“People just want a cell phone,” Dan Hesse, the CEO of Sprint, told me. “They don’t care how green it is.”
“But we think they will over time.”
Is that sufficient reason to try to sell “green” phones, aggressively promote recycling and buy renewable energy?
“People want to do business with good companies,” Hesse says. “I want us to be thought of as a very good company.”
I met with Hesse last week in Washington to talk about Sprint’s environmental practices. They’re impressive.
You probably recognize Hesse. The 56-year-old chief executive has been starring in Sprint commercials for the past couple of years, touting the company’s “Simply Everything” plan which offers unlimited calling, text and email for one price. Sprint’s subscriber numbers have perked up a bit this year, but the company remains the No. 3 player in the cell phone industry (far behind Verizon and AT&T), with about 48 million subscribers and $32.3 billion in revenues. Its stock price is down by nearly 40 percent in the past two years, trailing rivals and the S&P500.
So Hesse, who has been CEO since the end of 2007, could be forgiven if he had shoved environmental concerns off the agenda.
To his credit, he hasn’t.
Sprint offers not one, but three environmentally-friendly phones–the Samsung Restore, which is partly made from post-consumer recycled plastics, the Samsung Reclaim, whose casing is made in part from bioplastics sourced from corn and the LG Remarq, which also uses post-consumer recyled plastic. Their chargers meet the EPA’s Energy Star standards and they all contain “low levels” of potentially hazardous chemicals (PVCs, BFRs, Phthaltes and Beryllim.).
Because of its aggressive promotion of recycling, Sprint’s collection rate for recycling and reuse of phones has climbed from 22% in 2007 to 34% in 2008 to 42% in 2009–about twice the industry average, according to Hesse. Like some electronics companies, Sprint now offers free recycling, not just to its own customers, but to anyone who has wireless phones, batteries, accessories and data cards that they no longer use, as part of a program called Sprint Project Connect. Proceeds, if any, go to charity. Better yet, a program called Sprint Buyback pays Sprint customers for their old devices, which are then either recycled or, more often, refurbished and reused. The company’s long term goal (2017) is to collect nine phones for every 10 that it sells.
Hard to believe, but Americans discard 16,000 cell phones every hour. Here’s an amusing Sprint video reminding customers that throwing away old phones is a bad idea.
And, in terms of its own operations, Sprint has pledged to reduce its greenhouse gas emissions by 15 percent by 2017, and it’s using wind power to deliver about 24% of the energy use in its commercial buildings. Its headquarters in Overland Park, Kansas, are 90 percent powered by wind.
A CEO’s commitment can get a company moving in a hurry. Check out the back of Hesse’s business card (below). It tells everyone who meets him that he is proud that Sprint ranked No. 15 overall in Newsweek’s 2009 Green Rankings of big companies; it was the only wireless provider ranked in the top 100. Hesse also chairs the company’s corporate social responsibility task force.
So what’s going on here? Partly it’s personal. Hesse, who is the son of a career army officer, told me that he’ always hated waste. “My kids will tell you, I drive them nuts. Part of it’s being cheap. The way to get grounded is to leave a light on,” he says.
But Hesse, of course, has to make the business case for all these initiatives. What he argues–without a lot of hard evidence, to be sure–is that over time Sprint’s leadership in sustainability will help the company attract smart and more committed employees and build a reputation among customers who care about the environment. Young people in particular tell him they want to work for a company that makes a positive difference in the world.
“When people think of the Sprint brand, I want people to think, hey, that’s a really good company, they lead in green initiatives,” he says.
He also wants to stay ahead of the competition. While Sprint and Samsung are working together to develop greener phones, so are rival T-Mobile and Motorola, which makes a phone called the Renew which is made of recycled plastic bottles and has its carbon footprint offset by the carbonfund.org.
But if those benefits seem a little squishy, it turns out that the costs of all these initiatives are relatively modest. Making the greener phones doesn’t cost significantly more than making ordinary ones, Hesse says. Getting hazardous metals out of the phones is smart because they cost more to dispose of at the end of a phone’s life.
As for the recycling push, the costs are recovered by either reusing the phones (they are offered to low-income consumers in the U.S. or in the developing world) or by selling materials if the phones are recycled. “We think it’s going to be sustainable,” Hesse says.
New retail locations, meanwhile, are being designed to meet LEED (Leadership in Energy and Environmental Design) criteria but they won’t be LEED-certified because the costs of going through the certification process can’t be justified, he told me.
Until I met with Hesse, I wasn’t aware of Sprint’s environmental work, so I asked him in the company intends to be more vocal about its efforts. “Internally, big-time,” he said, but for now the green messaging is communicated mostly on Sprint’s website and in its store. A mass market campaign can’t be justified, at least not now–although “you never know what our ad agency will come up with next.”