Corporate strategies to address global climate change

By Matt Burdett, 2 April 2018

On this page, we look at corporate strategies to address global climate change.

Corporate views on climate change

For the purposes of this page, ‘corporate’ refers to profit making businesses. The views of business are very varied, and can be determined in several ways, such as how much effort companies are making to reduce their carbon emissions. Another way is that of the UK-based thinktank (a thinktank is a group of experts giving an opinion on something) InfluenceMap. They conducted a study and looked at how corporate entities were responding to climate change in terms of:

  • How they supported policies to mitigate climate change (i.e. a measure of whether the business accepts the scientific consensus that climate change is caused by humans)
  • The level of ‘political engagement activity’ they undertake (i.e. how much are they trying to persuade the government to take action supporting their view)

They found that of the fifty most influential businesses worldwide, 35 “are actively lobbying against climate policy” while the other “15 of the 50 most influential are pushing for an ambitious climate policy agenda, favouring renewable power and electric vehicles” (InfluenceMap, 2017). These companies are shown on the graphic below.

  • How companies are responding to climate change. Companies on the left generally argue that climate change is not happening or that it is not due to human activities. Source: InfluenceMap, 2017.

We can see two general responses:

  • Supportive of the scientific consensus. These companies try to reduce their emissions, and they try to persuade governments to take more action.
  • Unsupportive of the scientific consensus. These companies see little or no reason to reduce emissions, and try to persuade governments not to take action on climate change.

Corporate responses to climate change

These two responses will be viewed on this page through two examples of action:

  • Corporate Social Responsibility policies which try to reduce emissions
  • Lobbying activities that try to persuade governments to maintain the status quo

It’s very important to note that these two responses are not opposites of each other. A company that pays lobbyists and denies climate change might have a very strong corporate social responsibility policy for things like reducing air pollution or improving workers rights. Similarly, a company that has a very strong aim to reduce emissions might also spend a lot of money trying to persuade the government of its opinions.

Response 1: Corporate Social Responsibility (CSR)

All countries have laws that set the minimum standards that companies must follow. In addition, almost all major companies have Corporate Social Responsibility (CSR) policies that show how the company will take responsibility for its impact on the environment and people, beyond the minimum standards set down in the law.

These CSR policies are often framed around the idea of the ‘Triple Bottom Line’ (Economist, 2009):

  • People
  • Planet
  • Profit

The Triple Bottom Line idea is that you can’t just measure a company’s success by the amount of profit they make, because if they damage people and environments along the way then they will eventually lose out financially too. For example, if you don’t train people in your factory, then you’ll be making sub-standard products which won’t make any money. And if you don’t look after your environmental impact, then you might run out of raw materials, or your customers might stop buying your products because they’ve found out how damaging they are.

There are some major movements that are based entirely around the concept of the Triple Bottom Line and the need for Corporate Social Responsibility. Fair Trade is a movement that aims to make profit while protecting the environment and empowering people in poorer countries. However, such movements remain a very small part of the overall economy – Fair Trade was less than 1% of the UK food market in 2012 (Fairtrade, n.d. and Statista, 2018).

Example of CSR and climate change: Google

Google began releasing an environmental report on its activities in 2016. It states that as part of its mission to make information more accessible and useful, it aims to “meet the challenges posed by climate change and the need for resource efficiency by working to empower everyone—businesses, governments, nonprofit organizations, communities, and individuals—to use Google technology to create a more sustainable world” (Google, 2017). The result is that Google is regularly applauded for its CSR policies: in 2017, it was the world’s third most trusted brand and the third most socially reputable company (top place was taken by Lego, and number two was Microsoft) (Reputation Institute, 2017).

It does this in several ways directly (Google, 2017):

  • Carbon neutral since 2007
  • Maximises energy efficiency in data centres – an active Google user creates about the same emissions in a month as driving a car 1.6 kilometres
  • Has partnered with 40 carbon offset projects to mitigate any excess carbon
  • Invested $2.5 billion in solar and wind projects
  • Reached 100% renewable energy for all operations in 2017 (see graph below)

  • Renewable energy purchasing by major companies. Source: Google, 2016 via Statt, 2016.

Furthermore, Google encourages more sustainable activities amongst its customers, such as (Google, 2017):

  • Giving 1 billion kilometres of directions per day, helping customers to take easier routes and avoid wasting energy in traffic congestion
  • Project Sunroof in the USA has mapped 43 million rooftops to help 2 million users make decisions about solar panel installation
  • Encourages users to move to cloud computing which could save 85% of energy, which translates to 98% reduction in greenhouse gas emissions due to efficiency in data centres and offsetting projects

Response 2: Lobbying

Lobbying is when people attempt to change government policy by convincing the politicians in government to agree with them. It’s important to note that lobbying is not only done by the groups that want to maintain the use of fossil fuels – often called the ‘oil lobby’. There are lobbyists on all sides but as InfluenceMap (2017) found, the majority of the most influential companies are lobbying against climate change policies.

Example of a lobby group: The United States Chamber of Commerce

The United States Chamber of Commerce is an industry body which lobbies the US government about its interests. In general, the Chamber aims to reduce governmental interference with business. Members include Target, Johnson & Johnson, Home Depot, and Facebook (Cirilli, 2017).

The Chamber states the following about climate change:

“The Chamber strongly supports continued environmental improvements, including sensible approaches to reducing greenhouse gas emissions…We believe that economic growth and environmental progress are not mutually exclusive goals…To make further progress, we should be guided by what has already worked: gains in efficiency, new technologies, and the increased use of natural gas and renewable fuels.” (US Chamber of Commerce, n.d.)

