By Tony Hagen • editor@newjersey.sierraclub.org
One of the points made at the recent Reuters Impact environmental conference was that we need environmental, social, and governmental (ESG) standards to ensure that companies act responsibly as climate change gets worse.
One speaker described a crisis of conformity in the boardroom, where environmentally unsound practices are being perpetuated. “It makes us think if we continue to do things in the old way, we all get a different outcome, and that’s insane,” said Halla Tómasdóttir, CEO of The B Team, a sustainability consultancy.
An IBM study this year suggested corporate executives are increasingly willing to lead their organizations on a sustainable path. The best are transformative (13%) and fully focused on this mission. Right behind are operational executives (43%), who are making some positive changes; and then come the compliant ones (29%), who just do what the regulations say. The remainder are “assessing,” or still thinking about what they could do.
Decide for Yourself
Consider the following real (anonymized) examples of leadership and decide which of the above categories they fall into.
Case 1: A national power company is moving into “green hydrogen” and solar panels and has replaced much of its aging pipeline structure, but it is also going wholesale into “renewable natural gas,” which is conversion of farm manure into burnable gas. This biogas is known to perpetuate factory farming, create environmental justice issues, and release toxins into the environment. There are still methane leaks.
Case 2: A large power company says it is dramatically cutting its emissions and improving energy efficiency, investing in wind turbine generation, and selling off its fossil fuel generating plants, which presumably will remain in operation under new ownership. Its plan for achieving net zero emissions by 2030 includes heavy reliance on nuclear energy, which involves continuing uranium dependence. Uranium mining involves CO2 emissions and health hazards, and radioactive waste is a worrisome byproduct of mining and nuclear power plants.
Case 3: An executive of a large business and industry association lobbies legislators to reject bills that would require divesting a state’s pension and annuity funds from fossil fuel companies. He advises a go-slow approach, saying fossil fuels are the bedrock of the nation’s economy, ensure pensioners will have income into old age, and can help pay for the transition to renewable energy. He argues that drastic measures to divest could bankrupt these fossil fuel companies.
Given the timeline we’re all facing from climate change, half measures and more protections for fossil fuel industries could be disastrous.
Some businesses don’t have a lot of flexibility to act. For example, what can a fuel oil delivery company do? Some businesses just put their heads down and avoid the sustainability discussion for as long as possible.
The Power of Family
Tómasdóttir said the most courageous CEOs are driven toward change by their employees and even their family members. “I have heard some remarkable stories from business leaders about how their own children or grandchildren transformed their heart space.”
The way out of this mess are the Four A’s, she said: action, accountability, advocacy, and ambition. “This is about leadership. That is what it’s missing. And it needs to be 10 times more courageous than what we’re seeing right now. And no longer just from the private sector or just from governments or just from civil society and citizens, but from all of us. No one can be absolved from the past. And if we embrace that, what if the best times are ahead of us?”