sustainable business

Big brands finding their voice on climate change, at last

Carolyn McMaster | May 24, 2017

A couple of years ago, big brands were catching flak for not taking a stand on climate change. It looks like the tide is turning.

In particular, 30 corporations recently took out ads in major newspapers urging the president to abide by the Paris climate agreement. More than 380 investors, representing $17 trillion in global assets, wrote the governments of the G7 and G20 nations in support of the agreement. And more than a thousand companies are making the same appeal with “Business Backs Low-Carbon USA” statement. Big brands are calling on Washington to keep President Obama’s climate policies in place, including the Clean Power Plan.

There are several things at work in this shift. First, as we noted when we looked at the reasons big brands were silent, it’s hard to take a stand if you’re not walking your talk. Corporations were slow to acknowledge the business threat from climate change and slow in doing something about it. Many are now acting in substantive ways. Second, smart CEOs know the threats are affecting their companies now, and that climate change is the root cause of a lot of bad-for-business political and social destabilization.

Stakeholders demand action
Customers and shareholders want action too. Surveys constantly show that many customers—not just “deep greens”—are demanding that businesses operate sustainably. (The latest research from Cone Communications showed the vast majority of consumers will buy—or boycott—based on values.)

More and more shareholders also are putting pressure on companies to operate sustainably and mitigate climate risk. (This case is an outlier, but Occidental Petroleum’s shareholders just passed a resolution to evaluate climate risk in a vote of 393 million to 191 million, reports ImpactAlpha CEO David Bank in this May 18 article.)

New regime is a wake-up call
These forces have been growing for years, but the coup de grace was the new regime in Washington. It’s threatening pretty much everything that is good for business (unless you’re in the oil business). It’s waking people up.

Now is the time to press the advantage. Applaud the companies that are taking action in addressing climate change and insist that others do the same. As Patagonia has said, most recently at last week’s Sustainable Brands conference, every time the company makes a business move based on what’s good for the environment, it’s also good for business.

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