The business of climate change

Friday saw the announcement by a coalition of 150 of the world’s largest corporations, including sectoral giants like Nokia, Nike and BP, that they would not just accept but encourage a legally binding agreement on global carbon emissions.

Given the sustained opposition of large sections of the business community to previous efforts at carbon-reduction – first questioning the validity of the science, then the compatibility of action with economic growth – this renewed championing of the climate change agenda appears to represent quite a sea change. So what are we to make of it?

An interesting place to start is the signatories’ stated reasons for participation. Prince Charles, whose Corporate Leaders Group on Climate Change led the statement, sees their motives in classic precautionary terms:

“If I have grandchildren one day, I could not bear it if they asked me: ‘Why did you not do something when it was possible to make a difference?’ These business leaders have asked themselves that same question and have had the wisdom to recognise that we are doing this for those who come after us.”  

The group’s statement, on the other hand, presents a more economic case for action. Binding regulation is needed to “provide business with the certainty it needs to scale up global investment in low-carbon technologies.”

These two statements sum up the problem of disaggregating motives in business environmental strategy. If business conscience has suddenly been awakened by visions of future generations huddled in caves on mountain tops, why do they need new regulations to do something about it? After all, it is the technological innovation of business that makes such regulations feasible, not the other way round. At the same time, new regulations will undoubtedly impose costs on signatories to the statement with no interests in renewable energy, so if they don’t have some genuine care for the environment, why sign?


The answer can’t be that it’s all elaborate PR – corporate social responsibility “greenwash” –  because the regulations demanded are binding and effect all firms. Nor should we be deceiving into thinking that money has suddenly developed a conscience. Rather, this should be seen as what Antonio Gramsci termed a “strategy of accommodation” on the part of business.

Corporations occupy a hegemonic position in national economies through their economic power, proximity to governments, and ability to convince citizens that the goals of business are the goals of the population at large. This final condition is achieved through emphasising their central role in the creation of employment and establishing their brands as benchmarks of good practice. In this way, business gains its legitimacy. Clearly then, a growing body of scientific literature and political polemic that paints unfettered corporate behaviour as the antithesis of sustained economic well-being undermines this legitimacy, and so threatens the overall hegemonic position of business.

In this context, the adoption of environmentally responsible corporate positions should not be seen as diversionary hot air; rather, it is political and market response to a changed normative environment, absorbing the evolving demands of consumers in such a way that corporate and public goals remain aligned. This represents a genuine suffusion of the environmental agenda into the economy: it is quite possible that real change will result in the behaviour of business in ways that tangibly benefit the environment. But it will not be because firms have become moral; they recognise the power of the environment in the public imagination, and the importance of that imagination in their own future security.

Moreover, in engaging with the environmental debate, business has the capacity to shift its terms in a market-friendly direction. Where business was the environmental problem, now it is the solution. The idea that the technological creativity of business is the key to solving our predicament; that the best remedy for carbon-reduction is to cap-and-trade; that growth does not have limits but can be continued ad infinitum if made sustainable; all these notions capture the integration of environmentalism into capitalism. These are not fig-leaves for polluting business-as-usual, but the progeny of the strategic accommodation of environmentalism by business into its forward strategy.

Despite their apparent contradictions, both the stated intentions of the Prince and the wider signatories were therefore true. The Prince in recognising the power of the environmental agenda over business activity; the others in stressing the necessary accommodation of business by the environmental agenda. In sum, business environmental strategy does confer public goods, but at its source remains a very private power.


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