Last August, Andrew Winston wrote a piece in The Guardian about the strategies American companies need to adopt in order to tackle sustainability challenges. One of these strategies was lobbying. “…Problems as large as climate change require communal action, which means government…But in the U.S., there's no government action without corporate support,” he wrote.
Last week, over 150 American companies followed Winston’s advice, but in a different direction than Winston probably had in mind. The companies signed a letter calling on President Obama to approve the construction of the Keystone XL pipeline.
In the heated debate over the future of the Keystone pipeline such letters are no surprise. However, what comes as a surprise is the identity of some of the signatories. In addition to the usual suspects (aka oil and gas companies), there are companies like GE, AT&T, PwC, Siemens, KPMG and Waste Management, which are among the leaders in the business community when it comes to sustainability, and frankly you would expect them to make a case against the pipeline, not lobby for its approval.
Nevertheless, these companies are part of the effort to convince President Obama to approve the project. The case they make is that “we are at an inflection point in our economic recovery. Whether economic growth will remain modest or pick up speed will depend on maintaining investor confidence and strengthening America’s competitiveness. The decision on Keystone XL will affect both.”
The letter explains that this project would not only boost the economy, but also that it would “enhance America’s competitiveness by helping to realize the long-standing goal of increased North American energy security, without spending a single dollar of U.S. government funds.”
In addition, the letter states that the environmental risks associated with the project are manageable – “Those risks, like those incumbent in many other significant projects, must – and can – be managed, through appropriate regulation and careful stewardship. Keystone XL will meet nearly 60 special conditions set by regulators to minimize risks, and ultimately the net environmental impact of the pipeline would be minimal – as was recognized in your Administration’s Draft Supplemental Environmental Impact Statement (SEIS).”
I won’t repeat the counter-arguments that people opposing the project like Bill McKibben or James Hansen make, but it’s still worthwhile to mention two important points: first, while the letter refers to the State Department’s draft report on the project’s impacts (SEIS) to show that even the State Department believes the environmental impacts of the project would be minimal, it ignores the fact that the same report concluded that the long-term effects of the project in terms of job creation would be minor.
The “tens of thousands of American jobs, across diversified sectors” the letter mentions are only for the short-term, but the letter fails to mention it. By the way, if the companies that signed the letter had the chance to read Ryan Lizza’s report on the Keystone pipeline they would know that the President doesn’t really buy the job creation argument (on the other hand, it seems that the President also doesn’t buy the environmental tragedy argument).
Second, the letter somehow fails to mention that the report’s findings on the minimal impacts on the environment were challenged by the EPA and that the State Department has reassessed its findings.
Now, the question is not only why companies like GE, AT&T, PwC, Siemens, KPMG and Waste Management support this flawed way of presenting the arguments in favor of the Keystone pipeline, but why they are in favor of it in the first place. Each of these companies has an impressive record of sustainability initiatives and positions, so why do they support a project that, as Bill McKibben noted, will provide the U.S. with a new and easy way to access the "dirtiest oil on earth"?
How can Waste Management, a company that calls itself “North America’s leading provider of integrated environmental solutions,” and that was hailed lately for its collaboration with Bill McDonough to help companies lower the packaging waste in their supply chains and repurpose the waste that does make, support the project?
How can PwC, which serves as a global advisor to CDP and report writer of its flagship reports, support the Keystone pipeline project? Isn’t it the same company that wrote in its Too late for two degrees report that “the only way to avoid the pessimistic scenarios will be radical transformations in the ways the global economy currently functions: rapid uptake of renewable energy, sharp falls in fossil fuel use or massive deployment of CCS, removal of industrial emissions and halting deforestation. This suggests a need for much more ambition and urgency on climate policy, at both the national and international level. Either way, business-as-usual is not an option”?
How can Jeffrey Immelt, the CEO of GE, whose Ecomagination program was one of the first programs that showed what sustainability in business meant and the man who said, “I’m a capitalist and a businessman. I believe I can drive earnings and make money by working to create clean energy, water and environmental solutions,” sign this letter of support?
It’s not clear if the answer to these questions is that this is just another example of the inconsistency of business when it comes to sustainability, or that these companies somehow truly believe that the Keystone pipeline and a sustainable future can go hand-in-hand. Maybe even both.
A hint might be found in PwC's Sustainability and Climate Change Director, Jonathan Grant's comment following the latest CDP Global 500 Climate Change report. “The early days of the journey down a low carbon pathway are likely to be littered with awkward compromises between growth, the environment and communities,” he said.
One can only wonder if with such awkward compromises as the Keystone pipeline, we will ever get to the promised land of a low-carbon economy.
Raz Godelnik is the co-founder of Eco-Libris and an adjunct faculty at the University of Delaware’s Business School, CUNY SPS and Parsons The New School for Design, teaching courses in green business, sustainable design and new product development. You can follow Raz on Twitter.
Raz Godelnik is an Assistant Professor and the Co-Director of the MS in Strategic Design & Management program at Parsons School of Design in New York. Currently, his research projects focus on the impact of the sharing economy on traditional business, the sharing economy and cities’ resilience, the future of design thinking, and the integration of sustainability into Millennials’ lifestyles. Raz is the co-founder of two green startups – Hemper Jeans and Eco-Libris and holds an MBA from Tel Aviv University.