Green Business Leads People and Politicians
As 40 years of Earth Days pass, it's interesting to note that it is the business community that has taken up the cause of climate change more than any other.
Politicians have, from the lack of consensus at the recent Copenhagen meeting to failed legislation in Congress, let the issue of climate change wane. Individuals, according to most polls and surveys, are beginning to care less and less about global warming.
Not so, however, with big business. From Wal-Mart Stores Inc. /quotes/comstock/13*!wmt/quotes/nls/wmt (WMT 53.50, -0.13, -0.24%) to Proctor & Gamble Co. /quotes/comstock/13*!pg/quotes/nls/pg (PG 63.30, +0.31, +0.49%) to Ford Motor Co. /quotes/comstock/13*!f/quotes/nls/f (F 14.79, -0.02, -0.14%) and numerous other large corporations in different sectors around the world, environmentally friendly products are being touted, nay celebrated. The advertising messaging is clear: Care for the planet.
This business trend seemingly flies in the face of societal norms where the role of government is supposed to look after citizens and citizens are supposed to be self-interested. Meanwhile, the historical role of business has been largely to exploit.
What is going on? Why the inverse relationship to a cause that couldn't be more alarming and appropriate for government and civil action?
Joel Makower, executive editor of GreenBiz.com and author of Strategies for the Green Economy, observes, "For years, companies have been leading the public and the politicians on climate, but they're not undertaking these measures to 'save the earth.' They're doing these things in part to get ahead of regulations, but in large part because greenhouse gas emissions are a proxy for inefficient operations. So, companies are measuring and managing their climate impacts to save money, reduce risk and liability, improve quality, and delight employees -- and maybe win a few reputational points. That is to say, they're doing these things for all the right reasons."
Businesses doing something for the right reasons? That's a shift, and one that should be welcomed, especially in light of the recent Wall Street shenanigans.
To be sure it takes a dire threat like global warming for businesses to begin to manage risk properly. Still, the threat is being taken seriously, and in symbiotic ways, too.
Institutional investors are pressuring corporations to mend their ways and fend off climate change risk, or else face the prospect of financial punishment -- disinvestments.
Ceres, a Boston-based coalition of businesses, investors, and environmental groups, has petitioned the Securities and Exchange Commission to mandate corporate disclosure of climate change risk in filings.
"Companies cannot afford to diddle-daddle on climate change as some politicians do. The physical impacts of climate change are already upon us and policies are being enacted around the world to deal with it -- that's what companies are, and must, respond to. They see it first hand, whether it's Starbucks Corp.'s /quotes/comstock/15*!sbux/quotes/nls/sbux (SBUX 35.97, +0.16, +0.45%) coffee coming from ever-drier regions of Africa or General Electric Co. /quotes/comstock/13*!ge/quotes/nls/ge (GE 20.00, +0.06, +0.30%) experiencing skyrocketing demand for eco-friendly products like wind turbines and energy-efficient train engines," said Ceres President Mindy Lubber. Her point is that all of these things related to climate change matter to investors.
Dov Seidman, author of " HOW " and CEO of LRN , a company that helps businesses develop ethical corporate cultures and inspire principled performance and which recently acquired leading green strategy firm GreenOrder, notes that business self-governing is nothing new.
"The Defense Industry Initiative, and more recently, the actions of consumer goods companies offering healthier fare come to mind," he says. "What is new today is the increasing recognition that we live in a more connected world, and living in a more connected world requires a mindset shift to recognize that we are morally interdependent. Enlightened businesses are connecting to a deeper purpose, reconnecting to their fundamental role in society and acting in ways that reflect those beliefs."
Indeed, with the recent Supreme Court ruling granting corporations rights more akin to people, companies are beginning to act more like...people.
For years Earth Day activists have put the blame for the systematic demise of the planet on business and industry. No more; that blame must be spread.
People and politicians should take a page out of the business sector's climate change playbook and begin to take actions themselves.