Wednesday, 4 July 2012

CASE 412 - Veolia

Veolia Environnement S.A. is a multinational French company with activities in four main service and utility areas traditionally managed by public authorities - water supply and water management, waste management, energy and transport services. In 2011, Veolia employed 331,226 employees in 77 countries. Its revenue in that year was recorded at €29.647 billion. It is quoted on Euronext Paris and the New York Stock Exchange. It is headquartered in the 16th arrondissement of Paris. Between 2000 and 2003 the company was known as Vivendi Environnement, having been spun off from the Vivendi conglomerate, most of the rest of which became Vivendi. Prior to 1998 Vivendi was known as Compagnie Générale des Eaux.

In 2003, Vivendi Environnement became Veolia Environnement. In 2005, the name “Veolia” was established as an umbrella brand for all of the Group’s divisions (water, environmental services, energy services and transport) and a new logo was created. In November 2009, Antoine Frérot has become the Chairman and the CEO of the Group after succeeding Henri Proglio who has been appointed CEO of Électricité de France. The change has been part of a huge politico-financial scandal in France as Proglio kept executive positions - and subsequent salary - in both companies until public criticism forced him to give up his Veolia revenues. Its Veolia Water division remains the largest private operator of water services in the world.

In March 2011 the company announce the birth of Veolia Transdev, the result of the combination of its transport subsidiary Veolia Transport with Transdev, a subsidiary of Caisse des Dépôts. Veolia Transdev is the world's private-sector leader in sustainable mobility with more than 110,000 employees in 28 countries. In July 2011, amid disappointing financial results, the company announced the launch of new restructuring plans and redeployment of assets and businesses. In December 2011, Veolia announced a €5bn divestment program over 2012-2013. The company would comprise only three divisions (Water, Environmental Services and Energy Services). The transport businesses Veolia Transdev would be divested.

Sustainability, corporate communications and sponsorship

The company’s sustainable development activities are diverse. Because it operates in four sectors with a huge potential impact on the environment, both the risks and opportunities presented by sustainable development activities are substantial. The company’s sustainability efforts are furthered by its Foundation and Institute which emphasize innovation and research.

The Veolia Environnement Foundation

The Veolia Environnement Foundation supports non-profit activities related to sustainable development, professional continuous development and the protection of the environment in France and overseas. The Foundation supports projects through financial aid and voluntary services provided by its employees. It also supports emergency relief operations in collaboration with humanitarian organisations. Following the earthquake in Haiti in January 2010, the Veolia Foundation dispatched 30 tons of emergency supplies (mainly water treatment units) via French Red Cross air transportation. The Foundation also sent Veolia technical experts to provide water to the disaster’s victims.

Institut Veolia Environnement

The Institut Veolia Environnement was created in 2001 to provide insights into major global challenges such as climate change, urbanisation and various economic, social and cultural issues related to the environment. The institute is built around a committee that brings together 7 experts and an international network of researchers and experts. Its activities include organising conferences and publishing articles and reports.

Boycott controversies

Veolia has been criticized for its involvement in the Jerusalem Light Rail, whose construction started in 2002; operations started in 2011. Critics argue that the railway stretches into the occupied East Jerusalem and to Israeli settlements regarded as illegal by the international community. In April 2010 the United Nations Human Rights Council declared the tramway and its operation to be illegal. The resolution was passed 44 to 1, with the UK, France and all the EU members of the Council voting in favour. Veolia has a stake in the CityPass consortium that holds the concession, and is also involved in the rail's operation. The Boycott, Divestment and Sanctions (BDS) campaign has been active against Veolia, principally in Europe. The Russell Tribunal on Palestine, at its London session of November 2010, considered Veolia's role in the Jerusalem Light Rail and found it to be illegal. In February 2011 the East London council of Tower Hamlets voted to review its position with Veolia and place no further contracts with it, after claiming that Veolia's work for the Israeli government assisted the "continued oppression of the Palestinian people". The Justice and Peace Commission, part of the Catholic Church in England, urged London municipalities to stop doing business with Veolia because of its involvement with illegal settlements. Veolia denied wrongdoing. Palestinian human-rights organization Al-Haq instructed lawyers in the Netherlands to submit a formal objection against the decision of Stadsregio Arnhem Nijmegen, a municipality, to award a public transport concession to Hermes, the Dutch subsidiary of Veolia Transdev. The objection was based on Veolia’s involvement in what Al-Haq claims are Israel’s violations of international law. In a 2012 interview with the Israeli press, Veolia's Denis Gasquet, senior executive vice president, admitted that Veolia had been under pressure from pro-Palestinian groups in Europe, particularly over the Jerusalem Light Rail. Parties within Veolia had argued that the group was losing tenders as a result, but Gasquest said he did not know of any tenders lost due to Veolia's activities in Israel. He confirmed Veolia's intention to stay in Israel, while exiting the transport business.

Research and development

As of December 31, 2009, the Group’s research and development investments reached €89.8 million (€92.1 million in 2008, €84.6 million in 2007).[citation needed] The Research and Innovation division includes 850 experts and supports around 200 scientific partnerships with private and public organisations. The division focuses on four main issues:

Manage and preserve natural resources Control impacts on natural environments Care for health and living environments Develop alternative sources of energy

Programmes Veolia Environnement’s R&I division has determined 9 main development programmes through which a number of research projects are managed: Waste collection, sorting, and beneficial re-use Sustainable city and building management Energy efficiency Transport Environmental and health standards New activities Bioresources Drinking water Waste water

Veolia Innovation Accelerator

To boost and accelerate the innovation process, Veolia Environnement has established the Veolia Innovation Accelerator initiative.[44] This is a programme for the identification and support of the best technologies (also called “cleantechs”) within the most innovative start-up companies in the industry.

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