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Why Companies Don’t Care About Climate Change

Boyd Cohen | Friday March 4th, 2011 | 9 Comments

Boyd Cohen, CO2 IMPACT

In 2009, I co-founded 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 industry don’t really care about the planet or climate change. They care about things that matter to their pocket book 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 here recently), a climate change solutions movie “that doesn’t even care if you believe in climate change.” This is also the reason why I co-wrote 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 ROI 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 Wal-Mart for its recent transition to being a climate leader, including a recent post in this series. Does anyone really think that Wal-Mart 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 Wal-Mart, yes Wal-Mart, won the Aspen Institute’s 2009 Corporate Energy Efficiency Award 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 350ppm.

Boyd Cohen is the CEO of CO2 IMPACT, a carbon origination company based in Vancouver, Canada and Bogota, Colombia. Boyd is also the co-author of the forthcoming book, Climate Capitalism: Capitalism in the Age of Climate Change.

Twitter: boydcohen

This series will use the hashtag #climatcaptlsm


▼▼▼      9 Comments     ▼▼▼

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  • http://nickpalmer.blogspot.com Nick Palmer

    I disagree with your underlying point – that the “sexy” things you mention that companies might be keen to take up like saving money, efficiency etc are capable of delivering the size of reduction in planetary fossil fuel emissions that is needed.

    It’s no good jumping 6 foot over the twenty foot crevasse that separates our current ways of doing things from sustainable ways; portraying that as an effective strategy is not very responsible.

  • http://www.ArchWeek.com Kevin Matthews

    I agree about the need to jump 20 feet, but in some areas I think it can also be deeply valuable to get in lot of easier six-foot jumps ASAP. This an “all of the above” strategies are needed crisis.

    And, I think, by human nature, once a company is successful and rewarded for six-foot jump, they are likely to be more open to try the harder leaps we need too.

    • http://www.triplepundit.com/writers/ 3p Guest Author

      Hello Nick and Kevin. Thank you for your feedback on my blog post. There are companies taking giant leaps and I pointed out some of them in the post. Hundreds if not thousands of companies like Interface and yes even Wal-Mart have set audacious goals of getting to (or at least close to) zero waste, zero emissions, etc. All of those pundits and media who have made the argument that if each individual just turned off their lights for an hour, or changed their CFL light bulb we could save the planet…Those are very incremental and insufficient, although as Kevin suggests, if we aggregate solutions at the individual, community and corporate level, we just might get to 350 before the planet becomes uninhabitable. Corporations, big and small, are a big reason we are in this mess, but in my opinion, pose the best chance for getting out of it too. It is not just about their own reductions either, it is about how they steer consumer behavior and what products they sell (or service). The lifecycle impacts of everything from cars to washing machines to microwaves are much higher than the impacts from production. Thus the GE example is important. They are making a bundle of money selling products which have a much lower total footprint than competitor products.

  • Aron A Boettcher

    An interesting discussion: adapting our economic system, in many ways the beast that got us into this mess, is primary to approaching the milieu of problems associated with climate change. We built our castle on sand, and the tides are changing if you will. I think however, that there are many ways in which adapting to climate change and its implications will prove profitable, and it will be those prepared to take advantage of those situations who will gain. However, as I do not consider myself a capitalist, and due to historical precedent, do not trust current economic establishments or the principles they are based upon (Hobbes and Locke), however true they might appear in the interim. The problem, for all of us, is that the shepherds of finance and the originators of innovations are often speaking very different languages. For example, I am a botany student at university now, my primary interests are in fungi and yeasts; I am interested in developing a strain of yeast capable of producing cellulase. If this were possible it would create a huge boom in the bio-ethanol production industry, in that it would open up a massive new energy source for ethanol production (if a yeast can digest cellulose into glucose, that glucose would become available for another organism to turn into ethanol). The problem that I am grappling with, is that the global “climate crisis” is not actually a function of our carbon fuel use, however much you have heard. The problem is much more fundamental, and even if we removed ourselves from the use of carbon fuels entirely would not be solved.
    The underlying problem is human population growth, and regardless of whatever innovation I or my colleagues can come up with, unless it addresses this fundamental issue, we are really just advancing the timeline on which some massive kind of crisis will affect the human species (and not by very much, the doubling time the exponential growth of humans I think [not possitive] is only about 35 year? maybe 40>). So lets say someone comes up with a innovation that allows us infinite energy with 0 pollution. It wont matter, because within one doubling period we will encounter another limiting factor, be it arable land, toxin buildup, ozone depletion, space, clean water, habitable spaces ect..
    So my question for your blog, is what motivation does the innovator have to deliver his ideas to the world. I think it is a fallacious argument that any amount of innovation, less something to limit human population growth, will alter the current trajectory the human species has aligned its self to.
    Please to not interpret this post as disrespectful, I think this, and these discussions are some of the most important going on in the world today, and that if something comes out of them, we may be able to avert the worst of fates for our planet and our species.
    Thank you for your time,
    Aron.

