CAMBRIDGE, — The fight against global warming has changed the environmental movement forever, but it has also changed business forever, argues climate change guru Truman Semans.
Semans, writing in Turning the Ship, a five-week online dialogue convened by the Harvard University Graduate School of Design and The Clark Group (and hosted by GreenBiz.com here), says that the climate challenge has forrced society as a whole to alter how we manage both our economy and our natural assets.
Semans lists several reasons that companies are adapting so quickly, as well as strategies they are implementing to make change:
At the simplest level, companies engage on climate because they find it in their strategic business interest to do so. While good corporate citizenship is one rationale for many companies, the main motivator for almost all is the desire to manage climate-related risk, capture opportunity, and maximize profits. These companies expect a major transformation in markets as the world comes to grips with the climate problem. [...]
Companies believe that the most effective and efficient way to address climate change is for the market to accurately reflect the true cost of GHG emissions as well as the true value of reducing emissions or sequestering carbon dioxide. The invisible hand can only allocate capital and labor in the most efficient, welfare-maximizing way if the invisible man can see what it's doing - and the way the market "sees" is by perceiving prices. [...]
The main rationales for pursuing climate strategies among early actors have been, in rank order, energy efficiency (internal, and in products), operational improvements, and cost savings.
However, early actors have increasingly built on these bottom-line strategies with top-line initiatives as they learn more about how markets will change under carbon constraints and how they can position themselves favorably relative to competitors.
Siemens' full essay, "Climate Change as a Driver of U.S. Market Behavior," is posted on Turning the Ship.
The Turning the Ship dialogue has brought together leaders from a variety of fields to explore market and policy barriers that may be inhibiting adoption of environmentally sustainable practices by U.S. businesses. In addition to Semans, other participants in the discussion include Dan Esty, Director of the Yale Center for Environmental Law and Policy; Michelle Wyman, Executive Director, International Council of Local Environmental Initiatives; Ben Packard, Director of Environmental Affairs, Starbucks Coffee Company.