Reference no: EM133155590
Case Study: Climate Friendly
This case examines Greenpeace's attempts to develop a solutions-oriented approach to introducing more sustainable technologies in the refrigerants industry. The case details the NGO's initial collaboration with the former East German manufacturer Foron to develop the 'climate-friendly' Greenfreeze refrigerant, and its subsequent negotiations with companies to diffuse the technology across the globe. The case provides the opportunity to examine the approaches open to civil society organizations in attempting to influence corporate policy, and in particular their roles and responsibilities in shaping the rules and norms of global business practice.
In the years from 2009 to 2017 the Coca-Cola Company installed over 3 million HFC-free 'climate friendly' coolers, a major step in the company's efforts to phase out the use of HFC refrigerants in its coolers and vending machines across the world. This switch from HFCs has contributed significantly to the company reducing the CO2 embedded in the 'drink in your hand' by 19% as compared to 2010 levels, meaning that the company is on track to meet its target of a 25% reduction by 2020.
Twenty-five years earlier, no one at Coca-Cola or at any of the major players in the refrigeration industry were considering alternatives to HFCs. In fact, if anything, HFCs were considered the environmentally friendly alternative to CFCs (which contributed to ozone depletion) and HCFCs (which also contributed to ozone depletion, but to a lesser degree). However, the campaigning pressure group Greenpeace had other ideas. Over two decades, the civil society organization worked to get its alternative clean refrigerant, 'Greenfreeze', commercialized and then diffused throughout the global refrigeration industry as an alternative to the existing climate-damaging refrigerants that dominated the market. Remarkably, in an industry dominated by big corporations, it was a civil society organization best known for its occupations and protests that proved the commercial viability of a clean alternative and which ultimately helped to develop the new markets and technologies that set the scene for Coca-Cola's transformation.
The emergence of Greenfreeze
Greenfreeze is a refrigerant, i.e. a type of coolant used in fridges, freezers, air conditioners, and other types of cooling appliances. It was first developed by scientists at the Dortmund Institute of Hygiene in Germany in 1989. At that time, most of the refrigeration industry was starting to move from refrigerants using CFCs to HCFCs and HFCs, which contributed less to ozone depletion. However, all of these alternatives, regardless of their impact on the ozone, contributed significantly to climate change. In fact, some HFC gases are up to 11,000 times more harmful to the climate than carbon dioxide, the most widely known greenhouse gas. However, although Greenfreeze succeeded in avoiding both of the main environmental problems of existing refrigerants (and their supposed replacements), the refrigeration industry took almost no notice of the new technology, and the Dortmund project was abandoned.
It was at this point that Greenpeace became involved in the story. The organization is probably best known for its dramatic campaigning activities on the high seas--saving whales, attempting to block nuclear tests, and storming oil platforms, among other things. But in 1992, when Greenpeace entered the Greenfreeze story, it decided to take a different approach to its usual confrontational, protest-based methods. Seeing the significant potential of the new technology, it decided to take it upon itself to champion hydrocarbons to refrigerator manufacturers. So, it was Greenpeace that gave Greenfreeze its distinctive name, and it was Greenpeace that attempted to resurrect the stalled development programme of the new technology.
The task of converting the refrigeration industry was, however, a daunting one. Most of the industry infrastructure, including the manufacturers and their suppliers, was set up for the existing refrigerants and so the major players refused to 'leapfrog' to an entirely new technology. Moreover, the powerful chemical industry, which supplied refrigerants to the fridge and air-conditioner manufacturers, was actively pushing HFCs as the replacement of choice for CFCs. Chemical manufacturers had little interest in developing Greenfreeze commercially since the mixture could not be patented (because it consisted of two common gases) and the technology was free.
In the end, only the former East German manufacturer, Foron Household Appliances, was willing to experiment with the new technology. Like many former East German firms after reunification, Foron was close to bankruptcy, but agreed to work with the Greenfreeze technology as a last resort. In May 1992, Greenpeace secured an arrangement between Foron and the Dortmund Institute, and commissioned ten prototype greenfreeze refrigerators. Before work could be completed though, the German authorities announced that Foron would be liquidated. Greenpeace and Foron rapidly organized a press conference, and almost overnight produced the first Greenfreeze fridge to present at the conference. Greenpeace also launched a grassroots campaign to persuade consumers and the media, and at the last moment Foron was saved and secured additional funding to keep going.
Overcoming barriers
Having overcome its first initial barrier, Greenpeace was to face many more in the years to come. At first, even its own staff posed a threat and the organization faced an internal revolt over the collaboration with Foron. Endorsing any kind of company was a significant departure from Greenpeace's usual confrontational style, and it was viewed by many inside the organization as a 'sell-out'. One member referred to the response as a 'bloody internal battle', not least because Greenfreeze represented the first main attempt by Greenpeace to leverage the market to try and create positive change in an industry.
The main resistance, however, came from the chemical and refrigerator industries. At first they launched press and communications campaigns, warning manufacturers and retailers that the technology was unproven, unfeasible, inefficient, and potentially dangerous-'a potential bomb' no less! However, Greenpeace's publicity machine generated over 70,000 advance orders from consumers, and eventually the claims against Greenfreeze were dropped as Greenpeace successively managed to persuade the government and scientists to test (successfully) for product safety. By the end of 1992 Greenfreeze was certified by the German safety standards authority, and the following February Foron's 'Green Cooler' fridge, using Greenfreeze technology, was awarded the prestigious 'Blue Angel' eco-label.