  • http://bit.ly/neeblog Daniela

    I think it’s a shame that business can simultaneously give us green options and run their companies in increasingly green ways while promoting an economic system that makes it very tough to get out of our environmental predicaments. I agree with the blogger that speaking the language of business to business people is effective, but teaching the language of sustainability is the other half of the coin.

  • Bradley Short

    It really is too bad that we can’t talk about climate change in business circles (since it obviously will have repercussions for literally everyone), but you’re right. On the whole, it isn’t real and tangible enough for American businesspeople yet, so the focus is on the economics of sustainability. On the blog where I write (http://www.businessearth.com/category/blog) I’ll rarely, if ever mention climate change. It just doesn’t have the pull on a broad-business audience that it does on people like you and me.

    The good news is that the economic benefits are pretty exciting on their own. Many businesses actually do take social and environmental “morals” into account. Whether companies are acting better because of how they personally feel or only because it makes monetary sense matters much less to me. The funny thing is, many of the companies that are truly dedicated to environmentalism for the seemingly “right” reasons are the ones that are really getting ahead from a profit perspective as well.

    All three bottom lines really do reinforce each other.

  • William Cole

    This sounds similar to the debate about “quality is free” from the 1980s. It took several years for industry to pickup on what a few companies started. GE was a leader then, too, of US companies, eventually making 6 Sigma a business culture.

    What we have learned is that some US companies, like Ford, were more progressive in this area of quality than their domestic competition and eventually in a bad recession did not go under or need a government bailout. That is sustainability!

    The same is going to be true with sustainable environmental business initiatives. Mr. Cohen is correct that if business can see quick benefits for small leaps of faith (6 foot jumps) then they are more inclined to look for and find economical benefits for the larger sustainability projects requiring larger upfront investment.

    Businesses must be sold sustainability on their terms in addition to, or sometimes in exclusion to, planetary sustainability. We will all benefit in the long run.

  • http://www.triplepundit.com/writers/ Boyd Cohen

    Once again I am encouraged by the dialog this post has generated. Aron I do agree that population growth poses major threats to the planet and the human race. However, I am not prepared to throw in the towel and say that all our low-carbon efforts will be in vain. The solutions in our book, Climate Capitalism, if adopted whole-scale could enable a much larger global population to live within (or at least a lot closer to) our means. Efficiency, renewables, localized food systems, water adaptation solutions can all bring us close. Daniela, Bradley and William all reinforce in one way or another that we do need to engage the business community in the transition and that leading with climate change is probably the wrong message. In order for businesses to survive, to maintain and grow their workforce, to be an engine of economic growth, they must be financially sound. As was suggested, 6 sigma, JIT and other business concepts that have become ubiquitous today, also went through this phase of resistance until the soundness of the business case for doing so became evident. We need to do the same with climate change, thus Climate Capitalism in our opinion is a critical lense to present the challenge.

  • Dan

    We can discuss whether a six foot leap or a twenty foot leap is required, but more to the point, we have to confront the reality we have, and not the one we might wish to have. Pragmatic suggestions that are possible will always be superior to fantastic suggestions that may be employed instead as an excuse for inaction — because the chasm is too wide — or which can simply alienate the utopian dreamers from the hard-knuckle mainstream, which in the end has to leap too if we have any chance at all to make it across. In this particular case, if only 2% leap while the other 98% stand around, we’re in trouble no matter how nonplussed and irate that 2% get at everybody else. So what is “responsible”? I think responsible is not making excuses, and rather to pragmatically confront the reality that we have before us. There is a role for dreaming and for big leaps but we can’t eye those leaps while forgetting to lead the rest of the planet across as well. That means connecting to people and addressing their needs and values on their terms, and not focusing on accusing them or patronizing them for not being purely benevolent enough or revolutionary enough for our self-righteous standards. As I see it, that is what pragmatic and “responsible” means.