It’s challenging to predict how corporate interests might address climate change under a new Trump administration, and it’s important to acknowledge the broad diversity of those interests. However, there are signs that key segments of the businesses community may continue down the path toward reducing carbon emissions, notwithstanding strong winds in the opposite direction from the Trump administration.
On November 22, just a few weeks after the presidential election, former New York City Mayor and philanthropist Michael Bloomberg wrote a short essay on climate change. “The U.S.’s success in fighting climate change has never been primarily dependent on Washington,” he wrote. “Bear in mind: Over the past decade, Congress has not passed a single bill that takes direct aim at climate change.” That hasn’t stopped the U.S. from moving forward and reducing emissions, Bloomberg wrote.
No matter who occupies the White House, he wrote, there are reasons to expect that business in particular will continue to move in directions that lower carbon emissions.
Major companies signal support for climate action
A day after Bloomberg’s piece, the Guardian, in the United Kingdom, reported on a statement signed by about 400 companies and nonprofits urging Trump, once inaugurated, to stay in the Paris climate agreement and support policies that combat climate change. Titled “Business Backs Low-Carbon USA,” the statement called on “elected U.S. leaders to strongly support
- Continuation of low-carbon policies to allow the U.S. to meet or exceed our promised national commitment and to increase our nation’s future ambition;
- Investment in the low-carbon economy at home and abroad in order to give financial decision-makers clarity and boost the confidence of investors worldwide; and
- Continued U.S. participation in the Paris Agreement, in order to provide the long-term direction needed to keep global temperature rise below 2 degrees C.”
The companies’ statement continued: “Implementing the Paris Agreement will enable and encourage businesses and investors to turn the billions of dollars in existing low-carbon investments into the trillions of dollars the world needs to bring clean energy and prosperity to all.”
Since it was issued last November, roughly 200 more companies have signed on, the Guardian reported January 10. Among the signatories are Monsanto, Staples, General Mills, DuPont Industrial Biosciences, Autodesk, and Levi Strauss.
A few told The Guardian why they signed on. For instance:
Phil Miller, Monsanto’s VP of global corporate affairs: “We signed the recent letter because we believe climate change is real and a potential threat to global food security.”
Jerry Lynch, chief sustainability manager for General Mills: “The climate affects most of what we do, from how much rain falls on a farmer’s fields to how much energy it takes to heat and cool our production facilities. And our choices, from how we ship our ingredients to how our suppliers plow their fields, have an impact on the climate. We believe – and scientists agree – that in order to halt or slow climate change, we need to reduce greenhouse gas emissions.”
Businesses sign up for solar and wind
More broadly, 22 of the “Fortune 100” companies have committed to procuring 100 percent of their energy from renewable sources.
Separately, Amazon’s Jeff Bezos, Virgin’s Richard Branson and Alibaba founder Jack Ma, among other entrepreneurs and venture capitalists, say they plan to invest as much as $1 billion in Breakthrough Energy Ventures, a project led by Microsoft founder Bill Gates to reduce greenhouse gas emissions by financing clean-energy technologies.
Utilities join renewables push
Wind and solar power, sector leaders in the march toward a renewable-energy economy, also are expected to continue their upward trajectory. As Bloomberg reported back in November:
“… Donald Trump will have limited influence on the U.S. utility industry’s push toward renewable energy, according to executives and investors. Companies including NextEra Energy Inc., Duke Energy Corp. and others that invest billions in power plants are already moving forward with long-term plans to generate electricity with cleaner and more economic alternatives.”
Tom Williams, a spokesman for Duke, the second-largest U.S. utility owner, told Bloomberg: “We said before the election that whoever is elected president, we would be continuing our efforts to go to a low-carbon fleet and also pursue renewables.”
Sustainable investments grow
A November 2016 report by Washington-based U.S. SIF Foundation, the Forum for Sustainable and Responsible Investment, found that “sustainable investments” overall surged by more than $2 trillion over the last two years to $8.7 trillion in 2016 “as money managers worked to accommodate U.S. institutions’ demand for assets that meet environmental, social, and corporate-governance goals.” These “sustainable investments” included those in renewable sources of energy.
In a “Your Money” piece in the New York Times on January 6, columnist Paul Sullivan wrote that investment advisers agree that “clean energy companies will continue to thrive during a Trump administration, regardless of what the president says or does. The sector has become as much about getting returns on investments and catching the next technological boom as it is about reducing greenhouse gases and helping the environment.”
“You can’t put the genie back in the bottle when it comes to the economics driving solar, wind, and battery storage,” added Thomas Van Dyck, managing director in the SRI Wealth Management Group at RBC Wealth Management, in Sullivan’s piece. “The economics are such that in California, wind and solar are the cheapest form of power you can put in place. If you’re a long-term investor, you need to look at these long-term trends.”
Companies meet to tackle climate change
U.S. businesses, from major airlines to banks to tech companies and energy producers, recently gathered together in Ft. Lauderdale for the inaugural “Companies vs. Climate Change” conference.
The list of partners in the group includes Alaska Airlines and United, Citi, Nasdaq, Ingersoll Rand, and Avery Dennison. Topics covered at the December meeting included climate resilience and adaptation, reducing food waste, and renewable energy. United and Alaska Airlines held a joint session to discuss moves toward more sustainable jet fuel.
If corporate America doesn’t step up efforts to help guide policy and fight climate change “then the people who are hellbent on rescinding regulations and just allowing the market to function without any guardrails are likely to undo all the progress that the United States has made over the past 70 years,” said Richard Eidlin, vice-president of policy and campaigns for the lobbying group American Sustainable Business Council, in a December 1 story about the conference in The Guardian.
“Businesses that are in [favor] of addressing climate change, and maintaining environmental safeguards need to really express their views and express the business case for doing so,” Eidlin said. “Not only is it good for them, and they’re generating profit and mitigating their risk, but what is just as important is stepping into the policy process.”
Of course, businesses aren’t interested in tackling climate change purely for altruistic reasons. The consequences of unmitigated warming could take a toll on their profitability. A study in Nature Climate Change, published last April, said as much.
“If we stay on the current emissions path, the study predicts, the value at risk in global portfolios could range from about $2 trillion to $25 trillion,” an article in the Harvard Business Review reported after the study came out. HBR cited a story in The Guardian in which Simon Dietz of the London School of Economics, the lead author of the report, said “long-term investors … would be better off in a low-carbon world.”