On Climate, Corporations Need to Grow a Soul

Published July 8, 2016

2016-07-08 10:17:23

Can you imagine the big banks saying: “Hey, Obama! Break us up! We need regulation!” Of course not. That’s because corporations almost never take positions that threaten their short-term self-interest. Can you imagine a mainstream corporation leading the charge on, say, marriage equality twenty years ago? Nope. (Richard Socarides, a staffer in the Clinton White House, has written about how hard it was to get business leaders even to talk about the issue then.)

Businesses hate controversy: leadership just wants to keep their heads down and pump out widgets. “Shut up and ski,” is what many tell the ski resort I work for when we delve into climate or social issues. Even recent activism by many firms in support of LGBT and transgender rights—which has been hugely effective—proves the point. Those actions weren’t risky; rather, like taking a strong position on civil rights in the late seventies, they boarded a train that was leaving the station.

This innate cautiousness is a problem in a climate changed world. When respected organizations like NOAA report that we might see sea level rise of up to 9 feet by 2050-2060, we’ve got a crisis that’s going to require rapid government response. How do you get there when even citizens who consider themselves “alarmed” about global warming take few public actions to drive change, as a new study in the Journal Nature Climate Change reports?

Two studies inform the question. Recent analysis by business school professors Michel Toffel and Aaron Chatterjee showed the strong influence CEO activism has on public views. If, for example, Tim Cook, the CEO of Apple, is reported to oppose a law, that fact increased the number of people who would themselves oppose the law. Second, a 2014 study of 20 years of public opinion data by two political scientists—Martin Gilens and Benjamin Page—showed that business leaders have far more influence on politicians than common citizens.

In short: in this post-Citizen’s United world, voter opinions are both influenced by, and trumped by the corporate elite; and most people aren’t taking public action on climate anyway. Business voice matters, big time.

That means to stave off nine feet of coastal flooding, we’re going to need corporations to help. And to make a difference, they’re going to have to take strong political positions that go against their short term self-interest. This type of action—particularly the use of their powerful voice—runs counter to the standard business approach to climate: keep your head down and cut your carbon footprint. The problem is that cutting carbon a little bit at one corporation doesn’t solve climate change. And worse, it’s an overt dodge of the harder, more controversial work of using voice and influence to drive change. But it’s very effective, placating customers, shareholders and employees while freeing business of the need to take meaningful, but riskier, action.

Solving climate change by taking actions that don’t solve climate change is a bad place to be. To drive real change, a corporation might have to go beyond , say, supporting a carbon tax in the abstract, which many businesses have already done, but instead demand a large carbon tax, which might hurt the short term bottom line; call out climate denying elected officials; or publicly endorse candidates based on their climate position.

Getting corporations to do any of these things is a big lift. It goes against their Buddha-nature. They move only when then need to, driven by profit. Compare soda manufacturer’s nonexistent lobbying response on climate to their well-organized, rapid and well-funded reaction to proposed “obsesity” taxes on sugary drinks in multiple states, as documented in Marion Nestle’s new book Soda Politics: Taking on Big Soda (and Winning.)

Not surprisingly, corporations are not bringing out similar knives on climate. Of course they haven’t. Why would we expect these fundamentally amoral entities to behave ethically? Senator Sheldon Whitehouse wrote in Harvard Business Review that “Despite the statements emitted from oil companies’ executive suites about taking climate change seriously and supporting a price on carbon, their lobbying presence in Congress is 100% opposed to any action.” He also notes that “while Coke and Pepsi have been vocal behind the scenes on the need for climate action, here in Congress their lobbying agencies don’t support their position.” True, before the Paris climate conference, 365 corporations backed the EPA Clean Power plan, Obama’s signature climate rule. But that’s not altogether risky, given that the law, under the Clean Air Act, requires such a plan.

We’re at a singular time in history. Solutions to the climate crisis, the greatest challenge facing humanity today, are advancing rapidly. Coal is in free fall; the cost of solar and wind energy is plummeting, along with the cost of batteries. In 100 years, we’ll have solved the problem. But we don’t have 100 years, and so we need to accelerate the process with a policy boost. In a short timeframe, only business voice and lobbying power can make this happen. And so for the first time in history, humans need corporations, their intentionally sociopathic Frankenstein’s monster, to grow a soul.

Auden Schendler is an American climate activist, businessman, and the author of Getting Green Done.

Comments

2 responses to “On Climate, Corporations Need to Grow a Soul”

  1. Tom Lyon says:

    This piece makes a great point. It is time that we demand more out of CSR, and expand it to include corporate political action as well, which is more important than changing the lightbulbs at the office. Transparency around lobbying, including not just dollars spent but also messages delivered, would be a good next step.

  2. Dror Etzion says:

    Thanks Auden. This got me to ponder: Should corporations have a soul or should CEOs? The research you highlight seems to indicate that it is CEOs who speak out that matter for public opinion, more than corporate policies. And it’s hard to make a dent in the robust legal infrastructure – highlighted in “the Corporation and elsewhere – that makes corporations soul-less. We always anthropomorphize organizations, but in this context I am not sure how useful it is. Maybe we need CEOs to recognize their humanity, rather than endeavor to make corporations human-like.

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