Big Business Responds to Climate Change

Earlier this week, Mr. Trump did what seemed inevitable. He pulled out of the Paris Climate Agreement. He claimed that he was more concerned with people in Pittsburgh than Paris and was doing this to support U.S. businesses, especially small businesses. Within a day, however, big business leaders across the country–led by millionaire and former New York City mayor Michael Bloomberg–were claiming that whether or not the President was on side, big businesses have the power to meet and even exceed commitments made by the former U.S. President.  This raises the question: What is at stake when businesses rather than governments take the lead on political issues?

Surprising Allies Support the Climate Agreement

Among the companies who have already expressed support for the Paris Climate Agreement are at least a few surprises. The Dow Chemical Company, Pacific Gas & Electric, Procter & Gamble Company, and Coca Cola Company do not necessary evoke tree hugger vibes, but their CEOs have all gone on record supporting the Paris Climate Agreement. Eighty-two presidents and chancellors of universities including Emory & Henry College, Brandeis and Wesleyan have also lent their support. Other key players include the mayors of dozens of U.S. cities from New York to Salt Lake.

As Andrew Winston emphasized in an editorial published in the Harvard Business Review earlier this week, “It’s not a list of usual suspects from consumer-facing brands that may want to impress consumers or seem like they don’t have a huge carbon footprint. Nor is it a list that makes you think the money men want out of Paris. Heavy industrials are here. The biggest banks are here.” So why are they signing on?

Building a Coalition

While these allies may sound surprising, for months now, Michael Bloomberg has been building a coalition of business leaders, mayors, and university presidents in anticipation of Mr. Trump’s pullout from the Paris Climate Agreement. In late March 2017, Bloomberg published an editorial in the New York Times in which he stated:

No matter what roadblocks the White House and Congress throw up, the United States can — and I’m confident, will — meet the commitment it made in Paris in 2015 to reduce greenhouse gas emissions that are warming the planet. Let me explain why, and why correcting the false perception is so important. Those who believe that the Trump administration will end American leadership on climate change are making the same mistake as those who believe that it will put coal miners back to work: overestimating Washington’s ability to influence energy markets, and underestimating the role that cities, states, businesses and consumers are playing in driving down emissions on their own.

What’s at Stake for U.S. Organizations

On the one hand, the rush to reject Mr. Trump’s rejection of the Paris Climate Agreement may appear to be yet another broad protest against the current administration, but in fact, much more is at stake. By remaining committed to the accord, both businesses and the environment have much to gain. On the environmental side, the benefits are obvious. The agreement promises to lower harmful emissions with the goal of preventing temperatures from rising 2 degrees on average worldwide and in the process driving devastating environmental changes, including massive flooding of coastal communities. On the business side, however, there are also many benefits.

By continuing to support the Paris Climate Agreement, U.S. businesses are potentially warding off what could be massive boycotts of U.S. products and billions of dollars worth of collapsed business deals. The reality is that with only Nicaragua and Syria refusing to sign the historic Paris Climate Agreement, the United States is now a lone wolf among essentially all nations in the world on climate change. The bottom line is that no U.S. businesses can actually afford to not support the Paris Climate Agreement. But can U.S. businesses–with the help of mayors the the presidents of large organizations, including many U.S. universities–actually meet and exceed the climate change promises made by the former President? While this is yet to be seen, one thing is certain: As the climate change debate continues, corporate social responsibility is about to be put to the test.

 

June 3, 2017   Updated :June 3, 2017      

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