Bottom line: Apple’s latest environmental initiative in China looks like a savvy and inexpensive way to raise local awareness of environmental protection, in a move that will please Beijing and help it improve its government relations.
Just 3 weeks after capturing local headlines with its plans to invest in solar farms in China, global gadget leader Apple (Nasdaq: AAPL) is rolling out more environmentally friendly initiatives in an attempt to woo both consumers and government officials in one of its most important markets. This latest initiative probably won’t get much attention in western media, as it looks mostly like a publicity ploy even though it does lay out big goals. But foreigners were never Apple’s real target with this announcement, which instead is part of its recent campaign to win over Beijing as well as a broader base of Chinese consumers.
I’m being a bit cynical in saying this latest announcement, which I’ll describe shortly, is purely a public relations ploy. The fact of the matter is that China is suffering from some of the world’s worst environmental degradation on the planet right now, thanks to 2 decades of breakneck growth that saw the country pursue economic development at the expense of almost everything else.
So while Apple’s moves may be relatively small in scale and expense, its efforts will certainly be appreciated by Beijing and will also provide a huge boost to raising awareness about environmental protection among average Chinese. What’s more, Apple’s strong local image as both cool and a trend setter should rub off at least partly onto its new focus on environmental protection, which will also please leaders in Beijing who are strongly trying to promote the issue.
The centerpiece of Apple’s new announcement comes in forest management, and will see it support a program being led by global environmental stalwart the World Wildlife Fund. (company announcement) That program aims to introduce responsible forest management practices to an area that could eventually cover up to 1 million acres of land. Irresponsible cutting of trees is often blamed for desertification in parts of interior China and other environmental degradation, and Beijing has been trying to take steps to reverse the process where it can.
This latest announcement will also see Apple expand its renewable energy projects from other parts of the world to its production facilities in China, most of which are run by third-party contract manufacturers. This part of the announcement looks a little more PR-ish than the forest initiative and doesn’t contain much additional information, and Apple admits the effort to reduce carbon emissions from manufacturing will take years.
This pair of new initiatives comes just weeks after Apple announced it will build 2 new solar farms in interior Sichuan province. (previous post) That project will add a relatively modest 80 megawatts of power to China’s national grid, and I previously pointed out the significance that the official state-run Xinhua news agency was leading the coverage of the initiative. Previously the company also announced an iPhone recycling program, though it has reportedly met with limited success.
My earlier comments that Apple is probably spending relatively little for these initiatives is still largely true. The 2 new solar farms are unlikely to cost more than $100 million to build, and these latest 2 initiatives probably won’t be that costly either — perhaps totaling another $100 million over the next 5 years. Such sums are insignificant for Apple, which posts billions of dollars in profit each quarter alone.
But Apple realizes it’s quite a trend setter in China and can easily grab headlines, so this new set of initiatives will go a long way to helping publicize the importance of environmental awareness in China and give the issue a cool and trend-setting image. That will be hugely appreciated by Beijing, and could help Apple reverse an earlier trend that saw it criticized for its arrogance in official state media just 2 years ago.
Apple’s sudden environmental awareness in China seems to be the direct result of efforts by CEO Tim Cook, who is playing catch-up in trying to improve government relations after years of neglect by his predecessor Steve Jobs. I have to commend Cook for his efforts so far, which seem to be starting to bear fruit as local media coverage gradually turns more positive about Apple and its corporate responsibility in China.
(NOT FOR REPUBLICATION)