We all know that big business damages the environment, but get this: the carbon emissions of Wal-Mart are close to those of Croatia, a small eastern European nation. And despite the near-constant presence of global warming in the media, very little has been done to prevent its potentially disastrous effects. According to Genevieve Patenaude in “Climate class for business schools”, it’s because efforts have been directed at the public. She suggests that we instead focus on the future business leaders, since companies contribute a large amount of greenhouse gases. The thing is, we can’t force businesses to care, especially if it isn’t profitable. We need to solve the problem by creating strong, long-term legal policies that businesses can work within, not by giving business leaders more information and hoping that they make the right choices or by continuing to rely on the efforts of individual citizens.
Before we can ask how to solve the problem, what exactly is the issue with carbon emissions? Carbon emissions, which mainly come from burning fossil fuels and deforestation, lead to global warming. In a 2009 study at Concordia University, it was found that there is a direct, linear link to the total amount of carbon emitted and the increase in global temperature. To be specific, one tonne of carbon dioxide, emitted over any amount of time, results in a 0.0000000000015 increase in world temperature. And we’ve already emitted about a half trillion tonnes since the start industrial revolution. So, unless we want to see global temperature increase, water levels rise, and coasts destroyed, we have to solve this problem and cut down on carbon emissions.
For the last couple of decades we have been hearing calls to change our ways and reduce our negative environmental impacts. But, so far, the attempts made to encourage change—most of which are directed at the individual—have been fairly ineffective. There’s pressure to buy a hybrid car, to cut down on electricity, to recycle, and to buy local products. But for a lot of us, making some of these changes can be expensive or inconvenient, and the dedicated attempts of a few people won’t make up for the apathy of the majority—which only decreases the chances of the average person making a change. If my spending extra money for organic vegetables from local farmers will hardly make a difference on a global scale, why shouldn’t I just buy the cheapest ones at my local supermarket? Why shouldn’t I keep using an old, gas-guzzling truck instead of looking for a new, more efficient car? It’s these attitudes that lead us to look for change in the larger producers, businesses and nations.
Unfortunately, national and international policies have been ineffective as well. A key example is the climate policy created by the European Union, which has been called "grossly distorting and expensive” by economist Dieter Helm. Instead of focusing on cutting down consumption of fossil fuels, it tries to cut down on production. While the doesn’t sound so bad at first, it means that Europe can meet these objectives by relying on overseas energy production, which would most likely increase global carbon emissions due to the extra shipping and less efficient production techniques in developing nations. The policy also relies on an inefficient carbon permit trading scheme, and alternative energy sources that are still too expensive and not yet well developed. Overall, it seems unlikely to meet its goals or make any significant change in carbon emissions.
Since these current attempts haven’t worked, it’s clear that we need to find a different solution, and Genevieve Patenaude argues that the best one would come from businesses. According to her article in Nature, the amount of greenhouse gases emitted by one large company is often close to the amount emitted by one small nation, as shown with Wal-Mart and Croatia, and so we can’t ignore the role of big business. Instead, she insists that we must target business students, the future leaders of these companies, and integrate classes on climate change and sustainability into the business curriculum.
But why would targeting business students work any better than previous attempts? According to Patenaude, one important reason is that “a more effective way of transmitting new ideas is through discussions with near peers”. This means that business students, which are in the same social and educational group as climate researches, would be more receptive to these ideas and more likely to take action than an audience of the general public. In addition, many companies are looking to profit from becoming more “green”, and so the information can be valuable on a business level as well. By reaching these future business leaders before they graduate from an MBA program, they would likely be more open to working with climate researches and making the changes needed to cut down on their carbon emissions.
While Patenaude offers a few examples of where business and environmental research have combined, she explains that there is very little mention of climate change or global warming in both business publications and the curriculum of most business programs, indicating that for the most part these fields haven’t been working together. Her suggestion is to follow the lead of Yale’s Center for Business and the Environment, and create programs where the two fields can share knowledge and work together to make a difference. Or, at the very least, give climate change a larger role in obtaining a business degree.
Here’s the issue: we can teach business students about climate change and sustainability, but we can’t force them to take action. From my experience as an undergraduate business student at NYU Stern, profit is the main concern, not ethics. The majority of first-year students had already decided on majoring in finance, hoping for a career on Wall Street, but most had no reason for it other than the pay. At the end of a lecture on sustainability and how it can be profitable, I heard a fellow student declare, “Finally it’s over, I’m so sick of this liberal bullshit” when no politics had been nor needed to be involved in the lecture at all. And, in numerous debates and discussions, I saw an insistence that business had no responsibility to society other than to bring in as much profit as possible.
Of course, these were undergraduate freshman, not MBA students, and Stern may not be typical of business schools; but it’s not just me that believes it’s not so easy to get through to business students. A recent article in the Wall Street Journal discusses ethics oaths in MBA students, specifically stating that they aren’t enough when it comes to keeping business practices ethical. Despite promises to behave morally, and programs in leadership and ethics, scandals continue to exist in the business world. Good intentions and few classes haven’t been enough to stop unethical behavior, and so they’re not likely to spur a major change in attempts to reduce carbon emissions.
The truth is that while a business might want to make changes, it first has to consider if it can afford to. According to a survey from the University of Waikato in New Zealand, during a recession—which is when profit matters most—small businesses are much more likely to cut down on sustainability practices. So, while they may love the idea of going green and preventing global warming, in the end it is money that counts for more. Overall, the number of businesses in New Zealand that were becoming more sustainable during the recession decreased, with increased sustainability efforts coming mainly from larger businesses that were already centered around being environmentally friendly. Other businesses were more concerned with simply “trying to survive.”
Even among the businesses that can afford to become more sustainable, we aren’t seeing much change, and this may be because there’s little legal motivation. A survey described in The Independent indicates that the problem is, specifically, in the climate change policies that nations have adopted. According to the article, climate change concerns do affect how most companies run their businesses, but the policies put forth by the government are not encouraging any real change. Emissions trading schemes, a strategy often considered in climate policies, was seen as unfavorable and ineffective by businesses, while regulation was seen as the most effective. But, clearly the level of regulation needed hasn’t been achieved. In fact, under the current policies, businesses responded that they didn’t feel comfortable making any long-term plans to combat climate change.
The way to solve the problem is to give businesses what they’re asking for: long-term, government regulated policies that they must work within to reduce carbon emissions. When it becomes a legal issue, companies no longer have the option of not caring, and executives feel more comfortable making the changes that they need. They’ll know that if they do center their business plan around meeting government objectives, they won’t need to change it shortly after to meet the requirements of new regulation. And, getting the government involved makes sustainability less optional; it forces even the companies without the good intent to reduce emissions to cut down on carbon consumption. In addition, it could create rewards for the businesses based on their emissions—such as tax breaks for sustainability uptake—that would make cutting emissions more affordable.
And, of course, these legal policies would need to apply to the nations as well. Instead of focusing only on corporate emissions, the bills would have to also provide a plan for cutting fossil fuel consumption by citizens and government agencies. This could include anything from making alternate energy sources more accessible, to gas rationing, to investing in more public transportation. Or, it could involve any other policy that would lead people to decreasing their carbon footprints. The important part is for there to be something that motivates even those that are reluctant to change. If governments throughout the world can create strong policies that really encourage businesses, and entire nations, to change, then we’ll begin to see a noticeable reduction in greenhouse gas emissions and real progress towards preventing global warming.
Patenaude, Genevieve. “Climate class for business schools.” Nature 466, 30 (01 July 2010). Web. 13 Oct. 2010.
Image: Nature “Climate Class”
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