Report on Greenpeaces Unfriend Coal Campaign and Facebook

WAC REPORT

3/4/2013

WAC REPORT

Submitted To

Dr. Abha Chatterjee

Submitted By Pankaj Dnyandeo Kolte | 2012PGP241 Section E

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REPORT ON GREENPEACES UNFRIEND COAL CAMPAIGN AND FACEBOOK

Table of Contents
Executive Summary................................................................................................................................. 1 Introduction: ........................................................................................................................................... 2 Problem Statement: ................................................................................................................................ 2 Analysis: .................................................................................................................................................. 2 SWOT analysis ..................................................................................................................................... 2 Strengths ......................................................................................................................................... 2 Weaknesses .................................................................................................................................... 2 Opportunities .................................................................................................................................. 3 Threats ............................................................................................................................................ 3 Assumptions:....................................................................................................................................... 3 Alternatives: ............................................................................................................................................ 3 Conclusion ............................................................................................................................................... 4 Recommendation and Implementation Plan:......................................................................................... 4

Pankaj Kolte| 2102PGP241

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March 4, 2013

REPORT ON GREENPEACES UNFRIEND COAL CAMPAIGN AND FACEBOOK

Executive Summary
The report Greenpeaces Unfriend Coal campaign and Facebook is based on a case by the same name and written by Paul Bigus, under the supervision of Professor Michael Sider of the Richard Ivey School of Business. It discusses the campaign launched by Greenpeace against Facebook to pressure it into adopting cleaner energy sources for its data center facility in Prineville. Focussing on the harmful effects of the usage of coal as an energy source Facebook, Greenpeace expects Facebook to set an example to other IT companies by adopting greener energy policies. According to Greenpeace, the fact that Facebook can influence a large number of people and has a huge brand value makes it a social obligation on Facebook to adopt these policies. The report analyses the case from the point of view of Facebook, suggests alternatives considering the relevant facts and gives recommendation as what future course should Facebook adapt.

Pankaj Kolte| 2102PGP241

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March 4, 2013

REPORT ON GREENPEACES UNFRIEND COAL CAMPAIGN AND FACEBOOK

Introduction:
On January 21, 2010, Facebook announced that it would be opening a new datacentre facility in Prineville, Oregon, 147,000 square feet in size and at a cost of US$188 million. A key feature of the location provided was the cool, dry air which will help to cool internal systems, resulting in better energy efficiency. Facebook claimed the power usage effectiveness ratio was 1.15. Facebook planned to hire 35 full-time employees along with additional part-time and contract positions being created in the new facility. This created excitement in Prineville, a region hit hard by the global economic instability with unemployment rate being 20%. On discovering that the electricity used to power the data centre operations would be from PacifiCorp, a utility provider that sourced 60% of its energy from burning coal, Greenpeace launched a social media campaign in February 2012 to protest the decision. First, by utilising Facebooks own network to create a Facebook group page that provided details about the new data centre using electricity sourced from coal. Next, in response to Facebooks decision in July 2010 to double the size of the Prineville data center, Greenpeace stepped up its campaign by launching a YouTube video on September 16th, 2010, that publicly critiqued the environmental sustainability of the new data center.

Problem Statement:
How should Facebook respond to the mounting pressure being created by Greenpeaces Unfriend Coal Campaign, considering that the company is in no position to scrap the Prineville project and having to maintain its brand image?

Analysis:
SWOT analysis (From Facebooks perspective)
Strengths Facebook is a much larger company (with a user base of 500 million) than Greenpeace, with a larger brand value. This can be leveraged. Facebook can convince government and the people about its new data centre being very efficient and also the fact that it will help create jobs in the economically hard hit region. Rapid growth in the user base of Facebook, which Greenpeace was capable of using against Facebook itself. It was nearly impossible for Facebook to shift the data centre from Prineville as the location was ideal for the project.
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Weaknesses

Pankaj Kolte| 2102PGP241

March 4, 2013

REPORT ON GREENPEACES UNFRIEND COAL CAMPAIGN AND FACEBOOK

Requirement of huge amount of electricity for a continuous running of the data centers which have computing intensive servers. Facebook can agree to Greenpeaces demands and possibly use greener energy in the future which would help increase their brand value and influence other IT giants to follow suit. Greenpeace operated servers in a rented North Virginia data centre that sourced 46% of its power from coal. This can be used as a counter-attack against Greenpeaces campaign. Greenpeace is an established organisation with a track record of a number of successful social campaigns for the cause of the environment. A possibility of brand erosion due to anti-environment sentiments about the company among its users.

Opportunities

Threats

Assumptions:
Greenpeace assumes that other major companies in the industry like Yahoo, Google and Microsoft will follow Facebook in these initiatives. The costs associated with abandoning the current data centre that is being developed are very high. Greenpeace will not stop the campaign against Facebook and give in easily considering the financial backing it has.

Alternatives:
1. Facebook can decide not to take any action as it wasnt doing anything illegal. 2. Facebook can join hands with Greenpeace to promote clean energy and ensure usage of clean energy in its own future facilities, as abandoning this project is very difficult. 3. Facebook can highlight the advantages of its new facility. The fact that they have considered Prineville in order to reduce their carbon footprint and the employment opportunities that the facility will create in the town will help in improving their brand image. 4. Facebook can counter Greenpeace by highlighting on the usage of coal in Greenpeaces New Virginia data centre. The fact that Greenpeace themselves arent following their recommendations is proof that the sourcing of green power is not an easy task.
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REPORT ON GREENPEACES UNFRIEND COAL CAMPAIGN AND FACEBOOK

Conclusion
The case indicates that users and media are not happy with Facebooks decision of using non-renewable sources of power for its datacenter. Greenpeace is campaigning severely against Facebook and around 500,000 people are voicing their concern. Considering the line of business that Facebook is in, it cannot damage its public relations and as an organization should have the moral responsibility of preserving the environment.

Recommendation and Implementation Plan:

Considering the huge cost of infrastructure borne by Facebook in setting up the data centre at Prineville, scrapping the project is impossible; I suggest that Facebook should enter into talks with Greenpeace and explain the reason for continuing the project. However, Facebook the capacity to ensure environmentally friendly operations in its future endeavours. . Considering the fact that Facebook has 500 million users, it might also encourage and pressurize other companies in the same industry to switch to clean sources of energy. It has the strength of being a torch bearer for green practices in the IT industry, thereby substantially improving its image in the eyes of the masses. This can be done by promising to use green energy in the future projects and promote clean energy. It can end the current animosity and collaborate with Greenpeace, who will be able to guide the company in its ventures.

Pankaj Kolte| 2102PGP241

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