Sustainability Faceoff: Verizon vs. Sprint

verizon vs. sprint faceoff

There are some practical concerns in the battle between Sprint and Verizon—phone selection, for example, makes a big difference. But there are also a number of sustainability concerns to take into account, as explained in The HIP Investor, by R. Paul Herman.

Sprint has received significantly more attention for its sustainability initiatives, mostly because they have been flashier. The Samsung Reclaim, for example, was Sprint's first "green" phone, featuring recycled plastic, soy-based ink in its user manual, and a box made out of recycled paper. A successor to the Reclaim, dubbed the Restore, will be released this summer. But green phones like the Reclaim and the Restore are little more than gimmicks until they become more desirable than heavy hitters like the Droid and iPhone.

Sprint does make it easy for customers to recycle, however, with prepaid envelopes available at all stores for customers to send back phones, batteries, and accessories. By 2017, Sprint hopes to achieve a wireless device collection rate of 90% as compared to device sales. The company also was ranked highest in corporate environmental and sustainability reporting among U.S. telecom carriers in a 2009 report from the Roberts Environmental Center. In an interview with Herman, Sprint VP of Corporate Responsibility Ralph Reid explained, "We want to dispel the myth that sustainability increases cost. A lot of what we have done has not increased our cost, as a matter of fact it reduced it."

Verizon has done just as much as Sprint to green its business practices. The company is adding 1,600 alternative energy vehicles to its fleet in 2010, cut CO2 emissions by more than 793 million pounds in 2009, and became the first telecom company to establish efficiency standards in 2008. Verizon is also working on sustainability requirements for its suppliers. And that's just the tip of the iceberg, according to Jim Gowen, Chief Sustainability Officer and VP of Operations. "We say do what you say 100% and only talk about 10%. We are doing so much more than what I am sharing right now, so that our story can be out there and be respected," he explained in an interview with Herman.

It's hard to say who wins in the battle of the cell phone carriers, but we have to side with Verizon—if for no other reason than that the company can make a bigger impact since it has more than twice as many customers as Sprint.

Check out the full HIP Investor chart below.


 
Verizon   Sprint  
Overview Wireless network serves 87.7 million customers; $97.4 billion revenue (2008), 235,000 employees   40 million customers, $35.6 billion revenue (2008), 56,000 employees  
Product Through HopeLine, collects, refurbishes, and reuses cell phones to provide free phones and services to domestic violence victims; collected more than 1 million cell phones in 2008, up 6% from 2007
  The Samsung Reclaim is Sprint's first eco-friendly phone designed with 80% recyclable components and 100% recyclable packaging  
Management
Practices
21 of 25: Corporate Responsibility Council establishes benchmarks and goals, assigns and enforces accountability, and measures and tracks results
  11 of 25:  Committed to balancing needs of customers and needs of communities in decisions for tower siting (some poles disguised as flag poles, light poles, pine or palm trees)
 
Health

of 20%

Customer satisfaction is 70%; Verizon spent $3.7B in health care benefits, covering 835K employees, retirees and their dependents  8%  Customer satisfaction is 56%  5%
Wealth

of 20%

CEO's salary is 391 times that of the average employee; long-term incentive plan is available to all employees, awarding stock-based compensation
13% CEO's salary is 276 times that of the average employee; Employee Stock Purchase Plan available for "eligible" employees
14%
Earth

of 20%

Collected over 1.1 million recycled and refurbished phones in 2008
7% 20th largest purchaser of green power via EPA's green power partnership for Fortune 500 challenge
9%
Equality

of 20%

Of 13 directors, 2 are female and 4 are ethnic minorities (2010)*; 36 percent of Verizon's employees are minorities (2008)
13% Of 10 directors, 1 is female 7%
Trust

of 20%

Spent $18 million on lobbying activity, but overall reported transparency is high and detailed, comprehensive and quantitative; nearly 7 times more lobbying spend, while only 3 times higher revenue
10% "Only" $2.6 million spent on lobbying activity in 2008 but several class action lawsuits for fees and reporting is not sufficiently quantitative
8%
Human Impact

of 100%

TOTAL 51%
TOTAL 44%
Corporate Profit

of 20%

+13.9% return on equity (2008)

+2.3% annualized total return, including reinvested dividends (6/2004-6/2009)

+3.3% annualized total return, including reinvested dividends (6/2006-6/2009)
  -13.4% return on equity (2008)

-20.8% annualized total return, including reinvested dividends (6/2004-6/2009)

-37.6% annualized total return, including reinvested dividends (6/2006-6/2009)

 

 

*This information is updated from the book.

Read more Sustainability Faceoffs.


HIP InvestorTable excerpted from The HIP Investor: Make Bigger Profits by Building a Better World by R. Paul Herman Copyright (c) Published by John Wiley & Sons. Used with permission.

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