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A Tranquil Climate in the Boardroom

Monopoly guy under water   

Are business leaders finally discovering that climate change hurts everyone’s bottom line? In the wake of Hurricane Sandy, NYC mayor Michael Bloomberg endorsed Obama over Romney because Obama took concrete steps against carbon pollution, and at the same time he slapped Romney for denying climate change.(1) This was a major departure for any one-percenter, as Bloomberg clearly is, since that group is allergic to talking about climate change. As climate scientists offer more detailed predictions about our overheated future, one fact has become clear: climate change is going to cost everyone a lot of money. The worse it gets the more it will cost. This has been known for a decade, and new businesses are thriving in the areas of alternative energy, conservation, etc., but corporate leaders have remained eerily silent on the reality of climate change, apart from spin and greenwashing.

    Though high-level executives are reputed to be pragmatic and they’re privy to top-quality information, the top US business class acts like climate change doesn’t exist. Meanwhile, another pragmatic group -- the US military -- has oriented its planning toward fighting conflicts arising from climate change. They know climate change is coming and they’re taking it seriously. And the insurance industry -- also hard-nosed pragmatists -- has modified it’s coverage to account for rising sea-levels. Since those no-nonsense groups can take the information on climate change and turn it into action, why are American corporate leaders AWOL? Maybe they think that climate change won’t cost them real money.

    But, if you’ve built your company in one kind of climate, and then have to move to a different climate (or if your climate moves away from you) it’s going to cost you to in logistics and constructing new physical plants. Corporate business leaders may imagine that budgeting for more for air conditioning days would suffice, and that might actually work for a while. After all, American corporations are often reviled for planning in three-month increments, prioritizing quarterly performance numbers over everything else.

    Compared to American business leaders, the European business community at least accepts climate change and tries to foresee how it will affect commerce. In 2010 the cover of The Economist offered “How to Live With Climate Change.” Similarly, that magazine’s special report last June described new ways corporations can profit from the disappearing Arctic Ice Cap. Always ironic, the report drolly concludes that profits from exploiting an un-frozen North will be eclipsed by the $75-100 billion per year that adapting to climate change will cost.(2) Not exactly a win-win.

    American corporate leaders have access to the best scientific evidence, corroboration from like-minded institutions, and herds of analysts who can crunch the numbers showing how profits will evaporate in a hotter world. But, so far, it takes nothing less than superstorm Sandy’s sucker punch before a corporate leader will act on climate change. Perhaps 30 years of outsourcing, offshoring, and “externalizing costs” has duped America’s CEO’s into thinking that the burden of runaway climate change is for other people to worry about. Well, the Reagan Revolution freed corporations from the social contract, but not from the laws of physics.

    True, some corporations are greening and/or greenwashing themselves. But office-wide recycling programs or fleets of fuel-efficient cars are just kid stuff in the face of climate change -- survival is going to take a lot more than that. Capitalism has made some huge achievements for society that individuals or governments couldn’t have made by themselves, and surviving climate change may eventually become another example of this. One-percenters can disagree, but it seems clear that we’ll survive climate change only if we work together and all pitch in. Many non-elite business leaders and others have worked against climate change for years, and are ready to do more. That’s a good start, because we only have a couple of years to turn it around(3) and we need all hands on deck. Corporate business leaders: Where ARE you guys?