Corporations can't be 'greened'

It's time to recognise that corporations aren't capable of creating the change we need.

Sep 19, 2023

Image: Photo by Martin Martz on Unsplash

Capitalism won’t save us

Earlier this year the outgoing Energy Editor at the Financial Times, Derek Brower, declared that “Capitalism won’t deliver the energy transition fast enough … this isn’t a task for your favourite ESG-focused portfolio manager or the tech bros…. Governments, not BlackRock, will have to lead this new Marshall Plan…. Massive deficit spending will be necessary, not a new ETF”.

The honesty expressed in these words, from a flagship capitalist publication, was welcome precisely because so many of us - even in the climate movement - seem confused as to how we bring about the massive societal transformation we need. The clear-eyed view expressed by Brower encourages us to apply pressure in the right places: governments, not corporations.

There is an oft-used phrase that comes to mind whenever I see corporations put profit ahead of climate goals: “the definition of insanity is doing the same thing over and over again and expecting a different result”. An example of this was in June when the CEO of Shell dropped the company’s (already underwhelming) targets to reduce oil production every year for the remainder of the decade, in favour of aiming for higher profits. The very idea that the ability of the planet to sustain life rests on companies making and upholding environmental pledges is fraught to begin with.

Public corporations are a legal structure that exists to generate returns for their shareholders. They are not going to voluntarily reduce their profit or size: every time they are faced with making a choice between profits and the climate, they will (and do) choose profit. If we want greenhouse gas emissions to reduce, we will need far greater political and economic democracy at all levels of governance resulting in reduced power of corporations, or even de-privatising them, not simply hoping they will ‘do the right thing’. They won't, they literally can't.

Corporations can’t be ‘greened’

This quote by environmental activist and writer,

Max Wilbert

in this Green Dreamer podcast eloquently describes the futileness of people deferring their power as citizens in favour of hoping corporations will revert from being the problem to being a part of the solution:

In the original days of the environmental movement, it was based on confrontation with the nuclear industry, with the pesticide industry, with these multinational corporations and governments that have just been laying waste to our planet. And over the years, you can see this increasing collaboration.
And you can understand the rationale. You can understand why people feel the need to do that – because they feel like they can get inside the system and somehow make it less destructive. I can understand that impulse, but it hasn't actually worked. Everything is getting worse. Every indicator of ecological health is headed in the wrong direction. And so, if there was ever a time to sort of draw a firm line of morality and say, we can't do this “green” consumerism thing, we can't try to “green” capitalism, we can't try to “green” this industrial society that's laying waste to life on this planet and destroying any chance of a liveable future for our children or grandchildren. We can't reason with a system that has shown itself incapable of making morally righteous decisions. And there are many reasons for this.
Maybe you've read or seen the movie, “The Corporation”. Joel Bakan did this classic sociological analysis of a corporation and said that, you know, they're treated as persons under the law. So, let's psychoanalyze them like they are people. And what he found was that they're sociopaths. If you actually look at typical corporate behaviour in the world today and you think of them as a person, they're sociopathic. They have no conscience. They make decisions that harm other people repeatedly. They have no sense of remorse for their actions. They lie repeatedly. And so on. These are the actions of a sociopath. And these are the institutions that are in charge of our culture, that are running the show.
And we all know as well that the individuals within these corporations are largely replaceable. So even if you get a CEO who has an epiphany and says, I don't want to be a part of destroying the planet anymore, they're going to get fired and the board of directors is going to put somebody in their place who will run the machine, who will keep the death machine moving forward. So, these are really challenging realizations. It's not easy, but I think we need to grapple with these things. We need to get through that reality in order to actually come to grips with these problems and start moving towards real solutions. So many people get hung up on these earlier stages and don't really have the courage or the analysis to challenge these things.… This is all madness. Our society is driving life itself off a cliff.

It's helpful here to remember that 68% of executives in the US admitted that their company was guilty of greenwashing (58% of executives globally) and that none of the world’s top industries would be profitable if they paid for the natural capital they use. It is for this very reason that these industries invest a lot of resources in ensuring regulations are not enacted that would mean that they must pay for the true cost of their activities - it would literally threaten their survival. Additionally, industry groups have lobbied on behalf of corporations for decades, centuries even, to embed high-carbon infrastructure into society (see here, here and here). They now benefit prodigiously from the status quo that they mercilessly created and they will do everything in their power to maintain their advantage.

“We. Must. Urgently. Dismantle. Capitalism.”

These are the five words that degrowth academic and author of Ralentir ou Périr (Slow Down or Perish), Timothee Parrique, used to begin his keynote speech at the Change Now conference held in Paris in May of this year.

We must urgently dismantle capitalism because, if we accept - which many are starting to - that ‘green growth’ isn’t possible (see here, here and here), and that degrowth is needed to avoid catastrophic warming, then we must also accept that we cannot degrow our economies while maintaining capitalism as our dominant economic system. The old paradigm of ‘doing less harm’ while essentially leaving everything the same no longer applies. It’s untenable to reduce the size of the economy and permanently remove growth altogether – which for years has been used as an excuse to avoid addressing inequality directly – without removing the structures that created inequality in the first place. As ecological economist, Dan O’Neill stated at the EU Beyond Growth conference held in Brussels in May 2023: “If growth is a substitute for equality, then greater equality is also a substitute for growth and a much better choice for the environment and for society.”

