Like many of their compatriots in northern California, the workers of Silicon Valley have long trended liberal, especially on social and environmental issues. But what they weren’t known for was organizing around those politics —especially if it involved potentially clashing with their own companies, in which many own equity.
Yet on Sept. 20, thousands of workers at major tech companies like Amazon, Google and Facebook took to the streets as part of a worldwide climate strike organized by the 16-year-old activist Greta Thunberg. And their CEOs listened. Ahead of the demonstrations, Amazon CEO Jeff Bezos announced that the company would become carbon neutral by 2040, well ahead of the goals set by international climate diplomacy, while Google CEO Sundar Pichai trumpeted a package of 18 new energy deals he called “the biggest corporate purchase of renewable energy in history.”
Across the corporate world, from the cubicles of frontline workers to the boardrooms of CEOs, it’s becoming clear that acting on climate change is becoming a vital part of the mission of business today. Companies are getting the message not just from their employees and customers, but from the most powerful economic influencers as well. On Nov. 8, the Federal Reserve did something it had never done before in its more than 100-year history: it held a conference about climate change. At the Reserve’s San Francisco branch, Fed board members, climate scientists and economists discussed the effect that global warming would have on the labor supply, on the financial risk posed by climate change, and on the future of oil in a hotter world. The presentations were dry and technical—this was the Federal Reserve, after all—but the point could not have been sharper: climate change and the environment have become a central force in determining the future of the global economy, a force that will only grow stronger.
A few days after the Fed conference, an alliance of more than 80 companies with a market capitalization of more than $2 trillion, ranging from the chemical giant Dow to Duke Energy, backed a report outlining how the U.S. economy can reach net zero carbon emissions by 2050. When the Trump Administration on Nov. 4 announced that it was formally withdrawing from the Paris climate accord, the We Are Still In coalition of more than 2,000 major companies and investors—including major names like Walmart and Apple—responded by reiterating their independent support for the most important global climate agreement ever signed. A few days later, the CEOs of companies like BASF and LafargeHolcim took to Capitol Hill to press Congress on the need for climate action.
Beyond pledges and political action, corporations are making changes to their own business practices, both to minimize the future dangers of climate change and handle the threats that are already on the horizon. IKEA plans to remove all single-use plastic from its home furnishings next year, and use only renewable or recycled products by 2030. McDonalds announced the first-ever large-scale virtual power purchase agreements for buying electricity from renewable sources. In the United Kingdom, Burger King has gone so far as to pledge to stop giving away plastic toys with its kid’s meals.
While corporations have long trumpeted their sustainability projects, those efforts often had more to do with good PR than a good bottom line. What’s changed in recent years is that going green is becoming core to the way businesses do business, both for vital reputational reasons —inside their companies and outside of them—and to survive in a warmer world. According to a study published by Deutsche Bank in September, shares of companies perceived as environmentally responsible performed notably better than shares of companies that were not, in part because consumers are increasingly basing their purchasing decisions on environmental quality. “It is our most successful, innovative and agile companies that have a responsibility to lead on climate and sustainability because they have the greatest capacity to act in a transformative way,” Apple CEO Tim Cook said at a gala for the sustainability nonprofit Ceres in October.
At the same time, as climate change becomes an increasingly important issue—an August Pew Research survey found that the percentage of Americans calling global warming a major threat to well-being rose from 40% in 2013 to 57% this year—companies need to respond to their own workforces. In November more than 1,000 Google employees signed a public letter calling on their company to achieve zero carbon emissions by 2030, and cancel all contracts with fossil fuel companies. Earlier in the year more than 5,000 Amazon employees signed a similar letter addressed to Bezos, writing that “we believe this is a historic opportunity for Amazon to stand with employees and signal to the world that we’re ready to be a climate leader.” If those companies are ready to lead, it’s at least in part because they’re following their workers.
This is all happening at a moment when leadership is of any kind is sorely needed on climate change. Every week seems to bring more bad news about the state of the climate, and the horror the planet seems plummeting towards. This October was the warmest such month on record, and for the Northern Hemisphere, the summer as a whole was the hottest on record. For all the rapid growth in renewable energy, the International Energy Agency reported in November that the transition to cleaner power sources is still well short of what’s needed to meet greenhouse gas reduction goals, even as global carbon emissions hit an all-time high in 2018.
