After the failure to generate binding obligations by countries in previous global climate summits such as Copenhagen in 2009 and Cancun in 2010, the goalposts have been moved backwards. Now, the focus is only to outline the terms for an eventual commitment from which subsequent improvements can later be made. This retrenched approach is radically bleak, especially in light of recent signs that even the well-known two degrees Celsius goal may be insufficient to avoid devastating levels of social disruption and economic catastrophe.
Despite this dreary momentum, for the first time in years we have reason to believe that such a commitment in Paris is possible. The world’s three major emitters – the United States, China, and the European Union – each recently made their own individual, independent commitments to reducing (or capping, in the case of China) emissions. This, taken together with economic realities like the falling price of renewable energy (solar energy recently surpassed the 1 percent threshold of global energy supply as China becomes its fastest-growing source of demand) enables us to truly believe that Paris offers a real opportunity to break the existing cycle and create a meaningful global agreement.
“Our inability to break out of our 20th century dependence on oil and coal is not due to the economic guidance of the invisible hand – it is a political failure.”
Here in the United States, President Obama’s recent Clean Power Plan is a vital first step in getting beyond the failed legacies of previous summits. The Obama administration signaled to the rest of the world’s leaders that the US aims to reduce its carbon emissions by 32 percent by 2030, from 2005 levels. Deeper still, the administration is using innovative legal maneuvers like the plan’s Clean Energy Incentive Program to encourage states to meet targets earlier than 2030.
And other countries have noticed.UN Secretary-General Ban Ki-moon immediately greeted the Clean Power Plan as essential for bringing other key countries on board and securing a universal, durable, and meaningful agreement in Paris in December. President Francois Hollande of France similarly labeled it a major contribution to success in Paris. More significant, as part of the lead-up to the release of the Clean Power Plan, the US saw China make specific public targets on carbon emissions goals – including an offer to ensure 20 percent of its energy would come from renewable sources by the 2030 deadline and that during this time it would drop its carbon intensity by 60 to 65 percent.
Predictably, this significant political and diplomatic step in the US immediately came under fierce attack from opponents of sensible climate policy. Over a year before the president announced this plan, political strategists in the US Chamber of Commerce began preparing the “industry’s” strategy to undercut any new planet-saving regulations Obama might be able to muster. This damning auto-reaction from the Chamber and many similarly minded powerful circles at both national and state government levels is worrying not only due to the outsized role of US emissions in climate change, but also due to the impact American political wavering on its commitments will signal before Paris.
This possible political backslide is worrying because previous attempts at global action were hampered by a lack of US leadership. Rather than playing its preferred role of global leader, the United States has been one of the key obstacles to a truly sustainable future. The US has proven unable or unwilling to make true concessions at the global summits despite our place at or near the top of carbon emissions by any measure. While other major countries certainly share blame for our current lack of a global agreement – often out of a concern for their own need for economic growth – Americans must recognize in time for the Paris negotiations that having roughly five percent of the world’s population while consuming roughly 25 percent of the world’s fossil fuels is not a sustainable vision for the 21st century.
Our inability to break out of our 20th century dependence on oil and coal is not due to the economic guidance of the invisible hand – it is a political failure. And unfortunately, a major cause of our poor political prioritization of sensible climate policy has been the contradictory at best, and abhorrent at worst, activities of important American business lobby operations in Washington, DC. Rather than rely on scientific consensus, the US Chamber of Commerce and other major industry groups like the National Association of Manufacturers have chosen the wrong side of a crucial moment in history.
Despite the statements of these large industry associations, do not be fooled into believing that carbon is as critical to the economy and American jobs as they would have us believe. Most industries are not dependent upon carbon emissions. According to a 2013 PricewaterhouseCoopers (PwC) report issued by the Carbon Disclosure Project, around 73 percent of total greenhouse gases are ultimately produced by just ten percent of the largest 500 companies in the world.
