The moral hazard of celebrating incrementalism

Power Points

The moral hazard of celebrating incrementalism

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I’m not in Madrid this week at COP25 – a.k.a. "Conference of Parties," the annual gathering at which world leaders discuss a coordinated approach to climate goals in meetings hosted by the United Nations Framework Convention on Climate Change (UNFCCC).

Instead, I’ve spent the last two weeks reading articles and newsletters capturing slivers of conversation, commitments and actions. After all, COPs are remembered by the stories they tell as much as the accords they ratify.

During this COP, two loud, dissonant narratives are springing from the headlines

The first: things are worse than we thought, and we aren’t headed in the right direction yet. A United Nations report shows that the world hit a new high in greenhouse gas emissions in 2018, despite pledges from world leaders to slash emissions, putting the earth on track to hit 3.2 degrees Celsius warming in the 21st century (dangerously past the Paris Agreement global goal to keep increases below 2 degrees C). 

Emissions from fossil fuels will hit a record high in 2019. Energy sector emissions are likely to close the decade around 17 percent higher than they were in 2009. The U.N. Secretary-General warned that climate change is close to "the point of no return" and that "we need to reduce emissions by 7.6 percent each year" to have a chance of a safe climate future.

The second: businesses are stepping up and taking ambitious action to address the climate crisis. For example:

  • RE100, the corporate initiative led by The Climate Group, announced more than 200 companies are committing to 100 percent renewable electricity, a number that grew by one-third in 2019 alone. Among the new signatures are Gap, 3M and Ralph Lauren

  • Kingspan committed to achieving net-zero emissions in manufacturing and halving emissions in its supply chain by 2030.

  • Cargill committed to reducing supply chain emissions by 30 percent by 2030. 

  • Tech company Logitech committed to a 1.5 degrees C climate pledge and 100 percent clean energy goal. 

  • The Science Based Targets Initiative released its first assessment (PDF) of its progress, announcing 686 companies publicly have joined the initiative; of these, 285 had their targets validated by third-party experts.  

  • More business leaders joined the #WeAreStillIn U.S. subnational delegation, including 3M, Facebook, HP Inc., Ikea, Mars, Target, CocaCola and Unilever. 

The private sector presence at the conference is apparent in person, too. As reported by the newsletter Heated, "If you wander into the U.N. climate talks happening right now in Madrid, you’ll be forgiven for thinking you’ve happened upon a corporate trade show." Accounts also report the venue is surrounded by corporate climate advertisements. 

The flurry of business involvement isn’t an isolated instance. Whenever there is a global news hook about climate change, commitments roll in from companies that want to do their part — this is a practice that dates back to at least the birth of the UNFCCC at the Rio Earth Summit in 1992. But if those targets had the intended effect, why are emissions still rising?

The moral hazard of celebrating incrementalism 

I reached out to Bill Weihl, former sustainability director at Facebook and green energy czar at Google, to talk about this disconnect. 

"Having companies adopt commitments is about individual action, not about changing the system," Weihl said in a phone conversation. 

That’s not to diminish corporate commitments; we should celebrate climate leadership everywhere. But, Weihl pointed out, if we don’t talk about what needs to happen, it’s not going to. 

"I think there's enormous moral hazard to celebrate the incremental without pointing out how inadequate it is," he said. "It makes it easy for people to stop there."

While individual commitments are becoming more widespread and actions are beginning to make a difference (for example, direct fossil fuel emissions in the United States are expected to fall in 2019, after a rise last year), they are not moving the needle at the speed or scale necessary to meet the magnitude of the problem. 

Individual company climate commitments cannot go far enough fast enough 

Many are aware that individual action alone will never will be enough to address systemic sustainability challenges. If consumers feel they’re complicit in the climate crisis because they drive to work, for example, it shifts the burden away from the powers shaping a society without adequate public transportation or housing options, and no one takes ownership of fixing the problem. 

It is a phenomenon known as diffusion of responsibility; if everyone is responsible, no one is. 

So it stands to reason that companies must be key actors in addressing climate change. After all, just 100 companies are responsible for more than 70 percent of the world’s emissions. If they had to, that group could effectively tackle the climate crisis. 

But here’s the thing: They don’t have to. Companies are also affected by the diffusion of responsibility phenomenon. If a handful of companies do what it takes to be zero carbon — or even carbon-negative — that isn’t enough to counter all the other companies doing little to nothing. 

"Having companies adopt commitments, that is about individual action, not about changing the system," Weihl said. "More commitments won’t change that anywhere near fast enough."

The solution: strong, science-based climate policy that levels the playing field

The only way to get to strong policy, Weihl said, is if companies are powerful, consistent advocates for climate action everywhere they operate. 

While we have seen companies push for clean energy policies that support achieving internal energy targets (such as utility deregulation, net metering policy or green tariffs), very few have stepped up to counter the influence of other industry lobbyists, especially fossil fuels. Notable exceptions, Weihl said, are Etsy, Adobe, Patagonia and Salesforce. 

Speaking out on climate and clean energy policies can be seen as dangerous for a company. After all, we’re in a hyperpartisan environment, and companies profiting from dirty energy won’t let ambitious policy pass without a fight. Few companies want to be embroiled in a brouhaha unnecessarily. 

But if anything will sway American politicians, it’s the business community. 

"I understand the risk they see in speaking up, but their silence is a form of complicity, given the extreme influence the other side is bringing to bear on these issues," Weihl said.

The takeaway: Companies should do what they can to support the innovations that make transitioning to clean energy possible and economical. At the same time, companies that care about climate should think about spending just as much time pushing politicians to pass meaningful, science-based legislation that makes addressing climate change precompetitive. After all, when companies speak, politicians listen.

And to NGOs, the media and activists: Help change the cost-benefit analysis for companies. Make speaking out on climate more advantageous than staying silent.

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