On the political front, President Donald Trump—aided and abetted by a Republican party that has been fully taken over by climate-change deniers—is reversing action on climate and the environment whenever possible, moves that are echoed by conservative leaders in countries like Australia.
Given the weakness of politicians and the hard nature of climate science, business has a role to play that goes beyond PR or even their own survival. Environmentalists are increasingly counting on corporate leaders to use their billions and their bullhorns to push for drastic action on climate change. Doing so can create what former U.N. Framework Convention on Climate Change head Christiana Figueres has called a “surround-sound effect” around climate change action, pushing politicians to do more at a time when political will is severely lacking.
While the corporate world has moved ahead of many politicians, a growing number of leaders and voters on the left are pushing for even more radical climate policies, as symbolized by the Green New Deal. But businesses still feel the tension between competing agendas. As much as they may recognize the need to address climate change over the long term, they still face intense pressure from investors and the market to succeed in the short term. The ultimate question is how far business leaders are willing to go on their own—and how far they can take the rest of us.
The False Dawn of Corporate Activism
For those of us who have been reporting on the climate crisis for years, what’s happening in the business world today has a very familiar feeling. The mid 2000s saw a burst of corporate interest in climate change, renewable energy and sustainability. Al Gore’s An Inconvenient Truth put climate change squarely in the middle of the global agenda, and while, like now, a Republican president in the White House stood in the way of climate action on the national level, corporations appeared ready to pick up the slack. Many of the same Silicon Valley investors who had made billions on software were ready to pivot to cleantech, funding innovations in renewable energy and biofuel substitutes for oil. In 2007 the venture capitalist John Doerr of the famed firm Kleiner Perkins moved himself and his audience to tears in a TED talk, as he talked about how scared his then-15-year-old daughter was about climate change, and how scared that made him. But business could help fix the problem, Doerr said, because “green technologies—going green—is bigger than the internet. It could be the biggest economic opportunity of the 21st century.”
That same year a group of major companies formed the U.S. Climate Action Partnership (USCAP), an alliance with environmental NGOs that called for the creation of mandatory, national carbon-reduction policies. This was significant not just because of what they were saying, but who was doing the talking. USCAP included fossil-fuel companies like the oil giant BP and the aluminum producer Alcoa. At the 2007 UN climate talks in Bali, which I attended as a reporter for Time magazine, the potential presented by groups like USCAP inspired far more hope than the negotiations themselves, which were largely blocked by the lame-duck George W. Bush Administration.
Once Barack Obama won the White House nearly a year later, it seemed that this would be the moment when—as Obama himself put it in a speech during the campaign—“the rise of the oceans began to slow and the planet began to heal.” After all, in the past, business had most often served as an obstacle to major environmental legislation like the Clean Water Act of 1972 or the Clean Air Act of 1990. If business and political power seemed in lockstep on climate change at the dawn of 2009, what could go wrong?
A lot, as it turned out. The financial crisis of 2008 devastated the global economy, and wrenched corporate leaders’ attention from the long term of climate change to the short term of survival. Along the way, crude-oil prices cratered, which helped kill nascent green innovations that would have been competitive in a world of $100-a-barrel oil. Forced to choose its legislative priority—while trying to keep the economy on life support—the Obama Administration prioritized a health-care overhaul over climate legislation. Obamacare ultimately became the law of the land, but after carbon cap-and-trade legislation squeaked through the House, it died in the Senate. Cleantech investment ultimately cratered, and by 2017—a decade after his moving TED talk—Doerr’s firm Kleiner Perkins had separated its faltering green-growth fund from the rest of its portfolio.
A New Generation Demands Action
Witnessing those years has left me a little skeptical when I see new claims that business is going green in a big way. And I’m not alone. In September, the consulting firm Accenture released a survey of more than 1,000 corporate executives around the world that drilled deep into their views on sustainability. The respondents reported that the two biggest factors motivating executives on sustainability were customers and employees—especially young ones. A 2018 survey of more than 500 tech workers by the cloud-based software giant Salesforce found similar results: 60% of respondents said that sustainability should be a “moral imperative” for their companies. “The younger generation is drawn to higher purpose and mission— ‘Why are we doing this?’” said Patrick Decker, the president and CEO of Xylem, a water-technology provider. “It’s not purely the profit motive.”
Still, more than half of the CEOs surveyed in the Accenture report said that they “face a keen tradeoff in the pressure to operate under extreme cost-consciousness while seeking to invest in longer-term strategic objectives,” including objectives around climate change. As Rolf Martin Schmitz, the CEO of the German electric utility RWE AG, put it: “Sadly too many people are only talking about it. What we really need is more action.”