What this means for us is that there is no such thing as “The Business Lobby,” which monolithically opposes steps to address the climate crisis. Instead, American business leaders can be divided into three camps defined by their stances and action on climate change:
1 First are the abhorrent – but refreshingly honest – businesses and lobby organizations who unashamedly and publicly decry climate science and its logical policy responses. Industry giants like the Koch brothers should come to mind, with their shortsighted support for organizations like the American Energy Alliance and the American Petroleum Institute. We need not spend much time considering how to engage them.
2 Second are the enlightened group of business leaders and their companies who are already committing to a sustainable future. This is not just the small group of organic sellers at your local farmers market. Instead, major companies are already distancing themselves or even breaking away from the major lobby groups over the latter’s retrograde stance on climate change and environmental regulation. Since 2009, this list has included companies like Apple, Best Buy, Johnson & Johnson, Microsoft, and Nike.
Just this past August, Shell removed itself from membership in the American Legislative Exchange Council (ALEC) due to ALEC’s anti-scientific stance on climate change. And the month before that, alongside the announcement of Obama’s Clean Power Plan, 13 major corporations including giants like Apple, Berkshire Hathaway Energy, Google, and Microsoft signed the American Business Act on Climate Pledge. This pledge collectively committed them to reducing their carbon footprints and investing as much as $140 billion combined in low-carbon technologies. Crucially, this announcement was explicitly designed to signal America’s intent to make major binding commitments in Paris this December. This pledge was further strengthened through a letter to 29 US governors, signed by 365 businesses, highlighting how the plan is beneficial for their economies and job creation. Some of the more recognizable brands that were signatories include Ben & Jerry’s, Eileen Fisher, General Mills, and Staples.
“Those concerned with sustainability within the business community must get louder.”
3 A third and final group is arguably the most important as we look to achieve a historic tipping point for writing America’s new chapter as a leader in global climate policy. This group is comprised of the confused or misguided companies who contradict their public efforts to support genuine climate action through their sustained membership in the trade lobbies that actively stymy responsible efforts. This indirect lobbying means that corporations are often parties to lobbying efforts that are at cross-purposes with their own public stances. These companies are the clear targets for action and pressure by their colleagues and consumers.
Notably, in a 2013 survey of CEOs around the world by the UN Global Compact, 85 percent of business leaders demanded clearer policy signals from governments to support green growth. Yet, often here in the US, many companies who make the right public statements on climate change still contract out political activities to trade associations. This minimizes their risk; membership in these lobbies, particularly when it is discreet, enables a company to influence a wide range of political processes without opening the company up to the wrath of consumers.
According to the Union of Concerned Scientists, over half of the companies on the boards of four major lobby groups affecting climate change legislation do not disclose their membership on those boards. Companies knowingly tolerate the inconsistencies between their public values and those of the lobby groups who supposedly represent their interests.
In 2014, this gap between many companies’ public stance and their public advocacy came to the fore as Coca-Cola, Intel, and Verizon refused to endorse the US Chamber of Commerce’s anti-Environmental Protection Agency regulation fight, which centered on policies attempting to minimize carbon emissions. However, leaving the Chamber was perceived to not be an option for these companies because it provides crucial access on many other policy questions where their interests do align.
In light of these divergent approaches to climate policy within “big business,” how can members of our Conscious Company community help ensure the US remains steadfast in its commitment to the Clean Power Plan as we approach Paris? It is time to conclusively mobilize a transformative critical mass of American industry influence on our political system.
Business lobbying is nothing new and it should not be regarded de facto as nefarious. But after the Supreme Court’s Citizens United decision, lobbying carries an unprecedented and outsized influence. Those concerned with sustainability within the business community must therefore get louder. As recently as this summer’s Republican primary debates – when Donald Trump made sure we knew that his donations to US politicians get them to “do whatever the hell you want them to do” – there have been frequent reminders that ours is a political system built upon political donations and lobbying. Current expense estimates for the 2016 presidential race surpass $10 billion. The winners of the Democratic and Republican primaries are predicted to each spend twice as much as either Obama or Romney spent in 2012. We have limited time and must use these political realities to our advantage.
