Is corporate climate action a good thing?

World lead­ers should be prepar­ing about now to head to Glas­gow for the Unit­ed Nations annu­al cli­mate sum­mit. But with the event pushed back a year amid the coro­n­avirus pan­dem­ic, their atten­tion lies else­where.

Regard­less, two facts remain unchanged. First, cli­mate change is not going away. Glob­al tem­per­a­tures could reach cat­a­stroph­ic lev­els if emis­sions are not cut annu­al­ly by 7.6 per cent up to 2030, the UN warns. Come next year, the warn­ing will still stand.

Sec­ond, when gov­ern­ment lead­ers do even­tu­al­ly meet in Glas­gow, expect busi­ness lead­ers to be out in force. Once the pre­serve of pol­i­cy­mak­ers and cam­paign­ers, high-pro­file cli­mate activists now include sharp-suit­ed exec­u­tives. So why the shift? And what exact­ly are com­pa­nies hop­ing to gain from hob­nob­bing on cli­mate pol­i­cy?

Taking a bold, public stance on climate change

Part of it, of course, is being seen to act. Busi­ness­es are under pres­sure on all sides, from con­sumers at the till, recruits dur­ing inter­views, investors at their annu­al meet­ings and so on, to show their com­mit­ment to cli­mate action.

Accord­ing to new research from Ipsos MORI, for exam­ple, sev­en in ten (68 per cent) UK adults now expect busi­ness lead­ers to speak out on polit­i­cal issues such as cli­mate change.

Glob­al cli­mate sum­mits pro­vide an ide­al stage for such a demon­stra­tion. Take this year’s New York Cli­mate Week. The online event sparked a del­uge of cor­po­rate announce­ments, from Walmart’s goal of net-zero emis­sions through to PepsiCo’s pledge to switch to 100 per cent renew­able ener­gy.

Eye-catch­ing as these head­line splash­es are, they hide a sub­tler and arguably more sub­stan­tial cor­po­rate con­tri­bu­tion to cli­mate action of encour­ag­ing pol­i­cy­mak­ers to think ambi­tious­ly and act bold­ly.

If that sounds coun­ter­in­tu­itive, then no sur­prise. Inter­na­tion­al busi­ness asso­ci­a­tions, espe­cial­ly those bankrolled by the fos­sil fuel indus­try, stand as a watch­word in cli­mate cir­cles for obfus­ca­tion and delay.

Pow­er­ful as these lob­by groups cer­tain­ly are, how­ev­er, their voice is not uni­ver­sal. Oppos­ing busi­ness voic­es that favour more aggres­sive cli­mate action not only exist, but they are also increas­ing­ly impa­tient to be heard.  

A recent case in point is the open let­ter sent by 185 chief exec­u­tives to Euro­pean gov­ern­ment lead­ers express­ing their sup­port for the Euro­pean Union’s Green Deal recov­ery pack­age.

The let­ter, which includes the likes of Unilever, EDF, Google and IKEA among its sig­na­to­ries, explic­it­ly encour­ages Euro­pean leg­is­la­tors to set tougher EU cli­mate norms, such as increas­ing its 2030 emis­sions reduc­tion tar­get from 45 to 55 per cent.

Climate action needs all businesses to get involved

Why? Part­ly for rea­sons of com­pet­i­tive advan­tage. Com­pa­nies that have invest­ed in ener­gy-sav­ing tech­nolo­gies, clean pow­er and oth­er emis­sion-reduc­tion mea­sures want the lag­gards in their indus­try to fol­low suit.

As impor­tant­ly, if not more, how­ev­er, is the fact that cli­mate change is a pro­found­ly sys­temic prob­lem. A real estate oper­a­tor can become 100 per cent car­bon neu­tral, but it won’t stop sea lev­els ris­ing and wash­ing away its coast­line con­dos.

Sys­temic prob­lems can only be solved through sys­temic solu­tions, says Karl Vel­la, inter­na­tion­al cli­mate pol­i­cy man­ag­er at the World Busi­ness Coun­cil for Sus­tain­able Devel­op­ment. 

