Corporate Climate Commitments: Who Should Lead Climate Action?

November 8, 2019

In the past year, climate change activism has surged to unprecedented levels. Three growing climate movements – Fridays for Future (led by Greta Thunberg), the Sunrise Movement, and Extinction Rebellion – continue to make news headlines. The recent September 20th and 27th global climate strikes involved approximately 6.6 million participants in more than 150 different countries. Many of these activists continue to point the finger at fossil fuel and other companies for their central role in the climate crisis. While protests are a far cry from what is necessary to address climate change, taking political power, there is good reason to see hope in these new movements.

In addition, public opinion has shifted in favor of climate action. Last month, a global poll found that among eight major countries, including the US, climate change is considered the most important issue. In the same month, a US poll conducted by CBS News found that 64 percent of the population views climate change as a “crisis” or “serious issue” and 69 percent stated climate change should be addressed now or in the next few years. Recent polls in the UK, found that approximately 80 percent of UK citizens are concerned about climate change, two-thirds agree we are facing a “climate emergency” that demands immediate action, and a third agree with Extinction Rebellion’s “radical” goal of reaching net-zero carbon emissions by 2025.

Given these trends, it is not surprising that companies have started to respond. In August, CEOs at the Business Roundtable redefined their mission to include protecting the environment as well as valuing customers and employees. Not coincidentally, on the same day as the September 20th global climate strike, in which hundreds of “Amazon Employees for Climate Justice” participated, Jeff Bezos announced that Amazon would increase its efforts to reduce carbon emissions and reach net-zero by 2040.  In fact, a growing number of companies are adopting new climate mitigation plans. Over 90 companies are cooperating with the UN Global Compact to hold global warming to 1.5 degrees Celsius and become net-zero by 2050, including Unilever, Intuit, Sodexo, Hewlett Packard, and Levi Strauss. More recently, Microsoft has announced a plan to cut emissions by at least 30 percent by 2030. Lastly, the same day as the UN Climate Summit, major fossil fuel companies presented a plan to invest in carbon dioxide removal from the air and cut down on methane leaks.

Some argue that, given the lack of political leadership to enact climate policy, action by companies is a welcome path forward. However, the belief that corporations can respond effectively to climate change is questionable.  For one, the claims from these companies could simply be the latest iteration of “greenwashing,” to give off the impression of climate action while other actions and overall conduct suggest otherwise.  Corporations have a long history of chewing up radical environmental demands and spitting out paltry reforms in the form of misleading “green” advertising and ostensibly “ethical” commodities that supposedly protect us from the toxic environment – a byproduct of commodity production itself – , causing what sociologist Andrew Szasz calls political anesthesia: “a false sense of security undercutting political support for reform.” The recent climate commitments of these companies may be nothing more than slick PR campaigns to gloss their appearance for a public that is now clearly concerned about climate change. In an empirically rich examination of inevitably ineffective corporate responses to climate change, business school professors Christopher Wright and Daniel Nyberg show that green images and PR messaging are merely grafted onto processes of “creative self-destruction,” i.e., business as usual.  Relatedly, and most perniciously, climate-conscious corporate talking points could be a deliberate effort to give the impression that companies can act on their own to reduce carbon emissions, therefore, concrete and serious climate policies, like a Green New Deal, are unwarranted.

In addition to the threat of cooptation, there are other reasons to be suspicious of the effectiveness of corporate climate action, condensed in a recent New York Times headline: “Oil companies ponder climate change, but profits still rule.”  Sometimes claims about climate action are made with little financial backing or, rather, funneling money in the opposite direction. For example, Google touts sustainability while making substantial contributions to climate denialist organizations.  And fossil fuel companies are currently spending millions on anti-climate regulation campaigns – not to mention their role in bankrolling climate change denial and then denying it – despite peddling a new commitment to climate action. Further, the fossil fuel industry devoted only 1 percent of their investments into low-carbon energy – while simultaneously investing $50 billion in new oil and gas exploration projects, even when the costs of renewable energy were at record lows. Climate Action 100+ is an initiative from global investors who want companies to go carbon neutral by 2050. Their recent update found that companies are moving too slowly to reduce emissions, with only 9 percent on a path to meet the goals of the Paris Agreement. Even if we assume the best intentions of these companies to reduce carbon emissions, they are constrained by, in the case of fossil fuel and energy companies, alternative energy ventures being viewed as less profitable and, in the case of all giant corporations, the private-corporate structure itself.

