In a provocative series over on GreenBiz, sustainability expert Dave Witzel praises the partnerships that EDF and other advocates have forged with corporations, but rightly concludes that these partnerships “haven’t been enough.” Building on an op-ed that EDF President Fred Krupp wrote for the Wall Street Journal in 1986, laying out the then-novel argument in favor of partnerships between corporations and environmental NGOs, Dave’s series calls for a new era in which “it is not the responsibility of outside advocates to identify and address environmental threats, but where business itself internalizes and assumes responsibility. In this stage, business is expected to be sustainable as a social obligation and, failing to meet this obligation, risks loss of its license to operate.”
Dave says that this transformation “will take a generation,” and adds that though “there are certain to be legislative components…it is ultimately a social norm.”
Dave’s vision is inspiring – but I think the transformation is already underway. And I’d like to add a friendly amendment to Dave’s history as well as his vision. I believe he underestimates the crucial role of government in driving environmental progress and building a civic atmosphere in which corporate leadership is expected. More than 25 years of working with business has convinced EDF that partnerships are an indispensible tool, but they are not the only tool. EDF never said that green business partnerships would do it all by themselves – and we never stopped advocating for smart regulations designed to drive corporate innovation in service of sustainability. (Nor did we stop taking the scofflaws to court when necessary.)
At the time Fred wrote his op-ed, EDF was hard at work on the problem of acid rain – work that led to the bipartisan Clean Air Act Amendments of 1990, which ushered in a cap-and-trade program for sulfur dioxide that gave industry tough pollution limits and market-based tools with which to meet them. It worked – cutting SO2 ahead of schedule and below estimated cost. As a result, according to the EPA, ambient SO2concentrations fell 72% in the U.S. between 1990 and 2012. To help save the lakes and forests of the Northeast, we couldn’t wait for utility executives to evolve their thinking. We helped put in place smart rules (with the support of a few enlightened industry leaders, and over the opposition of many others) that changed the incentives for the industry. Suddenly they could get paid not just for polluting, but also for cutting pollution. Then their minds changed in a hurry.
In the same way, right now we need firm limits and a price on carbon to help incentivize businesses to reduce greenhouse gas emissions before it is too late. Clean energy is accelerating, but not fast enough. In my view, it was the failure of Congress to enact a comprehensive climate and energy bill in 2009-10 that, along with the Great Recession, led some companies to relax their sustainability goals. But many kept pushing, because they understand that environmental sustainability is business sustainability—and the truth of that view is becoming increasingly clear with report of extreme weather impacts related to climate change. As the latest IPCC report tells us, (via a CNN report), “the combined cost of crop losses, rising sea levels, higher temperatures and fresh water shortages could mount to between $70 and $100 billion a year, estimates that do not account for catastrophic scenarios, which researchers said tend to have the most devastating effect.”
That’s why it’s such good news that in the years since climate legislation stalled, public understanding of the climate threat has been rising, and states have been leading: California has the most comprehensive carbon cap in the world, thanks to legislation that EDF co-sponsored, and Oregon and Washington are working to put such a cap or tax in place. And corporate leaders have helped all along the way. Now it’s time for Washington to take up the issue again as well. The specific policy tools are open to discussion and debate, but getting it right will change the equation for countless corporate investment decisions. And getting it right will require corporate leaders to step up again, as they did in the last decade with the pro-climate-bill coalition called USCAP, of which EDF was a founding member.
Ask corporate leaders what’s missing in Washington today, and many will tell you they need clear rules of the road, the kind USCAP advocated for – smart rules designed to harness the power of the marketplace by aligning profit motive with the social good. The evolving mindset Dave calls for is the right one, but it will become reality much faster if governments at the state and federal level put the right rules in place. And corporate advocacy, which has fallen off in the years since USCAP, can help make that happen.
“Partnerships have demonstrated that businesses can make sustainability improvements when they choose to,” Dave writes. In the next stage of environmentalism, “we must insist on it.” I couldn’t agree more. That insistence takes many forms. But perhaps the clearest expression of we are the laws of a democratically elected government – laws that can help us get to the tipping point where business understands that sustainability stands at the very core of both balance sheet and the social contract. In the era of Capitol Hill dysfunction, it may seem quaint to say that. But the demographics of the issue are in our favor. Overwhelming percentages of people under the age of 30 are in favor of climate action. Politicians—and businesses—that want to win in the future must take climate change seriously.
We see momentum all around us, but we know profound change takes time. That’s one reason we’re helping to build the next generation business leaders through a program called EDF Climate Corps, which trains some of the nation’s most capable MBA and MPP students to identify energy efficiency savings inside America’s most influential public and private sector organizations. Since 2008, EDF Climate Corps has selected, trained and embedded more than 400 energy superstars in hundreds of corporations and public sector organizations. These young people have found $1.2 billion in potential energy savings at participating organizations such as Google, GM, PepsiCo and Verizon, and they’re graduating with job offers for positions like Director of Sustainability and Energy Manager.
Next month the new Showtime climate series, Years of Living Dangerously, devotes a whole segment to EDF Climate Corps. The young people profiled in the series are some of the many reasons we at EDF remain optimistic that our environmental challenges can and will be solved.
Thanks for your thoughtful continuation of this discussion. While there seems to be a lot of overlap in our perspectives, I think the driving question is "are we winning?" You see a transformation happening. Is this transformation enough to "defend the environment"? As a test, do you foresee a point where EDF can put itself out of business?
We're playing whack-a-mole with environmental problems. Granted, great progress was made on SO2. And on clean air and clean water. But now we're dealing with a global climate issue, more water issues, species loss, toxics, and more. Until we make this problem bigger and tackle the root cause -- misguided business incentives -- we'll never win.
I don't disagree that government can play an important role, but government tends to follow, not lead. I don't see how you get constructive government engagement without much deeper business commitment. The failure of cap & trade that you cite, is a good example of what happens when business can negotiate with environmentalists with one hand while lobbying against progress with the other.
Have you taken a look at the third piece of the series - http://www.greenbiz.com/blog/2014/04/02/five-steps-defining-and-enforci…? This was intended to be some pragmatic ideas about the role of environmentalists in the fourth stage. Do any of these suggestions resonate?
Yes, the transformation is underway, if for no other reason that grid parity has been achieved with solar power. Less forward thinking companies will simply choose the energy source that is the cheapest, and that increasingly includes renewables. On the other hand, there are plenty of businesses that are finally realizing that a clean, sustainable business is simply good business. They are starting to consider the long term, instead of their quarterly profit statements.
Nick TedescoApril 23, 2014 at 7:42 pm