Are corporations really doing what’s necessary to fight climate change?
How to make sure big business does the right thing
Fighting climate change has become the must-have accessory for a large number of major corporations. Approximately 20 percent of the planet’s 2,000 biggest publicly traded companies have made pledges to produce “net zero” carbon emissions. That includes well-known brands from Apple and Ford to BP and Shell.
In the best of all possible worlds, this means that these corporations will do everything in their power to limit their emissions as much as possible and, to the extent they cannot, they will back efforts elsewhere to prevent emissions or to pull carbon out of the air to offset what’s left of their carbon usage.
While we should rejoice that, in many boardrooms, the profit motive doesn’t seem to trump survival, there are reasons to be skeptical of these pledges.
Eighty percent of major corporate titans have yet to lean in on this issue, including investing guru Warren Buffett. Recently, at his company Berkshire Hathaway’s annual stockholder meeting, the billionaire offered full-throated praise for the oil giant Chevron.
“Chevron is not an evil company in the least and I have no compunction about owning Chevron,” he said. “If we owned the entire business, would not feel uncomfortable about being in that business.”
Buffett also said that too much of an emphasis on corporate sustainability was “nuts.”
While most executives wouldn’t dare to take such a strident public position, even those who are publicly expressing concern about climate change may not really be doing as much as they claim. You see, “net zero” is a nebulous concept that leaves a lot of room for interpretation — and, as such, misrepresentation. As one academic article pointed out in March: “a multinational mining company might count emissions from extracting and processing ore but not the emissions produced from transporting it.” In other words, companies may say a lot, while actually continuing bad behavior and “greenwashing” it for the public.
Even if these companies do reach “net zero” goals, there is no promise that we will be able to limit carbon emissions completely. After all, if these businesses plan to still burn fossil fuels and live by shaky definitions, we are unlikely to eliminate enough carbon emissions to avert the worst consequences of global warming.
All this might make some feel helpless. But there are ways to keep Goliath companies both accountable on climate change and other pressing environmental issues.
Consumers can come together and pressure companies to do the right thing. For example, the advocacy groups Environment America Research & Policy Center, U.S. PIRG and the Student PIRGs sent a petition to Whole Foods with 59,000 signatures from both regular consumers and lawmakers from more than 40 states, asking the supermarket chain to phase out single-use plastics from its stores.
While the company has built a reputation as an environmentally conscious business, it received a failing grade from the nonprofit watchdog group As You Sow for its use of plastics. With plastics not only choking our waterways but also adversely affecting the climate (plastics are not only a byproduct of fossil fuels, but also require intensive carbon emissions to produce) this form of corporate pressure is necessary.
However, while this type of advocacy can be very effective, direct shareholder action can be particularly powerful when it comes to changing executives’ minds. Enter companies such as Green Century Capital Management. The fossil-free mutual fund identifies companies ripe for reform and uses its stock position in these publicly held brands to press for meaningful environmental change.
Over the past year, Green Century has shown how powerful this strategy can be. Some of the funds’ wins through shareholder proposals have included: getting Coca-Cola to reduce its use of virgin plastics; successfully pressing JP Morgan Chase to expand its deforestation policies; and convincing Target to set plastic elimination goals. (On deck for May 26: A shareholder vote on a resolution to get Whole Foods and its parent company Amazon to improve its plastic policies.)
Even when top executives don’t want this type of change, shareholder proposals can force corporate bigwigs to act. For instance, in October, Procter & Gamble’s shareholders voted overwhelmingly to support a Green Century resolution calling for the company to eliminate deforestation and forest degradation in its supply chain. This happened despite the fact that P&G’s leaders called for its shareholders to reject the proposal.
The reality is that many corporations are unlikely to put societal responsibility over profits without a push. So we should be pleased with pledges, but we must also press with all the tools we have to make sure that, in the end, these businesses do the right thing for our planet.