“For that rea­son, we’re not see­ing lead­ing com­pa­nies talk about their busi­ness or sec­tor in iso­la­tion, but instead they focus their advo­ca­cy on the con­text of their indus­try in wider sys­tems,” he says.    

Embracing the rise of corporate lobbying

For com­pa­nies gen­uine­ly com­mit­ted to cli­mate action, pro­gres­sive advo­ca­cy rep­re­sents the log­i­cal next step once they have exhaust­ed all pos­si­bil­i­ties for emis­sions reduc­tion with­in their imme­di­ate oper­a­tions.

Mike Peirce, cor­po­rate part­ner­ships direc­tor at The Cli­mate Group, a net­work of com­pa­nies com­mit­ted to cli­mate action, gives the exam­ple of the UK Elec­tric Fleets Coali­tion. Found­ed in con­junc­tion with tele­coms com­pa­ny BT Group, the ini­tia­tive seeks to work with the gov­ern­ment to cre­ate a pol­i­cy envi­ron­ment con­ducive to 100 per cent elec­tric vehi­cle sales by 2030.

“To decar­bonise the trans­port sec­tor, we need more elec­tric vehi­cles on the road, which requires a push from gov­ern­ment as well as indi­vid­ual busi­ness­es,” says Peirce.

The coalition’s approach is what might be described as “lob­by­ing light”. BT and its fel­low fleet oper­a­tors hope that by green­ing their own fleets, pol­i­cy­mak­ers will see the sig­nal from the mar­ket and be encour­aged to act; what is often referred as an “ambi­tion loop”.

In oth­er cas­es, cor­po­rate advo­ca­cy is more on the nose. In May, for exam­ple, the non-prof­it envi­ron­men­tal group Ceres mobilised more than 300 US cor­po­ra­tions to call on law­mak­ers to intro­duce a manda­to­ry car­bon price for busi­ness.

Such uni­lat­er­al mea­sures help cre­ate a lev­el play­ing field, par­tic­i­pat­ing com­pa­nies argue, as well as pro­vid­ing some clar­i­ty of pol­i­cy that in turn gives busi­ness the con­fi­dence to invest in long-term cli­mate solu­tions.

Companies need to practise how they preach

Giv­en the che­quered his­to­ry of cor­po­rate envi­ron­men­tal lob­by­ing, eye­brows might right­ly be raised at the idea of busi­ness­es influ­enc­ing future cli­mate pol­i­cy, how­ev­er pro­gres­sive their alleged motives.

As a basic min­i­mum, com­pa­nies engaged in such advo­ca­cy need to ensure their own poli­cies and prac­tices line up with their pub­lic posi­tion­ing.

Noth­ing is more like­ly to engen­der dis­trust among pol­i­cy­mak­ers and the pub­lic than a dis­so­nance between words and action, warns Jen Austin, pol­i­cy direc­tor for a UN-backed team of cli­mate action cham­pi­ons linked to next year’s Glas­gow sum­mit.

“It’s imper­a­tive that com­pa­nies’ inter­nal cli­mate tar­gets and ambi­tions are con­sis­tent with what they are say­ing in pub­lic or behind closed doors to pol­i­cy­mak­ers,” she says.

The injunc­tion extends to cor­po­rate links to indus­try asso­ci­a­tions. The advice from We Mean Busi­ness, a coali­tion pro­mot­ing cli­mate action, is for com­pa­nies to first work with like-mind­ed mem­bers to engage the lob­by groups to which they belong.

If that doesn’t work and pol­i­cy anom­alies still per­sist, then pro-cli­mate firms should seri­ous­ly con­sid­er joint­ly renounc­ing their mem­ber­ship and leav­ing as one, says the organisation’s chief exec­u­tive María Mendiluce.

The arrival of a pro­gres­sive busi­ness voice marks a wel­come coun­ter­bal­ance to the per­sis­tent lob­by­ing of cor­po­rate naysay­ers. The more who fol­low their lead, the loud­er their voice will become and, hope­ful­ly, the bold­er cli­mate pol­i­cy will be.

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