So it has come to this. Despite a mountain of scientific evidence emphasising the catastrophic implications of human-induced climate change, governments seem unable to take any significant steps to break humanity’s addiction to fossil fuels. As Chris Hayes recently noted, having been confronted with the fact of our addiction we now are in the full throws of denial; ‘it’s not that bad’, ‘we need fossil fuels to prosper and grow’, ‘one more fossil fuel development won’t matter’, ‘how bad can it be?’ etc. For governments and politicians long inculcated in the interests of the market and short-term corporate profit, the maintenance of a habitable atmosphere now appears something we are willing to forgo.
An increasingly common response to government inaction has been to focus on business, and specifically large multinational companies, to ‘save us’ from the worst effects of climate change. For instance a recent New York Times story entitled ‘Industry Awakens to Threat of Climate Change‘ highlighted how global companies like Coca-Cola and Nike were increasingly seeing climate change as a strategic risk. According to the report, these companies were reducing their use of natural resources and analysing supply chains to avoid the impacts of increasingly extreme weather events. Of course, ‘green business’ has been a familiar refrain for some time. Many large businesses have introduced practices of corporate environmentalism which include focusing not only on the physical risks of climate change for business operations, but also market, reputational and regulatory risks.
When I began researching business responses to climate change some years ago, the idea of market capitalism reinventing itself around new technologies that would wean us off our fossil fuel addiction (perhaps even force us to go ‘cold turkey’!) was seductive. However, with the continuation of ‘business as usual’ there appear a number of fundamental shortcomings in placing our hopes on business and corporate environmentalism as our best hope in avoiding the dire implications of climate change.
First, there is the important point that businesses really only engage in pro-environmental activities where there is a ‘business case’ to justify such action; that is, to increase shareholder value. Sustainability proponents will argue that there is no necessary zero-sum gain between the needs of the market and environment and that ‘shared value’ can often be created. However, the question must be asked, what happens when the interests of the environment conflict with those of the market? Based on our research of large Australian companies, these conflicts almost inevitably mean that the interests of the market will prevail. Indeed, as Peter Dauvergne has cogently demonstrated in his book Eco-Business, much of the the recent focus of corporate environmentalism has been aimed primarily at improving productivity and supply chain efficiencies in order to expand production and markets and ultimately be less environmentally sustainable.
A second critical problem with relying on multinational companies to ‘save us’ from climate change, is that as a strategy it is simply incapable of providing the sort of systemic and fundamental changes that are required (a radical reduction in global greenhouse gas emissions). For all the potentially worthy efforts of individual companies (or specific business units within larger corporate structures) in reducing their carbon emissions, as John Ehrenfeld has emphasised this simply equates to being a ‘little less unsustainable’. This is very different from the idea of sustainability as a way of maintaining economic and social activities over time in harmony with the environment. Indeed, a reliance on individual corporate environmental initiatives simply reinforces a reliance on an atomistic response to a systemic problem. As Dirk Matten highlighted at a recent University of Sydney symposium on ‘creating shared value’, this has resulted in ‘islands of pet projects in a sea of corporate irresponsibility’.
Third, placing our faith in business further distracts us from advocating for what is actually required; meaningful government regulation of greenhouse gas emissions. The only way we as a species can deal with climate change is to dramatically reduce our use of fossil fuels and this will require regulation, technological innovation and, most likely, mandatory restrictions on fossil fuel use. For many on the political Right, the idea of increased government regulation and restrictions on the use of fossil fuels is heresy. However government regulation has always been critical to the efficient functioning of capitalist economies and in prior situations of social crisis government regulation has been critical to societal resilience and response. Witness for instance the role of governments in liberal democracies during the Second World War where most economic activities came under government control as part of war-time mobilisation. Interestingly, some have sought to explore what such a ‘mobilisation’ on climate change might look like; it ain’t pretty but then the alternative of muddling along as we have looks much worse.
Of course, from the perspective of where we are today in 2014, such political scenarios are seen as outlandish and ridiculous. Mainstream political parties have basically given up on taking any meaningful action to reduce GHG emissions. And so we are left with the hope, and that is all it is, that somehow business corporations and the market will save us. This is beyond wishful thinking. In fact Daniel Nyberg and I have recently argued that this belief in corporate environmentalism forms one of three political myths that reinforce our suicidal trajectory as a species in the face of climate change.
I strongly support companies that take meaningful action to reduce their carbon footprint, cut their waste and use of natural resources, and even give back to the environment and society. However, this ‘win-win’ outcome is a rare circumstance. Indeed, as one senior sustainability adviser confessed in one of our research interviews:
‘…the best thing a business could do for the environment would be to shut down, but that’s clearly not a viable option!’
Interesting work is being conducted around the type of response needed to avoid catastrophic climate change. It is vastly different from the ‘business as usual’ mantra of the mainstream media and the soothing discourse of the ‘green business’ industry. To get some idea of the difficult task at hand, Professor Kevin Anderson‘s presentation below gives us some idea of what we need to do in order to potentially limit global warming to 2 degrees Celsius. Businesses will clearly be key actors in this social and economic change, but the scale of change required demands government regulation. We cannot afford to simply leave it to business to ‘save us’ from climate change.