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David Kroodsma

David Kroodsma

Posted: December 1, 2010 01:31 AM

Cross posted on Hub Culture.

On the opening night of COP16 (the 16th U.N. climate "Conference of the Parties) in Cancún, Mexico, I sat in a hotel conference room and listened to the President of Mexico, the CEO of Coca-Cola, the CEO of Dow Chemical, the CEO of Duke Energy, and the CEO of FEMSA (Mexico's largest beverage distributor) elegantly and persuasively argue:

  1. Economic development and fighting climate change are not mutually exclusive.
  2. Businesses want to act.

They rattled off talking points--Muhtar of Coca-Cola: "People, Planet, Product ..." Jim Rogers of Duke Energy: "If Duke Energy were a country we'd be the third largest supplier of clean energy in the Western Hemisphere." President Felipe Calderón: "We have cut deforestation by fifty percent ... In the past it was developing versus developed countries ... we now believe there is a common responsibility..."

Charlie Rose, the moderator for the panel (the panel was just the CEOs--president Calderón left after his speech), threw up his hands and asked: "If all of you are on board, why haven't we moved farther?"

It is a good question. If fighting climate change really is good for business, why do the commitments of the Copenhagen Accord fall significantly short? It is estimated that the emissions cuts required by the Copenhagen Accord should be fifty percent greater if we are to have any chance of keeping the earth from warming more than two degrees Celsius. And if fighting climate change really is good for business, why has the U.S. failed to pass climate legislation?

Unfortunately, I didn't find their answers to this simple question as hopeful as the talking points. Jim Rogers of Duke suggested that we were not forward thinking enough: If we invest in clean technology we would create economic growth, but our politicians are stuck in election cycles. Andrew Liveris of Dow Chemical made confused and cryptic statements about "cap and trade" versus a carbon tax. More interestingly, though, the CEOs actually appeared visibly upset and frustrated that governments weren't acting. The question upset them because they are upset: they actually want climate legislation.

Why do these companies support action on climate change? The commitment of the CEOs goes beyond what would be needed just for marketing or "green washing." Dow Chemical is much larger today than in 1990, but, through an aggressive effort, they have cut carbon dioxide emissions by 30 percent. Coca-cola is attempting to reduce emissions from all of its first world factories by five percent by 2015. Duke Energy lobbied the government to ask for a price on carbon dioxide and also pulled out of the "American Coalition for Clean Coal Electricity." The job of these CEOs is to maximize the value of their companies--not save the planet. And while they are not cutting pollution as much as they could, they are doing much more than most companies. Why?

The only answer that made sense to me is that all of these companies are in "for the long run." All of them are old companies with strong brands that need to plan decades into the future. They know that climate change is real, that action is needed, and that there will be a price on carbon at some point in the future. When Duke Energy builds a power plant, they know it will be there for forty years--their financing requires that they know how expensive it will be to emit carbon in future decades. Dow Chemical is over a century old, and the company understands how new technologies can drive growth. They also believe that they can produce the technologies to slow climate change. Coca-Cola and FEMSA (FEMSA is the largest beverage company in Mexico and Latin America's largest distributor of Coca-Cola products) are global companies known all over the world; they have to respond to public sentiment to protect their brands, and they know that people will increasingly want sustainability. The CEOs are making a business decision to act on climate change.

Somehow, we must convince the rest of society--our leaders, the other businesses, and even ourselves--that we are all on this planet for the long run.

After the panel discussion, I spoke with Aimee Christensen, the CEO of Christensen Global Strategies, who helped convene this event and also a number of other business events later in the week. I also interviewed Bryan Jacobs, Coca-Cola's global director of energy efficiency and climate protection, and Doug May, Dow Chemical's Vice President of Energy and Climate Change. You can watch their explanations below.

 

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