Most Americans want Congress to take action on climate change. But Congress doesn't seem to be up to the job.
Fortunately, many business leaders understand the enormity of the challenge and are taking it on. Corporate interest began to ramp up around 2010, after a House-passed greenhouse gas bill died in the Senate.
At that point, a growing flow of reports from financial institutions warned of the economic consequences of inaction, Time magazine’s Justin Worland wrote recently. “And key voices in the business community—from Michael Bloomberg to Bill Gates—took the message on the road, telling CEOs to take climate change seriously.”
In late 2015, a group of business leaders showed up at the Paris climate summit to talk with government officials. “The result,” Worland reported: “CEOs declared their commitment to reducing emissions, and the final text of the Paris Agreement created a formalized framework for involving private companies in the official U.N. process.”
Then Donald Trump landed in the Oval Office. The new president announced that he would take the U.S. out of the Paris Agreement. Within hours, 20 Fortune 500 companies declared that they were “still in” the global climate deal and would cut their emissions in hopes of keeping the U.S. on track. By the time Trump left office, more than 2,300 American companies had joined the coalition.
In November 2021, when Worland walked around the Scottish Events Center at the most recent UN climate conference, “it would have been easy to forget that the conference was ostensibly for government officials. An attendee could easily spot, among the 40,000 attendees, high-profile business leaders mingling in the hallway. And by many accounts, the most significant news involved the private sector. Six major automakers joined with national governments to declare that they would produce 100% zero-emissions passenger vehicles no later than 2035. A group of financial institutions representing $130 trillion in assets committed to aligning its investments and operations with the Paris Agreement.”
Mark Carney, United Nations special envoy for climate action and finance, leads the Glasgow Financial Alliance for Net Zero (GFANZ), which represents more than $130 trillion in assets. He recently told Axios’ Andrew Freedman that his network has been focused on turning commitments into action. "Governments haven't been moving fast enough. In fact, I would argue that governments are now lagging the corporate sector and certainly lagging the NGO and activist sector in truly taking the problem as seriously as it needs to."
The Biden administration is keenly aware of the importance of business involvement. We “need to accelerate our transition” off fossil fuels, said Brian Deese, director of the president's National Economic Council. “And that is a process that will only happen if the American private sector, including the incumbent energy producers in the United States, utilities and otherwise, are an inextricable part of that process—that’s defined our approach from the get go.”
In an April 18 letter to Michigan Governor Gretchen Whitmer, 15 major businesses with operations and employees across the Great Lakes State wrote: “As major businesses, employers, and consumer brands in Michigan, we write to express our support for the transition to a carbon-neutral economy by 2050… Climate change poses a significant risk to our businesses, threatens the competitiveness and livelihoods of our supply chains, and impacts the communities in which we operate. Because of these risks to our businesses, consumers, and employees, we view climate action as a top priority for Michigan and we offer our support for statewide strategies that will achieve carbon neutrality by 2050.”
Investors are increasingly conscious of the threat posed by climate change. BlackRock, with $10 trillion under management, is the world's largest asset manager and influences the financial sector's wider climate approach. "[W]e anticipate that by 2030, at least 75 percent of BlackRock corporate and sovereign assets managed on behalf of clients will be invested in issuers with science-based targets or equivalent," the firm said recently, compared to 25 percent today.
Business Roundtable represents the CEOs of American companies with 20 million employees and more than $9 trillion in annual revenues. “Unchecked,” the group maintains, “climate poses significant environmental, economic, public health and security threats to countries around the world, including the United States. While the United States has made significant progress toward reducing greenhouse gas emissions as a result of private sector innovation and supportive state and federal policies, the existing patchwork of federal and state regulations, tax incentives, subsidies and other policies is inefficient and has negatively impacted the long-term investment strategies of many U.S. companies by creating regulatory uncertainty.”
Of course, amidst what The Washington Post’s Douglas MacMillan called “a tsunami of environmental pledges,” there is concern about insincerity and exaggeration, or greenwashing. Claims should not always be taken at face value.
Many business leaders, like thousands of economists, have urged Congress to put an honest price on carbon emissions. Financial Times columnist Tim Harford wrote, “It has been encouraging to watch the world finally start to mobilise action on climate change — and even more encouraging to watch the rapidly falling costs of solar and wind energy. A carbon tax would help to push this clean energy revolution forward — and into the decisions each of us makes every day.” He's right.