Win or Lose, Have a Post November Plan Ready

The climate around Proposition 23 (Prop 23) is heating up.  Supporters are touting its passage as supporting job creation in California.  The opposition suggests that Prop 23  is a play to continue dirty energy.  Urgency amongst sustainability folk is to ensure Prop 23 does not pass.  However, regardless if Prop 23 passes or fails, as business people pushing sustainability forward, we have to be prepared for either scenario.

Prop 23 will temporarily stall the implementation of California Assembly Bill 32 (AB 32), Global Warming Solutions Act, until unemployment reaches a threshold of 5.5% or lower for a full year.  Whether intentional or not, the verbiage implies a permanent halt, since California has rarely been at the unemployment rate threshold beyond one year.  Prop 23 effectively reverses AB 32, permanently.  Perhaps the number scheme for the proposition was just as intentional.

In my humble opinion, the heart of the issue is not about passage or failure of Prop 23.   Nor is it about the execution or reversal of AB 32.  It is about pushing the business case for moving sustainability forward.  We need to do a little scenario planning, in other words, have a game plan, whether Prop 23 fails or passes.

If Prop 23 fails, have we succeeded?  This may sound like a victory, but my answer is a resounding “no.”  Our jobs may appear easier because there is a mandate by law.  Businesses would be required to reduce emissions or face penalties.  But is this really the business case?  This sounds more like a case of regulatory compliance rather than the strict business case.

Yes, the regulatory compliance case is part of the business case because all business should be acting in accordance to the law.  But it is not the “business case.”  Businesses must be profitable to remain in business.  For some businesses, cutting emissions ultimately means going out business.  No emissions, no business.  We need to stick to the business case.

If Prop 23 passes, have we failed?  My answer here is also a “no.”  There will probably be a continued legislative fight.  That is not necessarily our fight as sustainable business people.  Our fight is with the business case itself.  I think this will spur an incentive for sustainability business people to discover or create stronger business cases.  We have to be able to make strong arguments for the business case of sustainability, whether it is required by law or not.

Sustaining a profitable business is part of sustainability.  The business case would be showing organizations and companies methods to remain profitable while reducing or even eliminating emissions.  It is a hard sell to ask a company to do something that is not profitable.

Regulation is not enough.  We must build a culture of business that reduces emissions not because it has to, but because it wants to, via the business case.  Win or lose, fail or pass, the fight cannot and must not stop at the ballot box with Prop 23.

Stay tuned; the series on Prop 23 continues!

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Our Propostion 23 series is made possible by EOS Climate – a producer of high-quality, verified emission reductions (VERs) generated from the destruction of ozone depleting substances (ODS). Please thank them for their support!

Jonathan Mariano is an MBA candidate with the Presidio Graduate School in San Francisco, CA. His interests include the convergence between lean & green and pursuing free-market based sustainable solutions.