By 1994, all German manufacturers declared that they would abandon HCFCs and HFCs for Greenfreeze. Greenpeace, of course, heralded this as a major success, but for Foron, the wider adoption meant that the company rapidly lost its competitive advantage. The Greenfreeze technology was available free to anyone (and even Greenpeace received no financial remuneration or royalty for developing the product), so as the more sophisticated rivals adopted the new technology, Foron's precarious financial position and lack of marketing clout left it in a weak market position. The company eventually declared bankruptcy in 1996, and its refrigerator division was purchased by the Dutch firm ATAG.
Greenpeace, meanwhile, took its Greenfreeze campaign into the rest of Europe and ultimately worldwide. As it did so, most manufacturers initially resisted the technology, but with some smart manoeuvring from the civil society organization, most eventually switched. Greenpeace had quickly discovered that its leverage was greatest when it targeted the big brands using refrigeration technology rather than the manufacturers, whose business tended not to deal with the end consumer very often. A milestone in the campaign involved the 2000 Sydney Olympic Games, where Greenpeace targeted the Games' sponsors, including Coca-Cola and McDonald's, branding them 'dirty Olympic sponsors'. The organization even set up a website, CokeSpotlight, and released postcards and badges aping the style of the famous 'Enjoy Coca-Cola' slogan, with the acerbic 'Enjoy Climate Change'. Before long Coca-Cola announced a new refrigeration policy that would see all of its fridges and dispensing machines converted to Greenfreeze.
Similarly, McDonald's responded to the campaign, and in 2003 it opened its first HFC-free restaurant in Denmark. The next major milestone came in 2004 when Unilever, a leading producer of frozen food and ice cream, joined Coca-Cola and McDonald's in launching the Refrigerants Naturally! initiative, the main objective of which was to phase out HFCs in point-of-sale cooling equipment. Unilever has since placed over a million cooling units using climate-friendly refrigerants in every country in which it operates. Not content with this, Greenpeace moved on to targeting major retail brands such as Tesco, Sainsbury's, and Iceland in the UK, all of which eventually made commitments to phase out HFCs.
Greenfreeze goes global ... almost
In the rest of the world, too, Greenpeace was active in promoting Greenfreeze. Developing countries had posed a particular problem since Western multinationals were using their older CFC- and HCFC-based technologies in countries such as China and India. However, in China, Greenpeace played a pivotal role in 'matchmaking' governmental agencies and international donors (such as the World Bank, the German Ministry for Development Aid, and the US Environmental Protection Agency) with key international and local manufacturers. By 2008, Greenfreeze had become the dominant technology in China with a market share of 75%. Although progress in other developing countries was also initially hampered by various factors, including technical challenges, industry resistance, and government inertia, the technology has now been adopted in most major developing countries, including Argentina, Brazil, Indonesia, and India. Indeed, by 2016, over 800 million of the world's refrigerators employed Greenfreeze technology, and refrigerators using Greenfreeze technology made up approximately 35-40% of global production each year. Through a smart mix of government lobbying, media pressure, consumer activism, and behind-the-scenes dialogue, Greenpeace had succeeded in getting the technology adopted by virtually all of the leading manufacturers in Europe, Japan, China, Australia, India, and South America-almost everywhere in fact except North America.
The continued resistance of North American producers to make the switch to climate-friendly refrigerants remained the last major hurdle for Greenpeace. As one of the world's largest emitters of greenhouse gases, the US represents a key battleground for climate-change campaigners, yet even with major food and beverage manufacturers beginning to switch to alternative refrigerators, US manufacturers continued to stall. Ironically, one of the main problems was the obstacle posed by the Environmental Protection Agency's (EPA) approval process for green alternatives. US manufacturers were clearly reluctant to navigate through the necessary bureaucracy to try and secure EPA approval for the new technology.
In the late 2000s, things started to change at last. Through their relationship with Coca-Cola in Refrigerants Naturally! Greenpeace had the opportunity to engage with the Consumer Goods Forum (CGF), a global network of major consumer goods companies. Following a speech by Greenpeace's 'Solutions' director at the 2010 CGF conference, the members committed to phasing out HFCs by 2015, which meant that most of the largest consumer goods companies in the world, including huge players like Wal-Mart, now had a stake in ensuring that climate-friendly alternatives were available globally.
Greenpeace also worked with Ben & Jerry's, the ice cream company owned by another Refrigerants Naturally! partner, Unilever, to test out the US's first Greenfreeze-cooled freezers in two of its scoop shops as part of a trial approved by the EPA. General Electric followed by announcing its intention to bring Greenfreeze-style refrigerators to the US for the first time. The two companies then made representations to the EPA, which finally announced approval for some climate friendly refrigerants in a limited number of applications (including household refrigerators) in 2011. But in the face of continued resistance, it was not until 2014, more than 20 years after the launch of Greenfreeze, that the EPA expanded its list of approved clean refrigerants and enabled their use in larger-scale, commercial applications as well as air conditioning machines and vending machines.
Ultimately, from a novel partnership in the earlier 1990s, Greenfreeze, with the right marketing, has almost three decades later become globally ubiquitous, and is an outstanding example of the influence and positive impact that a CSO can have using an innovative strategy.
Q) Set out the tactics used by Greenpeace in the Greenfreeze campaign. Can you identify and elaborate on the overall strategy used by the organisation?