Back in 2004, GE’s top-management team was going 
through its annual strategic planning review when the 
management team came to a sudden realization: six of 
the company’s core businesses were deeply involved 
in environmental and energy-related projects. The appliance business was exploring energy conservation. 
The plastics business was working on the replacement 
of PCBs, once widely used in industrial compounds,
which had been found to have negative consequences 
for human health and the environment. The energy 
business was looking into alternatives to fossil fuels, 
including wind, solar, and nuclear power. Other businesses were looking at ways to reduce emissions and 
use energy more efficiently. What was particularly 
striking was that GE had initiated almost all of these 
projects in response to requests from its customers.
When these common issues surfaced across different lines of business, the group members realized 
that something deeper was going on that they needed 
to understand. They initiated a data-gathering effort. 
They made an effort to educate themselves on the science behind energy and environmental issues, including greenhouse gas emissions. As CEO Jeff Immelt later explained, “We went through a process of really 
understanding and coming to our own points of view 
on the science.” Immelt himself became convinced 
that climate change was a technical fact. GE execu tives engaged in “dreaming sessions” with custom ers in energy and heavy-industry companies to try to 
understand their concerns and desires. What emerged 
was a wish list from customers that included cleaner 
ways to burn coal, more efficient wastewater treatment 
plants, better hydrogen fuel cells, and so on. At the 
same time, GE talked to government officials and reg ulators to try and get a sense for where public policy 
might be going.
This external review led to the conclusion that 
energy prices would likely increase going forward, 
driven by rising energy consumption in develop ing nations and creating demand for energy-efficient 
products. The team also saw tighter environmental 
controls, including caps on greenhouse gas emissions, 
as all but inevitable. At the same time, team members 
looked inside GE. Although the company had already 
been working on numerous energy-efficiency and 
environmental projects, the team realized there were some gaps in technological capabilities, and there was 
a lack of overarching strategy.