[Still catching up a bit on articles I’ve posted at different places over the last few months. Here’s one that appeared on The Guardian. To lend even more momentum to the shift I’m describing here, see the NY Times op-ed just a couple days ago from former Treasury Secretary Hank Paulson.]
“I think climate change is one of the greatest hoaxes ever perpetrated on man.” So said a colleague at a recent meeting of tech executives I spoke at. It was hardly the first time I’ve heard such a statement. But what happened next was a first in my 13 years of working in the intersection of business and environment. Another executive, someone in the insurance industry (but not coming from an environmental role), actually mocked the climate denier and laughed in his face. “Are you kidding?” he said. “Something like six of the most expensive insurance years in history happened in the last eight years.”
We may be seeing a change in cultural norms in business, where it’s less acceptable to espouse dated views on some big topics. Take the issue of gay rights in the US. In Arizona a few weeks ago, governor Jan Brewer vetoed a law that would have allowed a bakery, for example, to refuse to make a cake for a gay wedding. But I doubt Brewer had a moral epiphany. In reality, she felt pressure from a business community that feared real economic consequences if the law passed. A range of companies made their displeasure known publicly and the National Football League made a not-so-veiled threat that it might move the 2015 Super Bowl away from Phoenix. In a separate case, Mozilla’s CEO, Brendan Eich, resigned under pressureshortly after it emerged he had donated $1,000 in support of Proposition 8, which would have prevented equal marriage in California.
Is the same kind of attitude shift happening on climate change? In addition to watching the late-night mocking of an ill-informed colleague, I recently had another surprising experience with the top 10 executives from a large consumer products company. I polled them with an admittedly leading question:
“Robert Rubin, the former US treasury secretary, said recently that climate change is ‘an existential threat’ to our species. On a scale of 1 to 5, do you think that …
5 – Yes, it is an existential threat to humanity.
4 – Climate change is a serious challenge, but we can adapt and/or it’s not imminent.
3 – Climate change may be a problem, but it may be natural variation.
2 – There may be mild problems from climate change.
1 – It could be a hoax or there is no problem.
The anonymous voting actually shocked me. Every executive in this conservative, careful company chose 4 or 5 in anonymous voting.
My examples of a business awakening are anecdotal, but there is some quantitative evidence of a priority shift in the works. In the latest World Economic Forum Global Risks survey, which polls CEOs and world leaders, the top 10 risks identified by respondents were in essence variations on a couple of themes: economic uncertainty or climate and resource-related issues (“water crises”, “failure of climate change mitigation and adaptation”, “greater incidence of extreme weather events”, and “food crises”).
This dawning realisation of the extent of the climate problem is welcome news. But the real question is whether we’re acting on a newfound conviction with the urgency required. If more executives believe this is a “5” issue, an existential threat, what does that imply?
Let’s imagine for a moment a similar scenario in personal health. Let’s say that 97 out of 100 doctors tell you that you have an imminently life-threatening level of, say, obesity and diabetes. If asked how serious it was, you might say “5”, which would demonstrate a conviction that drastic changes in diet and exercise are now the top priority in your life. With a “4” vote, you’d be saying that you might consider some tweaks to your lifestyle, but only if it’s not too inconvenient or expensive. If you select “3”, you’re saying you’re not sure the doctors are right (maybe it’s just holiday weight you put on) and you’d adopt a wait-and-see attitude. And a “1” or “2” shows disdain for both the diagnosis and the doctors and a belief that you can eat whatever the heck you want.
The equivalent of a “5” vote on climate should be dramatic changes in our energy diet – a decarbonisation of industry and society at 6% per year from now on (as calculated by PwC). The list of what that pace of change would require of business leaders includes the following: dramatically increasing energy efficiency and use of renewable energy, supporting government policies to make the change more economic (a carbon price would be extremely helpful), pushing back on investors obsessed with quarterly results at the expense of investments in longer-term health, and deeper conversations both with suppliers and customers about how to cut impacts. These are some of the elements of a profound shift in “business as usual” that I’m calling “the big pivot”.
Very few companies are acting on all these fronts with urgency. It’s time for business leaders to get more vocal, come out of the closet of denial and talk openly about climate change as a serious challenge and opportunity. As self-help programmes have taught us, the first step is admitting you have a problem. At least on this front, both anecdotally and by survey, there seems to be real progress.
(Andrew’s new book, The Big Pivot, is out! Get your copy here. Sign up for Andrew Winston’s blog, via RSS feed, or by email. Follow Andrew on Twitter @AndrewWinston)