It is therefore the position of the Chamber that climate change is happening, and it is implicit that it is caused at least partly by human activities because the Chamber states: “The Chamber supports efforts to reduce greenhouse gas emissions and believes technology and innovation offer the greatest potential to reduce emissions and mitigate the negative impacts of climate change” (US Chamber of Commerce, 2017), and its Chief Executive Officer stated in 2017: “To be clear, the U.S. Chamber of Commerce believes that the climate is changing, and that man is contributing to these changes” (Harbert, 2017).

The Chamber’s activities are therefore not to deny climate change. Rather, the Chamber seeks to persuade politicians that government regulation of business is not the right answer to the problem. Instead, it advocates for business to be allowed the freedom to address the issue. It is quite hard to find information about the Chamber’s specific activities beyond a series of issue briefs on its website.

In general, most lobbyists work by using some or all of the following methods:

  • Financially supporting the election campaigns of supportive candidates
  • Organizing campaign fundraiser events for election candidates
  • Financially supporting the costs of court cases
  • Organising protests, petitions, letter-writing campaigns and so on
  • Conducting research that investigates an aspect of their interests (note: there is no suggestion that the research is biased; just that the choice of research topic is aligned with the aims of the lobbyist)

The US Chamber of Commerce spent $103,950,000 in 2016 on lobbying (Centre for Responsive Politics, 2017) making it the biggest lobbyist in Washington D.C. It claims that it was a major advocate for the decisions by President Trump in 2017 that changed the US government’s policy on energy, describing the following among its accomplishments (US Chamber of Commerce, 2017b):

  1. Executive Order 13783, promoting Energy Independence and Economic Growth, which initiated a wholesale review of U.S. energy policy and regulations.
  2. Executive Order 13795, Implementing an America-First Offshore Energy Strategy [which] repealed previous presidential withdrawals of Arctic acreage

The second order effectively allowed oil companies to conduct oil exploration in previously off-limits areas around Alaska.


Sources

Centre for Responsive Politics, 2017. Top Spenders. https://www.opensecrets.org/lobby/top.php?showYear=2016&indexType=s Accessed 2 April 2018.

Cirilli, 2017. The US Chamber of Commerce Might Not Be What You Think. https://www.racked.com/2017/10/2/16370014/us-chamber-commerce-explainer Accessed 2 April 2018.

Economist, 2009. Triple bottom line. https://www.economist.com/node/14301663

InfluenceMap, 2017. Corporate Carbon Policy Footprint – the 50 Most Influential. https://influencemap.org/report/Corporate-Carbon-Policy-Footprint-4274a464677481802bd502ffff008d74 Accessed 2 April 2018.

Fairtrade, n.d. How Big Is The UK Fairtrade Market? https://www.fairtrade.org.uk/What-is-Fairtrade/FAQs Accessed 2 April 2018.

Google, 2016 via Statt, 2016. Google just notched a big victory in the fight against climate change. https://www.theverge.com/2016/12/6/13852004/google-data-center-oklahoma-renewable-energy-climate-change Accessed 2 April 2018.

Google, 2017. Google Environmental Report: 2017 Progress Update. https://storage.googleapis.com/gweb-environment.appspot.com/pdf/google-2017-environmental-report.pdf Via https://environment.google/ Accessed 2 April 2018.

Harbert, 2017. Op-Ed: Clean Power Plan was the wrong answer. https://www.usatoday.com/story/opinion/2017/10/29/clean-power-plan-wrong-answer-editorials-debates/107143196/ Accessed 2 April 2018.

Reputation Institute, 2017. 2017 Global CSR RepTrak. https://cdn2.hubspot.net/hubfs/2963875/Resources/2017-Global-CSR-RepTrak-Report.pdf?submissionGuid=1378d083-e732-4549-9efd-5881b08d7be4 Accessed 2 April 2018.

Statista, 2018. Retail sales in predominantly food stores in Great Britain from 2005 to 2016, based on volume (in million GBP). https://www.statista.com/statistics/388614/retail-sales-predominantly-food-stores-great-britain-uk/ Accessed 2 April 2018.

US Chamber of Commerce, n.d. Issues: Environment. https://www.uschamber.com/environment Accessed 2 April 2018.

US Chamber of Commerce, 2017. Climate Change. https://www.uschamber.com/issue-brief/climate-change Accessed 2 April 2018.

US Chamber of Commerce, 2017b. U.S. Chamber Policy Accomplishments January–August 2017. https://www.uschamber.com/sites/default/files/2017_accomplishments_aug_2017.pdf Accessed 2 April 2018.


Corporate strategies to address global climate change: Learning activities

Questions

  1. What is meant by Corporate Social Responsibility? [1]
  2. What is meant by the Triple Bottom Line? [3]
  3. Describe Google’s strategy towards mitigating climate change. [4]
  4. What is meant by lobbying? [1]
  5. How much money did the US Chamber of Commerce spend in 2016? [1]
  6. Name four companies that are members of the US Chamber of Commerce. [2]
  7. What is the position of the US Chamber of Commerce on climate change? [2]
  8. Give two examples of the achievements of lobbyists on the policy of the US government under President Trump. [2]

Other tasks

This page is about corporate organisations and their response to climate change, ending with a specific focus on the pro-business lobby.

  1. Do you think this page is biased in favour of profit making companies, biased against them, or balanced? Consider your answer from multiple perspectives e.g. an environmental pressure group volunteer; a government representative; and a fossil fuel lobbyist.
  2. Is it ever possible to be free from bias? Explain your answer with reference to your own position on climate change.
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