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Challenging The "Bad Guys" of Climate Change

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Business leaders who embrace sustainability should expose those ignoring the imperatives of climate change.

Optimism in the face of repetitive failure is a sure sign of madness. Even the most progressive chief executives who have dedicated their undying support for a global climate deal must be wondering if staff changes in their priestly sustainability teams are in order (sorry, folks). For those who actually make the trip south to Durban for the UN climate change summit, they will be rightly lauded and applauded. But as they pump their enthusiasm from the sidelines, they will know in their hearts and especially their minds there just has to be a better way to flex their corporate muscle.

Greenpeace's latest assault on the corporate community, Who Is Holding Us Back, provides part of the answer. Simplified, definitely; caricatured, without doubt; an odd collection of poorly guided missiles, maybe. Yet fundamentally, Greenpeace is spot on that the real hurdle to progress are the folks benefiting from the status quo. Saudi Arabia is not surprisingly attracted to the idea of a world dependent on fossil fuels, and Russia can envisage a future "Siberia de Sol" as a sunny tourist destination. And, of course, there are those companies whose shared aim is to avoid losing out in the transition to a sustainable economy, not through innovation and investment, but by preventing the transition from happening.

The time has long passed where one can credibly argue that the data is unclear or the message confused. For those in any doubt, check out the latest UN-sponsored Emissions Gap report, highlighting the gap between carbon emissions reduction commitments made by countries and what needs to be achieved. And for those with a weak constitution, handle with caution the blistering report by McKinsey, Resource Revolution, that concludes that resource productivity increases will deliver only 30 per cent of what is needed to meet the needs of the three billion middle class folks who will be busy consuming in 2030.

The time has long passed where one can credibly argue that the data is unclear or the message confused.

National competitiveness is yet another veil behind which to hide for corporate incumbents benefiting from the status quo. "Why should 'we' make the change if the price is lost competitiveness, growth and jobs," they argue, referring to countries whose tax regimes and labour markets they are, in quick-step, abandoning. Yet the World Economic Forum's latest version of its leading-edge, national competitiveness index removes this tacky veil. With a re-engineered section providing a sustainability-adjusted competitiveness index of nations, it highlights above all the vulnerability of countries undervaluing the competitiveness costs of failing to manage environmental externalities and social inequality. Countries including China, India, and the U.S. each drop by more than 10 places in the ranking for their focus on sustainability.

Chief executives with business models in mind or practice that can profit from inclusive, environmentally bounded markets, should focus post-Durban on what to do about their backward-looking peers. Certainly this is not a new topic, exemplified by high-profile moves such as Nike's resignation in 2009 from the Board of the UN Chamber of Commerce because of differences over climate.

Nevertheless, this agenda is one that we have failed to deal with adequately. Ed Miliband was surely right to challenge "asset stripping" companies, to which he might have added that environmental assets on which we all depend are the most at risk. Anti-climate, corporate lobbying in the U.S. is, after all, why President Obama has on this topic retired to the bench, perhaps permanently.

Those working at the nexus of business and sustainability need to wake up to the fact that we have to deal with the "bad guys." They are not persuaded by the fine examples of sustainability leaders, and shrug off the pleadings of the great and the good. They will do practically anything, and that covers a lot of territory, to avoid their assets becoming stranded -- that is, less valuable if externalities are properly counted. Good, indeed great businesses and their respective leaders who embrace tomorrow's sustainable markets need to move out of their comfort zone in outing and addressing this problem. Greenpeace and other campaigners in turn need to establish new alliances including business, through which they can follow up on their own diagnosis, namely that sidelining resistant incumbents is the real deal.

An earlier version of this article appeared in The Guardian.

 
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