We can do this in a sustained way that goes beyond consuming wisely. Taking action across three key areas will be important for us as consumers, as shareholders, and as business leaders this fall:
Three Key Areas
1 Demand transparency: Require that corporations publicly disclose trade lobby group memberships – and whether they are aware of those lobby groups’ positions on climate change. Disclosure is increasingly recognized as a best corporate governance practice. Asking companies to publicly account for the gaps between their known public climate stance and those indirectly lobbying on their behalf can have meaningful outcomes. Recent battles have been fought within the boardrooms of companies like Verizon and ExxonMobil on the vital question of whether to be transparent about their political giving. Sadly, those two battles ended up as losses for advocates of transparency, but conversely, Wal-Mart opted earlier this year to significantly increase its transparency regarding political giving due to pressure from shareholders. We can and must ask for transparency around climate-related political contributions.
2 Encourage engagement: Urge those companies involved in business associations that lobby against climate action to loudly and publicly disagree with climate change stances that diverge from the commitments we need as we head into the Paris negotiations. Many local Chambers of Commerce already have distanced themselves from the US Chamber of Commerce – and this style of internal pressure from well-known members of the US Chamber will dampen enthusiasm for maintaining its current short-sighted path.
3 Create a new type of divestment campaign: Divestment traditionally refers to the important process of convincing shareholders and large investment funds to remove their financial support from companies engaging in objectionable practices. In the lead-up to Paris, our sustainable business community and consumer base must augment this well-established push for responsible investment by demanding responsible lobbying – even when the lobbying is indirect.
Consider the example of Google, which remains a member of the US Chamber despite having also signed the American Business Act on Climate Pledge. What would be our ideal ask of a company like Google? Not to simply leave the US Chamber, but to be a part of the creation of a meaningful corporate lobby association that would rival the current dominant anti-climate change business lobby groups. Such a climate-savvy association could have a core membership of companies who have already left the US Chamber since 2009. The creation of such an entity will give companies currently conflicted about leaving the US Chamber of Commerce a viable alternative. In other countries, massive splits within the national “business lobby” over policy priorities and approaches has seen the rise of newly powerful associations – most notably in India where the historically powerful Federation of Indian Chambers of Commerce and Industry lost many major Indian companies to a business group called the Confederation of Indian Industry in the 1990s and 2000s.
Ultimately, the very large gaps in the American business community on climate change provide an opportunity to do something about the Paris negotiations and Obama’s Clean Power Plan this fall. Corporate lobbying is powerful, but by following the steps above we can help tip the balance of lobbying power in an empowering way. Let’s recognize and reinforce the efforts of those companies already on the right path by pressuring those in the middle to join us in the months and years ahead.
32% The planned percentage by which the US will reduce its carbon emissions by 2030, from 2005 levels, under the Clean Power Plan.
25% The percentage of the world’s fossil fuels used by Americans, despite the US having only 5% of the world’s population.
85% The percentage of business leaders who are demanding clearer policy signals from governments to support sustainable growth.
73% The percentage of total greenhouse gases that are ultimately produced by just 10% of the largest 500 companies in the world.
$10 BILLION The estimated amount that will be spent on the 2016 US presidential race.
Jeffrey French focuses on the transformational opportunities and challenges created where the market meets society. As Managing Director of the DO School in NYC he creates and runs programs dedicated to giving people and organizations the skills they need to turn their ideas for social innovation into action with impact. By combining a proven implementation method with a real-life implementation experience, the DO School empowers changemakers to create impact in their communities, either within existing organizations or by launching new social ventures. Over the past decade, he has developed and managed programs for a Chinese educational exchange company; a non-profit dedicated to reducing armed violence through impact investing and grant-making, and at the United Nations Global Compact, the world’s largest corporate sustainability initiative.