Why companies don’t care about climate change
Cross-posted from TriplePundit.
In 2009, I cofounded a company called CO2 IMPACT to develop high quality carbon offset projects in the Americas. While I have a Ph.D. in business, I have frequently been too focused on my values to justify the business case for a lower carbon footprint. I guess I care too much about what we are doing to the planet and what we are leaving behind for my son, Mateo.
Along the way, I have learned a painful lesson that hopefully can help other aspiring climate capitalists: Most people and most industries don’t really care about the planet or climate change. They care about things that matter to their pocketbook or to their bottom line. I am of course exaggerating a bit as, for example, most of the Triple Pundit readers care about the environmental and social impacts of their activities, not just the financial.
Most of us noticed that Obama’s recent rhetoric about energy efficiency and renewables avoided the topic of climate change altogether. This is not because Obama suddenly doesn’t care about climate change. It is that he has learned what messaging works with the American people. Jobs, economy, jobs, oh yes, and did I mention jobs?
How we frame the issues and opportunities related to the low-carbon economy is incredibly important. Too many of us, myself included, wear our passion on our sleeves and focus on the wrong issues in trying to help engage a skeptical public to make the transition.
This is of course why Peter Byck developed a documentary, Carbon Nation, (which I blogged about recently), a climate change solutions movie “that doesn’t even care if you believe in climate change.” This is also the reason why I cowrote the forthcoming book, Climate Capitalism with Hunter Lovins. We hope that by removing the “debate” about climate change from the conversation and focusing on the profits, jobs, and economic growth that can be achieved by making the switch to a low-carbon economy, we might have more of an impact on public discourse and private action.
When CO2 IMPACT first started promoting our services to the market, our messaging focused on our ability to help companies reduce their emissions and generate extra revenue by selling the carbon offsets into the market. My opinion now is that was definitely the wrong message. We now focus on showing how companies can save money, or make more money, by engaging in energy efficiency, fuel switching, or methane capture projects. Oh yeah, and by the way, you can make some additional revenue from offsets to improve the project return on investment and grow your “green” brand at the same time.
Take our coal mine methane projects in Colombia. There have been two explosions from excessive gas in underground coal mines in Colombia this year killing 26 people. Last year, more than 200 miners were killed in similar explosions. While there are socially responsible mining companies who are absolutely concerned about the health and safety of their employees, the best arguments to get clients to embrace coal mine methane capture projects are financial. Mitigate operational risks of explosions, gain access to the methane as a cheap, green energy source, reduce their operating costs from ventilation systems (if you drain much of the gas, there is less ventilation requirements), and, oh yes, reduce their climate impact and gain additional carbon offset revenue.
Think Latin American coal mines are the only companies who care more about their bottom line than their impact on climate change? North American companies, except for a few notable exceptions, are the same way. Many recent articles in Triple Pundit have rightly recognized Walmart for its recent transition to being a climate leader. Does anyone really think that Walmart is doing this because they have suddenly become treehugging liberals? I don’t think so. They are doing it because they are saving money. And lots of it. And Walmart, yes Walmart, won the Aspen Institute’s 2009 Corporate Energy Efficiency Award [PDF] because of this commitment.
GE has made major efforts to promote their low-carbon green solutions. Sure they use their campaign to build their green credentials, but mostly they are doing it to generate more green bills. The Ecoimagination program is generating more than $18 billion per year in revenues for GE.
In conclusion, my point is for all of us who care about the planet and want to be part of the transition to the low-carbon economy, we need to focus more on the economy part, and slightly less on the low-carbon part. That is the fastest way to get to 350 parts per million.