Abu Dhabi, UAESaturday 6 June 2020

Growth is not necessarily climate’s enemy

Activist Greta Thunberg accuses businesses of putting profit before the planet but leaders say sustainability is not easy to come by

Environmental activist Greta Thunberg addresses the Climate Action Summit at the United Nations General Assembly in New York. AP Photo
Environmental activist Greta Thunberg addresses the Climate Action Summit at the United Nations General Assembly in New York. AP Photo

“How dare you!” It was the phrase ringing in the ears of delegates at the UN General Assembly last week and reverberating around the world. It took a full-blown impeachment inquiry on Capitol Hill to knock Greta Thunberg’s passionate, emotional and distressing speech from the headlines.

The teenage environmental activist attacked the “fantasy” of growth and tore into those she believes are complicit in the climate crisis, accusing businesses of putting profit before the planet. Amid fresh warnings of accelerating ocean warming and rising sea levels, it was hard to escape the notion that the Earth is doomed.

Some prominent voices have pushed back. LVMH chairman Bernard Arnault called Greta “A dynamic young girl,” but said she was “surrendering to catastrophism”. Her views were, he said, “demoralising for young people”.

Far from being demoralised, perhaps this generation’s activists are instead learning that extremism is the way to rise above the cacophony of opinion and sluggish government policy action, and inject urgency into the debate.

It did make me wonder that at a time when global policymakers are challenged by slowing economies, is growth really a fantasy or at worst an environmental enemy?

For businesses it’s a calibrated response based on their priorities. Public companies have three principal stakeholders: customers, workers and shareholders. Only when the priorities of each of the three align with environmental concerns will Greta-style urgency be truly established.

The classic criticism of big companies is that principles are sacrificed at the altar of shareholder value, but there is a sense in boardrooms that this is changing – especially if environmental considerations make good business sense. Shareholders may be more sanguine about sacrificing a little return if greener policies can help attract a generation of consumers.

The real game changer here is when no sacrifice is required at all: more green can mean more profit, and also growth, just ask Adidas chief executive Kasper Rorsted. “Having products where you have a sustainability value proposition makes a big difference in the market,” he told me recently. “We see it as a business opportunity.”

Mr Rorsted said green products are on course to make Adidas $500m (Dh1.84bn).

The argument therefore becomes about rethinking the way we choose to live and work. We cannot turn a blind eye to growth that pollutes or destroys the environment and adds to the acute problems we face, but nor is it reasonable to suggest we abandon the focus on growth itself.

Some politicians are at least talking a good game: Antonio Guterres, the UN Secretary General, demanded concrete steps and commitments to fight the climate crisis at the UNGA, while Angela Merkel spoke of tangible investments in real solutions. Once again, though, business is before the game, especially in a country such as the US where the government is rolling back environmental protections.

Amazon chief executive Jeff Bezos has said his company was “done being in the middle of the herd on this issue”, hauling the behemoth out in front of the pack by announcing it would be carbon neutral by 2040, a full decade before the deadline scientists have suggested in order to avert a climate catastrophe. Given that Amazon’s 2018 greenhouse-gas emissions hit 44.4 metric tonnes, the plan is ambitious, to say the least (and for some still not far enough).

Other major companies are less equipped to make such bold declarations.

“What is good for General Motors is good for America,” then chairman of GM, Charles Wilson, famously said in 1955. Not so today. The American car giant is grappling with the fundamental question gripping the car industry: how to tool up for an electric future, when sections of its workforce will inevitably be left behind?

Of course, consumers are also workers but are they prepared to sacrifice their livelihoods for the planet? Electric vehicles will reduce greenhouse gases, but that is scant consolation to tens of thousands of workers the United Automobile Workers’ union predicts will lose jobs as a result.

The financial sector plays an intriguing role, too. Companies representing a third of the global banking industry have pledged to align themselves with the Paris Climate Accord goals. Among them is heavyweight Dutch lender ING. Ralph Hamers, its chief executive, told me last week that while banks may not be able to contribute by reducing their direct carbon footprint, they can make sure they are lending to clients who care.

Where there is technology available, ING wants its clients to invest in it and reduce their footprint. “If they don’t do it, we may exclude them,” Mr Hamers told me.

His view is also pragmatic: ING does not want outstanding loans to sectors that find themselves on the wrong side of regulation one day, leaving it with stranded assets.

Consensus is perhaps a bigger problem. Governments and, more perniciously – lobbyists are key players in that regard. As a reporter in Brussels, I joked the EU should move its permanent headquarters to Strasbourg, simply because it’s more onerous for lobbyists to travel there. In America, lobbyists are thwarting attempts to find a unified path away from old habits.

Electric vehicles have faced both red carpets and slammed doors: Georgia went from offering tax breaks to EV purchasers to scrapping the perk entirely, then astonishing buyers with a higher vehicle tax. The White House is also trying to temper California’s agenda-setting regulatory power. EVs remain a risky punt for manufacturers while infrastructure is patchy and lacking federal support.

We are not doomed, though. Businesses can lead the way in finding climate solutions, but the road may be rocky and arduous for all involved, from employees to investors to customers. The role of politicians must be to help ease this path.

If Greta’s speech has a single message that business and government can get behind, it is that they need to get co-ordinated, and then act on it, and fast.

First Move with Julia Chatterley airs Monday-Friday at 6pm on CNN International

Updated: September 30, 2019 04:37 PM

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