Good intentions are not enough when the problem lies in our current socioeconomic systemCapitalism is a growth-dependent system, and economic growth is a central driver of climate change.  As economists Paul A. Baran and Paul M. Sweezy argued in their classic Monopoly Capital, capital accumulation is the “heart and core of the capitalist function” and the modern private corporation is the institutionalization of this function at a large scale.  Due to private ownership and resulting competition between firms, corporations will continue to grow.  The problem is that growth, despite or even, at times, because of efficiency improvements, requires increasing resources, like fossil fuel-based energy, and outputs, like carbon emissions.  Thus, leaving companies to their own devices to voluntarily reduce carbon emissions is an ineffective and, soon, catastrophic approach to climate mitigation.  While some companies have made minor improvements, it is very unlikely that all privately owned corporations will, for example, voluntarily reduce total energy and material use or eliminate the constantly expanding production of profitable yet relatively useless, carbon-intensive commodities.

Getting tough on the worst emitters won’t be enough either. Many lawsuits have been filed against fossil fuel corporations and other carbon-intensive companies in the past two decades for climate change-related harms. For example, in one high-profile case, Kivalina v. ExxonMobil, a native Alaskan village sought monetary damages from carbon-intensive corporations for the latter’s role in driving climate change, which is threatening the livelihood of Kivalina residents. Like another high-profile case, Comer v. Murphy Oil, Kivalina was dismissed on procedural grounds.  Current and future cases, like Rhode Island’s lawsuit against Chevron and 20 other corporations, may see more favorable rulings. However, it’s unlikely that a successful lawsuit would put the largest oil and gas companies out of business.  Even in a highly unlikely scenario where a massive lawsuit bankrupted ExxonMobil, for example, other firms would continue extracting where ExxonMobil left off.  Further, if companies become fearful of potential lawsuit-related costs they would likely just move overseas.  That is, climate litigation is geographically bound and embedded in a social system that limits effective action. To be clear, lawsuits against the biggest polluters are justifiable, but one should be cognizant of the political limits of suing some the richest and most powerful corporations in the world.

There are more possibilities than a marginally less-bad business-as-usual future.  Effectively and justly achieving deep emissions cuts requires fundamentally changing the system, not merely modifying it or slapping its beneficiaries’ wrists.  Real change requires state programs and regulations as well as trying out new forms of ownership and governance. For example, a transformative Green New Deal (pdf) requires bold programs, including work time reduction, shrinking the military, expanding and improving sustainable public transport systems like high-speed trains, nationalizing and phasing out fossil fuel companies, reducing and phasing out beef and dairy production, and other efforts that correspond with the IPCC’s call for unprecedented changes in all aspects of society.  Further, a livable future depends on our willingness to experiment with old and new forms of collective ownership and governance while building deeply democratic institutions to consciously avoid the social and ecological disasters of many twentieth century “socialist” projects.

Waiting for voluntary corporate actions in a system that still prioritizes profits above all else is simply too slow and may never be effective.  However, we should not merely scoff at inadequate corporate responses to climate change.  They are reactions to ripening conditions for a social transformation that can quickly and effectively reduce emissions.  Despite many significant obstacles, the potential exists.

Ryan Gunderson

Ryan Gunderson is an Assistant Professor of Sociology and Social Justice Studies in the Department of Sociology and Gerontology and Affiliate of the Institute for the Environment and Sustainability at Miami University. His research interests include environmental sociology, the sociology of technology, social theory, political economy and animal studies.

Tags: climate change responses, Corporations, greenwashing, system change