Corporate climate action is one of the most hopeful stories of 2017 and many say there is reason to believe that it may prove to be an even bigger story in 2018. Hundreds of US corporations are slashing their emissions and adopting increasingly robust sustainability programs. A wide range of companies and organizations have committed billions to combat climate change. All across the US companies are crafting mitigation strategies and increasingly considering their adaptation needs. We are witnessing the broadest US corporate climate consensus that we have ever seen. It goes well beyond the Climate Action Partnership that was formed in 2007.
Corporate America, including some of the world’s most well-known brands, are increasingly united in their resistance to Trump’s climate denial. Many businesses have made it publically known that they support sustainability and oppose Trump. The reaction from the business community after the Paris Climate agreement was signed was resoundingly positive with more than 700 companies expressing their support. Even though Trump subsequently abandoned the Paris deal many US companies continue to support it.
Corporate America supported the Paris deal in part because they know that climate action is good business. A large number of studies corroborate the finding that sustainability offers good ROI. Corporations are already reaping the benefits of adopting science-based climate strategies. There is also strong evidence proving that corporate emissions reductions are compatible with growth.
Climate action is important for consumer-focused corporations because they gain reputational benefits. They also don’t want to alienate the people they serve by failing to act. However, there are wider geopolitical issues at play as many corporate leaders in the US are concerned that the irrational climate position of the Trump administration will adversely impact their global operations. This has led many to conclude that Trump is a corporate risk factor.
Managing risks, particularly those associated with climate change is a corporate imperative. This view was expressed in an article by Michele Villa, Director, and Global Practices Leader at DuPont Sustainable Solutions. Villa acknowledges that companies see the value of reducing GHGs because of cost savings and reputational benefits, however, he points out that more attention needs to be given to adaptation risks. This may in part be due to the failure to consider longer-term time horizons.
“Like it or not, climate change is emerging as a risk that corporate leaders would be wise to take seriously. As we have seen, policies relating to climate change are not necessarily fixed in stone and can vary as politicians come and go, which makes it even more important for companies to assess and re-evaluate their response to these policies” Villa said. “Those organizations that make climate change risk management a priority will be more resilient and better able to withstand its effects.”
It must be pointed out that corporate climate action is not new in the US. IBM set its GHG reduction goal in 1998 and Johnson & Johnson did the same in 2000. Now more than half of America’s Fortune 500 companies have set climate-related goals. Many of these companies have adopted science-based renewable energy and emissions reduction targets. Some of these companies including Apple, Facebook, and General Motors, have pledged to go 100 percent renewable.
Walmart has embraced both renewable energy and science-based emissions reduction targets. The retail behemoth is leveraging its size to encourage one gigaton of GHG emissions reductions throughout their supply chain.
Corporations are also investing in innovations that can help us to address the climate crisis. In 2017 Microsoft said they will spend $50 million on artificial intelligence technology geared towards climate action. Brad Smith, president of Microsoft, told the Guardian the investment would spur clean energy technologies that reduce GHG emissions. Smith illustrated Microsoft’s AI efforts by pointing to applications in more energy efficient buildings and increased agricultural yields. US companies are showing innovative leadership in a number of other areas including water stewardship.
The first wave of corporate climate actions pursued the financial benefits of energy efficiency and renewables. In recent years it has become apparent that renewable energy is both cheaper and subject to less price volatility than fossil fuels. Investments in renewables are now eclipsing fossil fuels. Now that the die is cast corporations are coming to terms with the new energy order as fossil fuels recede and renewables rise. Bill Gates appreciates the need to expedite the transition. As the head of the Breakthrough Energy Coalition Gates has prioritized the pressing need to find clean energy innovations.
In addition to the need for a more stable climate, interest in climate action is being driven by economic opportunities (eg companies see the powerful economic benefits of preventing disruptions to their supply chains). Corporate climate action is also being driven by a growing chorus of investors who are concerned about the risks associated with the climate crisis.
Some have argued that corporations have laid the foundation for climate action through their science-based climte committments.
“We’ve got hundreds of CEOs and hundreds of the world’s biggest businesses fully committed to acting on climate, both the risks and opportunities,” said Nigel Topping, head of the We Mean Business climate coalition in 2015. “They’re working in a context where their competitors are all going in the same direction because of Paris and local regulations. I think largely the course has been set by major businesses.”
According to a report from Corporate Accountability International, the president decided to abandon the Paris Accord and eviscerate US climate action because the fossil fuel lobby has allies in the Trump White House. The power that the fossil fuel lobby wields is antithetical to the facts. A large number of cost-benefit analyses conclude that although there are costs associated with climate action, they are far outweighed by the benefits.
Jonathan Pershing, Environment Program Director at the Hewlett Foundation and former US Special Envoy for Climate Change says we have the know-how all we need is the will. “There’s no doubt that the world has the technology and the ability to solve this problem” Pershing said. Without naming the Trump administration by name he went on to say that we need more, “commitment and resolve.”
Trump, like the party he leads has nothing but disdain for science. Conversely, companies and the philanthropic organizations that they have spawned pay heed to science. These organizations are stepping up to fill the void left by the current administration.
At the end of last year on the day before the One Planet Summit, the nonpartisan Hewlett charitable Foundation announced it will donate $600 million to non-profits over five years to combat climate change around the world. They are specifically focusing on the core of the climate problem, namely supporting the transition from fossil fuels to clean energy.
“Huge numbers of people are already suffering from climate change from unprecedented flooding, superstorms, drought, famine, wildfires, and pest-borne disease – and this is just a fraction of what our children and grandchildren will suffer if we don’t get this under control,” said Hewlett Foundation President Larry Kramer. “The world has made incredible progress in recent years, in ways that both mitigate warming and generate new economic opportunities. But we still have a long way to go. The William and Flora Hewlett Foundation is proud to increase its commitment to creating a clean energy system, and we urge all leaders – whether in philanthropy, business, or government – to step up to this challenge and increase their own commitments to solving climate change. Everyone must find their role in the solution—our future depends on it.”
The Hewlett Foundation will work with the nations that have some of the biggest carbon footprints. They will provide funding to organizations that conduct scientific research, engage in advocacy, promote public-private partnerships, encourage investment and assist policymakers. They will also help experts to share their best-practice expertise.
In addition to unprecedented climate action we are seeing evidence that US corporations are coming to the aid of people in need. To illustrate the point, a Triple Pundit article by Jan Lee reported on a story in which companies have shown “overwhelming” support for a program to help disadvantaged children in California.
Contrary to what Trump would have you believe, sustainability is a boon and not a liability. It is essential that business leaders get this message. Until the Trump administration is either impeached or voted out of office, corporations are the last best hope for climate action in the US.
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