Furthermore, we are currently living as if we have 1.7 planet Earths. Reducing environmental harm so that we are back within the limits of the planet – acknowledging that many people in the Global South are not currently meeting their needs and will need greater access to materials and energy - will require democratic decision-making to determine which activities cease, and which ones remain. Businesses aren’t going to voluntarily close their operations en masse because they have an unsustainable business model. Social pressure will be required to bring in regulations against harmful activities and to offer alternative employment to the people who currently work in these industries.

To achieve this transition, the first step is to decouple well-being from economic growth by:

Providing universal basic services (education, healthcare, public transport, housing, food and quotas of energy, water and internet);
A reduction in the working week to 3-4 days so that the remaining jobs can be shared;
A federally funded Job Guarantee so that anyone who wants to work can do so;
A minimum basic income for those who are unable or unwilling to work.

Once these are in place then we can democratically begin to reduce the industries that are causing environmental harm, such as coal, gas, oil, aviation, SUVs, single-use plastics, armaments, over-sized new house builds, etc while ramping up socially and ecologically necessary production: for example, solar, wind, ecosystem restoration, home insulation, electrifying buildings and improved public and active transport networks. If we understand that green growth is not a possibility, we must be honest with ourselves about what it will take. And it will not and cannot be achieved by the private sector alone.

What can we do instead?

What can we do that would be more effective than trying to get organisations of a certain legal structure to — against all the available evidence and in stark contrast to their entire reason for being — find a moral conscience?

First, we will need to move beyond the notion that we are merely consumers (i.e. focused on how we do/don’t spend our money) or merely ‘human resources’ (i.e. focused on how we do/don’t earn our money) and find our power as citizens. By this, I mean acknowledging that we are all a part of the current system, but that doesn’t prevent us from trying to change it, and using our energies to influence, organise, help change the narrative and shift the dominant culture. We will need to create space for political candidates to campaign on a platform that actually centres people and the planet and not just capital accumulation.

This could be any of a number of things including chatting with our mates about the systemic changes we need, forging ties with labour unions, organising general strikes, partaking in civil disobedience and direct action, using our voices in person and in traditional media and social media, holding town hall events, building local economic democracy, running for parliament, supporting someone who has science-aligned policies to run for parliament, working towards full decolonisation, creating community gardens and sharing libraries and other such initiatives that shift the culture towards sufficiency rather than consumption, and so many more.

Second, the proposed solutions to our ecological crises must match the scale of the problems we face, with our eyes always on the desired outcome. The time for incrementalism and “pissing around at the margins of the problem” are long gone. We need to do what we can to precipitate a ‘social tipping point’ whereby the status quo flips and systemic change is inevitable.

Environmental journalist, George Monbiot talks about this theory of change:

There’s an aspect of human nature that is simultaneously terrible and hopeful: most people side with the status quo, whatever it may be. A critical threshold is reached when a certain proportion of the population change their views. Other people sense that the wind has changed, and tack around to catch it. There are plenty of tipping points in recent history: the remarkably swift reduction in smoking; the rapid shift, in nations such as the UK and Ireland, away from homophobia; the #MeToo movement, which, in a matter of weeks, greatly reduced the social tolerance of sexual abuse and everyday sexism.
But where does the tipping point lie? Researchers whose work was published in Science in 2018 discovered that a critical threshold was passed when the size of a committed minority reached roughly 25% of the population. At this point, social conventions suddenly flip. Between 72% and 100% of the people in the experiments swung round, destroying apparently stable social norms. As the paper notes, a large body of work suggests that “the power of small groups comes not from their authority or wealth, but from their commitment to the cause”.

And how does George suggest we reach these social tipping points? He explains here:

So what do we do? We talk. As the climate writer Joe Romm argued in ThinkProgress this year, a crucial factor in the remarkable shift in attitudes towards LGBT people was the determination of activists to break the silence. They overcame social embarrassment to broach issues that other people found uncomfortable. We need, Romm argues, to do the same for climate breakdown. A recent survey suggests that 65% of Americans rarely or never discuss it with friends or family, while only one in five hear people they know mention the subject at least once a month. Like the media, we subconsciously invest great psychological effort into not discussing an issue that threatens almost every aspect of our lives.
Let’s be embarrassing. Let’s break the silence, however uncomfortable it makes us and others feel. Let’s talk about the great unmentionables: not just climate breakdown, but also growth and consumerism. Let’s create the political space in which well-intentioned parties can act. Let us talk a better world into being.

None of the above requires us to demand, hope, plead, wish, or pray that big polluting companies will suddenly find a conscience and do ‘the right thing’. Quite the opposite, it empowers us to demand systemic change in whatever way we can until the “politically impossible becomes the politically inevitable”.

We’ve tried ‘greening’ corporations for long enough, it’s time to try a different approach. One that might actually work.

Let me know what you think in the comments section - do you know of a public corporation that has has put the environment ahead of profit?

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