kept much inside. It has 111 subsidiaries, offices in 194 locations and 161,700 employees. It produces components as well as finished products. And this is just Samsung Electronics. The Samsung group includes companies specializing in hotels, construction, chemicals, securities, sugar, etc., all of whom are potential test customers and lab partners. Much of the research for solar panels will come straight from the LCD TV lbas.
A few years ago, Samsung released a washing machine with silver nanoparticles that helped disinfect clothes. (The ancient Romans used silver to disinfect.) Samsung now sells a laptop with a keyboard embedded with silver nanoparticles as well as air conditioners that kill viruses and fungi with silver. Hmm, do you think maybe the New Wave Series Washing machine that consumes 30 percent less energy and has a 1-watt standby power has any components that look like those found in 1-watt printers? Do you think the technology in the "stealth" vacuum cleaner that cuts noise by 10 percent might end up somewhere else?
"We are investing a lot now in household appliance R&D because they are big users of electricity in the home. We have to really improve the performance," Steel said.
Consider yourself warned.
Tags: chemicals, components, economic crisis, efficiency, energy reduction, flash memory, general electric, green consumer products, green it, greenhouse gases, household appliances, masdar, refrigerator, samsung, south korea