SAN FRANCISCO - In the fight against climate change, government and industry have traditionally been adversaries, as regulators try to force polluters to take costly steps to cut planet-warming emissions.
But at Gov. Jerry Brown’s global climate summit this week, some of the world’s biggest companies are in the spotlight as partners in tackling global warming. The private sector has emerged as a growing player in the alliance of cities, states and other institutions pledging to uphold emissions cuts of the Paris climate agreement, which has been disavowed by President Trump.
Industry giants such as McDonald’s, Walmart and Levi Strauss & Co. are rallying behind climate action, announcing plans to expand their use of renewable energy and establish science-based targets to reduce greenhouse gases to help the nation reach its goals under the Paris pact.
“It used to be that you expected government to lead and then investors and business to follow,” said Mindy Lubber, chief executive of Ceres, a sustainability nonprofit that works with companies and investors. “It is completely turned on its head right now. The leadership on moving climate policy is coming from everywhere but the federal government.”
Corporate environmental efforts have been met with some skepticism, including questions of whether they mark an exercise in eco-friendly branding - greenwashing, as some call it - more than a true transformation in practices.
But business leaders argue that the scale of their operations is large enough to help achieve the goals of the 2015 Paris deal, in which President Obama promised to cut the United States’ emissions at least 26 percent below 2005 levels by 2025.
So far, nearly 500 companies have adopted science-based emissions targets in line with the Paris pledge, according to the global nonprofit Business for Social Responsibility.
A flurry of new ones came as the summit began. Tech companies announced commitments to reduce carbon emissions by running more of their energy-gobbling data centers with renewable electricity. Kaiser Permanente revealed a plan to shift to renewable energy that will allow it to become carbon neutral by 2020. Banks and investors publicized shifting money out of coal and into renewables and other low-carbon portfolios. Retailers and restaurateurs said they would work with suppliers to squeeze greenhouse gas reductions from farmers and manufacturers.
Proponents of such pledges argue that they are happening because there’s an increasingly clear business case for climate action. Companies are seeing more impacts to their operations and supply chains from extreme weather and other shifts driven by rising greenhouse gas emissions. They’re facing mounting pressure from consumers and investors to factor climate risks into their business decisions. In short, they’re realizing that tackling climate change, even if it clashes with U.S. federal policy, is good for business.
“Reputation really matters, and matters increasingly,” said Christina Herman, a program director for the Interfaith Center on Corporate Responsibility, a coalition of institutional and faith-based investors.
Some financial experts see in the corporate action a parallel with other politically controversial issues, such as same-sex marriage and immigration. Shifting public opinion has meant that some large companies have taken positions at odds with state or federal government - whether it’s to help their bottom line, generate publicity or protect their image with consumers.
Ironically, it was the Trump administration’s turn against the Paris agreement that spurred the American private sector to action, said Brian Deese, head of sustainable investing for BlackRock and a former Obama administration advisor on climate change. That includes large investors, who he said have shown growing interest in climate-friendly portfolios over the last 18 months.
