The Battle of Shareholder Value vs Environmental Concern

Posted by Andy Boyer in Big Businesses, Charity, Marketing

So back in the 90’s, it started becoming en vogue for Corporations to donate profits to charitable organizations.  This started a very interesting debate about whether companies should simply deliver value to their shareholders, or be responsible for bettering the communities in which they belong.

An easy argument was to drop the charitable giving money into the overall Marketing budget and call it "Community Relations."  If a giant bank sponsors runs for Leukemia and Breast Cancer research, then one could argue the CPM was worth the donation.  It’s a pretty compelling argument that you can get a lot of community goodwill on your side, which then helps with non-tangibles such as recruiting, brand management and corporate morale.

Fast forward to 2007, and the magic bullet is in going "Green." Companies are denting their bottom line to use recycled paper, advanced heating and cooling systems, subsidizing public transportation for employees and other efforts.  And shareholders seem to be ok with that.

But what about Google’s latest announcement.   According to a Google release, "Google.org is committed to finding innovative transportation solutions to reduce greenhouse gas emissions that cause global warming…As part of this initiative, we are issuing a $10 million request for investment proposals (RFP). We plan to invest amounts ranging from $500,000 to $2,000,000 in selected for-profit companies whose innovative approach, team and technologies will enable widespread commercialization of plug-in hybrid electric vehicles, electric vehicles and/or vehicle-to-grid solutions."

Now, you can look at this 3 ways:

1) Google makes $10 million in an hour, so it’s irrelevant to shareholders.  Great PR move.

2) This is a completely for profit effort for Google, stemming from their M+A group, and Google Shareholders should benefit down the road.

3) This $10 Million is nice, but why is an online search and media company investing in Transportation, something they could not possible know anything about?  Shareholders should be annoyed.

On a lighter note, what happens if Google ends up building the killer transportation app?  Will everyone be commuting to the Microsoft campus on the Google Mobile?