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Sustainability: Is Greening Enough?

February 24, 2014

Last week, I shared with you an approach to sustainability advanced by Professor Eric Orts from Wharton that relies on "climate contracts" as a more realistic way of altering human behavior toward the environment than trying to negotiate and enforce a comprehensive global environmental treaty.

I concluded the blog by suggesting that corporations like American Express have established voluntary "climate contracts" to reduce their carbon footprints within a specified period of time, and that these efforts, together with voluntary disclosures under initiatives like the Carbon Disclosure Project, have been successful at making meaningful reductions in greenhouse gas emissions.

The Network for Business Sustainability published an opposing viewpoint last year under the banner, "Greening Is Not Enough." (June 3, 2013) In this blog, Harvard Business School Professor Michael Toffel and Auden Schendler, Vice President for Sustainability at Aspen Skiing Company, argue that greening operations and products is not enough to stop climate change.

Instead, they argue that companies need to become activists and engage in more meaningful leadership efforts. Specifically, they cite four ways that businesses can take the lead on climate change:

  • Lobby. The writers argue that corporate leaders should directly lobby for sweeping and aggressive legislation to impose limits on greenhouse gas emissions, such as a carbon fee and dividend program like that adopted by British Columbia. They suggest that such laws must be meaningful and national, not piecemeal and token.
  • Align your trade groups. Toffel and Schendler assert that many industry associations have stymied climate policies so CEOs of businesses should insist that their trade groups stop opposing such policies and resign from groups that continue such opposition.
  • Leverage your supply chain. The authors suggest that businesses should require their suppliers to assess their climate impact and set public targets to reduce greenhouse gas emissions. They cite 50 companies who are doing so with over 1,000 suppliers, and they also cite the Carbon Disclosure Project Supply Chain Program as a useful tool to aid in this effort.
  • Market your efforts. Companies engaging in these efforts should communicate what they've done to help customers and suppliers appreciate their environmental leadership. The writers assert that marketing is a form of climate education, and it might inspire other businesses to join them in taking these steps.

Toffel and Schendler assert that the reason that more companies aren't engaged in these types of meaningful activities is that companies make money by selling their products and services, and tend to avoid distractions from that key mission. Climate change is often seen as secondary in importance, global in scale, and a future risk.

To me, these reasons argue in favor of Professor Orts more pragmatic approach, and in fact, it's possible that items 2, 3 and 4 above are all examples of the kind of "bottom up" approach that he is advocating. That leaves lobbying for more "sweeping and aggressive legislation" as the key point of difference between the two approaches.

What do you think? Is it realistic to think that companies will voluntarily lobby for climate change legislation or is it more realistic to think that companies will voluntarily adopt carbon disclosure and reduction targets ahead of government action? Let us know what you think by clicking here. Alternatively, you can follow me on Twitter at @timmcclimon and comment there. Thanks for reading and sharing this blog with friends and colleagues.

P.S. Did you know that Pacific Gas & Electric, Apple and Nike resigned from the U.S. Chamber of Commerce over its opposition to regulating greenhouse gas emissions?


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