Climate Leaders: A Break from the Industry Pack

September 24, 2009
  • Aron Cramer portrait

    Aron Cramer

    President and CEO, BSR

Some of this week’s most interesting developments related to business and climate didn’t come from the UN Climate Summit in New York or from Pittsburgh (site of the G20 Summit), but instead from San Francisco and Beaverton, Oregon.

The decision by Pacific Gas & Electric (PG&E), a major California utility, to withdraw from the U.S. Chamber of Commerce altogether, and by Nike to very publicly dissociate itself from the Chamber’s lobbying efforts on climate legislation, are both strong signals that many leading businesses are dissatisfied with business associations' often lowest common denominator approach.

Their actions shouldn’t be underestimated. Companies take such public steps only very reluctantly. But with climate negotiations reaching a critical head in Copenhagen in a few months, Nike and PG&E concluded that the stakes are too high to stand by and allow the poor representation in Washington to continue.

Their actions will have an echo effect as lawmakers will conclude that other companies are likely thinking the same thing. So companies grappling with how or if to get involved in debates on climate—or other sustainability matters—can pull important lessons from these two cases.

First, Nike and PG&E acted to address their extreme frustration (shared by many others) with the U.S. government’s inertia around climate policy. The important debate on climate is not about whether to act, but how to act. These two companies understand that embracing the future means leading the way toward a low-carbon economy that will create immense business opportunity. The inherent opposition to change that marks the efforts of many trade associations risks shifting these opportunities to other companies and countries that are more ready to embrace the challenge of building the low-carbon economy.

Second, both companies are working with other coalitions to shape more active policy responses to the climate challenge. PG&E is a member of the U.S. Climate Action Partnership, and Nike has advocated for solutions through the CERES-led coalition BICEP (Business for Innovative Climate and Energy Policy). Both are still leveraging the power of numbers, just with different—and probably in their view—more credible partners.

Third, both Nike and PG&E are aligning their lobbying efforts with their stated corporate responsibility commitments. With the Chamber’s commitment to climate action unclear, they likely saw the risk of a credibility gap through their association. With misalignment one of the main reasons that trust in business, at least in the United States, is languishing at low levels, this is a critical area to address.

Too often, business associations respond to policy initiatives in a manner that recalls Groucho Marx’s gleeful refrain: “Whatever it is, I’m against it!” Nike's and PG&E’s steps this week have resonated far and wide. They raise the likelihood that smart climate policy will emerge from Washington and help lead to an agreement in Copenhagen.

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