Knowledge Network: Faculty & Research

Companies that care about sustainability need to look beyond the environment and talk instead about the future of their business, Arizona Public Service executive Ed Fox said Feb. 11 at Thunderbird School of Global Management in Glendale, Ariz.

“The worst thing that happened to the concept of sustainability,” he said, “was being hijacked by the green movement.”

Fox, vice president and chief sustainability officer at APS and its parent company, Pinnacle West Capital, said sustainability needs to be a business model, not an environmental model. “The truth is, the environment would be fine without us,” he said. “It’s not about the environment. It’s about us, and what we do.”

He said companies that pay attention to long-term trends can find sustainable business models that protect shareholder value and the environment at the same time. “We can’t just be thinking about quarter to quarter profits,” he said. “We need to think in much broader terms.”

This approach at APS has earned the electric utility praise from several global organizations. For a third consecutive year, Pinnacle West was named one of the Global 100 Most Sustainable Corporations in the World by Corporate Knights, which evaluates a company’s performance on social, environmental and strategic governance issues.

Also for a third straight year, Pinnacle West was selected for the U.S. Dow Jones Sustainability Index, which recognizes sustainable business practices for publicly held corporations.

Fox said nobody knows what the business world will look like in 2050, but companies that want to survive need to think in a global context and look at patterns. “We’re probably not going to predict it right,” he said. “But we can identify trends.”

These trends include population growth, urbanization, global warming and technology advancements.

Fox said APS looks into the future and sees a world in which homeowners have much more autonomy when it comes to energy usage. Homes will generate electricity locally using renewable sources such as solar, and desktop monitors will let residents know when they are producing a surplus — which then can be sold back to the utility and used elsewhere on the grid.

“You’re going to be able to understand exactly how you use the energy, when you use the energy, what part of your house is using energy and which appliances are using energy,” Fox said. “And you’re going to be able to manipulate your energy usage in order to conserve.”

Fox said technology for such a system already exists, and APS must think about its changing role in society if the company hopes to survive. “It changes your whole approach to business,” he said.

Posted: 02|17|09 at 3:21 pm.
Filed under: Sustainability & Ethics.
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