Business leaders need to show Trump they are not cheerleaders for global warming but determined champions of an environmentalism, writes Mark Malloch
THE relationship between business, politics, and the environment is about to become more complicated. As US President Donald Trump’s administration tries to dismantle vital environmental protections, some of which have existed for decades, business leaders are increasingly recognising – and acting upon – the need for environmentally sustainable policies.
Trump, who once called climate change a Chinese hoax intended to weaken the US economy, has already repealed the Stream Protection Rule, which bars coal producers from dumping waste into waterways.
Next on the chopping block may be the Clean Power Plan, which limits greenhouse-gas emissions from generating plants — by far the country’s largest source of CO2 emissions — with the goal of cutting carbon pollution from the power sector to 32% below 2005 levels by 2030. The Trump administration has even threatened to back out of the Paris climate agreement, to which the world’s governments committed in 2015.
A decade ago, business leaders would have largely welcomed such regressive environmental policies, which can lower costs and expand opportunities, by reducing constraints on their companies’ behaviour.
But today, even as markets respond bullishly to Trump’s “business-friendly” pledges — not just deregulation and tax cuts, but also a trillion-dollar infrastructure plan that would include reviving coal — business leaders have remained cautious.
In particular, they have strong reservations about a potential withdrawal from the Paris climate agreement. Whatever benefits could be derived from a low-regulation economy would not offset the harm of reneging on environmental commitments that are viewed as vital to American business success.
Some are already making their voices heard on the matter. Since Trump’s election, nearly 900 companies and investors, many of them American, have signed an open letter “Business Backs Low Carbon,” calling on the administration not to withdraw the US from the Paris agreement. These companies, which include large multinationals, believe that failure to build a low-carbon economy would jeopardise America’s prosperity.
There is compelling recent research to support this view. Last month, a study by Energy Innovation showed that elimination of the Clean Power Plan alone could cost the US $600bn (€560bn) and cause 120,000 premature deaths by 2050.
By contrast, efforts to build a more sustainable economy would bring far-reaching benefits.
Last January, the Business & Sustainable Development Commission estimated in its flagship report that companies could unlock €12tn globally in revenue and savings by pursuing sustainable business models.
Such models can also create up to 380m jobs by 2030 in key economic sectors, including food and agriculture, energy, transport, health, and municipal government. In the energy sector alone, the opportunities are valued at $4.3tn (€4tn).
Corporate strategies are increasingly falling into line with these findings. In 2005, on the heels of Hurricane Katrina, which devastated the US Gulf Coast and affected a significant regional consumer base for Walmart, the company’s then-CEO Lee Scott delivered a telling speech, entitled “Twenty-First Century Leadership,” to all company employees.
Scott set significant environmental goals, as part of a broader vision for Walmart to become a more responsible corporate citizen.
Today, Walmart is a leading commercial solar and on-site renewable-energy user, deriving about 25% of its global energy consumption from renewable sources.
But, while business leadership and collective action are needed to create a sustainable and inclusive economy (a central message of our commission’s report), the private sector cannot do it alone.
So it is not enough simply to oppose Trump’s environmentally damaging policies; businesses need to get his administration on their side, so that the US authorities create an environment that encourages sustainable practices and green innovation.
A groundswell of support from CEOs, on a nonpartisan basis, could be the key to spurring the needed action. Before the Paris climate conference, politicians knew that environmental activists wanted a deal to limit climate change; arguably, what ultimately drove them to act, however, was finding out that CEOs and boards felt the same way.
Business leaders need to show Trump that they are not cheerleaders for coal, pollution, and global warming. They are determined champions of an enlightened environmentalism that is in the interest of all their stakeholders – customers, shareholders, employees, and the communities in which they operate.
Mark Malloch Brown, a former UN deputy secretary-general and UK Foreign Office minister of state for Africa, is Chair of the Business and Sustainable Development Commission. Copyright: Project Syndicate, 2017.
© Irish Examiner Ltd. All rights reserved