Healthy skepticism aside, however, I’m convinced that this time really is different. For one thing, big money is driving the push for green business practices in a way that it never was before. In November the European Investment Bank announced that it would stop funding all fossil-fuel projects by the end of 2021, which could pull the plug on billions of dollars of natural-gas projects that were in the investment pipeline. In September, a group of more than 500 investors who manage more than $30 trillion in assets urged both policymakers and businesses to comply with the emissions-cutting targets set by the Paris agreement. In 2018 Larry Fink, the chief executive of BlackRock, the world’s largest asset-management fund, sent business leaders a letter demanding that they focus not only on profits, but on what they’re doing for society. “To prosper over time,” he wrote, “every company must not only deliver financial performance, but also show how it makes a positive contribution to society.”
If those holding the purse strings are speaking with one voice, the climate itself is chiming in. Climate change has long been seen as a problem for the future, and to a large extent, it still is. The carbon we emit today will linger in the atmosphere for decades, even centuries. According to data from the Carbon Disclosure Project, the world’s 500 biggest corporations face roughly $1 trillion in costs related to climate change in the decades ahead unless action is taken now and in the near future. Other studies have used computer models to estimate that global warming, if nothing is done, could cost the world’s financial sector as much as $24.2 trillion.
But climate change isn’t just a problem for tomorrow. Take the example of PG&E, California’s largest utility. In 2018, PG&E told the Carbon Disclosure Project that the rising risk of wildfire— partially due to the climate-driven effects of warmer and drier weather in the West—could cost the company as much as $2.5 billion. As it turned out, PG&E vastly underestimated those costs. After horrific fires in the summer of 2018, many of which were triggered by the utility’s downed power lines, PG&E had to file for bankruptcy protection and now faces some $30 billion in fire liabilities. This fall, PG&E had to preemptively put hundreds of thousands of Californians in the dark after it shut off power to reduce the risk of causing more wildfires. If the company doesn’t survive, it may go down as one of the first major corporate victims of climate change—in the here and now.
The point is that any company that fails to take the effects of climate change into account is failing its shareholders, and ultimately, the rest of the world. There’s a reason that climate and environmental issues were ranked at this year’s World Economic Forum in Davos as the most important risks facing business. As Apple’s Cook put it, “If you are an executive who has not developed an innovation strategy to address your impact on the climate, then you are failing in your duties as a leader.”
And lastly, employees are out on the front lines, pushing their bosses to stay honest on climate change in a way that simply wasn’t the case a decade ago. Smart companies will develop those strategies, both to hedge against the rising risks of climate change for their own business, and to minimize their own contribution to it, as citizens—and consumers—of the world begin to demand no less. But will that be enough? Many scientists would say no. In early November a group of more than 11,000 scientists from a variety of disciplines released a report warning that without massive energy efficiency and conservation practices—including efforts to essentially stop mining new fossil fuels—the world would not escape what they called a climate emergency.
A global environmental movement called Extinction Rebellion is pushing intense, even confrontational tactics—including shutting down a London subway line—to push for drastic carbon cuts. Those are aggressive, even existential policies that few major businesses would sign onto, which is perhaps what the teenage climate activist Greta Thunberg had in mind when she told reporters earlier this year, after being asked if any company was doing enough to tackle climate change, that “as it looks now, it doesn’t look good.”
The reality is that the massive shifts in energy use that will be required to avert potentially catastrophic climate change must come, first and foremost, by government policy. Businesses can help by creating the “surround-sound” chamber of support that Christiana Figueres cited, and most of all, they can help themselves, their shareholders and their customers by listening to their young employees and speeding the adoption of smart climate policies. The biggest impact that business can make, however—which is the same impact all of us can make—is by using all the influence it has to push elected politicians to make the hard choices needed to keep our future safe. From employees to executives, the business world is going green as it never has before, and that’s much needed. But if we’re going to survive, we need to go green together.
Bryan Walsh is the author of End Times, a new book about existential risk. He previously worked as a foreign correspondent, reporter, and editor for TIME for over 15 years. He founded the award-winning Ecocentric blog on TIME.com and has reported from more than 20 countries on science and environmental stories like SARS, global warming, and extinction. He was recently the launch editor of Medium's OneZero, a science and technology publication