Keeping politics out of companies’ climate action
Simon Glynn and Savannah Coomber
March 2023
Download the research paper
Corporate climate action will succeed and sustain itself best if politics are kept out of it – but the way many companies are tackling climate action is politicizing the issue.
Climate action is not inherently ideological, but it becomes so when mixed with issues that are. In our latest Zero Ideas research paper, we propose a model that separates climate action, together with similarly existential issues, from the many societal issues on which companies may choose to take a position. This separation is critical in protecting climate action from the emerging backlash against stakeholder capitalism.
The world does not have a universal set of values; one person’s social justice is another person’s woke capitalism.
The risk from stakeholder capitalism
In the pursuit of stakeholder capitalism, many companies are inadvertently helping to make climate action ideologically political. But because climate action depends on near-universal participation at speed, it cannot succeed as a political project: it is in-conceivable that the world’s societies could converge on any political consensus of the required depth in the short time available. Already, we are beginning to see signs of a backlash – against ‘ESG’ and against the idea of corporations determining what citizens should or should not do. Businesses that thought they were doing the ‘right thing’ are subject to challenges from dissenting stakeholders – customers, employees, investors, regulatory authorities.
The world does not have a universal set of values; one person’s social justice is another person’s woke capitalism. The societal stance that companies have taken on climate, as part of their embrace of stakeholder capitalism, is provoking reactions that are putting our vital progress on climate action at risk.
Is there another way? Can companies act on climate change without taking such a stance? Can we keep politics out of companies’ climate action?
This research paper explores the politicization of the corporate climate agenda and what it means for effective climate action going forward. First, we examine why this politicization matters, where it comes from, and whether it is inevitable. We show how climate action is not inevitably political; yet, when we examine existing models and practices in search of an apolitical approach, we don’t find one. But we do find well established and useful building blocks. From these, we propose a model for how to manage a company’s over-all sustainability/ESG agenda in two separate domains.
A conceptual model to insulate climate action and other apolitical necessities
A model to protect climate action
The first domain comprises societal issues, together with local environmental issues, that are often to do with fairness, access or redistribution – these are rightly and inherently political questions, related to people’s welfare. Progress on these issues would make the world a better place, under most ethical perspectives, but corporate objectives can be legitimately contested by people with different interests. Failure to make progress would result in a missed opportunity for societal development, but it would not threaten the way we live today. Most of the UN’s seventeen Sustainable Development Goals sit in this domain.
The second domain comprises the few issues where action is so urgently, universally and existentially needed that it becomes objectively necessary, regardless of your political persuasion. Specific approaches can be legitimately contested, but the objectives cannot. Failure to make progress on these issues is not about missing opportunities; it would stop us from continuing to live the way we do today. Getting to net zero is in this domain – but so are some other, critical issues where we are using up our natural resources at such a rate that the shift from depletion to regeneration is similarly urgent and existential. Climate change is not the only vital planetary boundary that is under immediate threat.
Today, a company’s approach to climate typically crosses both these domains. Climate action is not inherently political, but it becomes political when we mix it with issues that are: redistributive questions within the climate context (a just transition, climate justice), and adjacent issues in the broader spectrum of SDG goals or ESG risks. By treating climate change as one strand of ESG, and as just one of the UN’s 17 Sustainable Development Goals, we conflate it with social issues that are pro-found societal ambitions but are inherently political choices.
Our model offers a way to distinguish the most essential climate action – together with the select other actions that share its objective necessity – from actions that are inherently and rightly a political choice. This distinction may prove vital in protecting the actions we all need, from the subjectivity and ideological tensions of competing political agendas. If ESG reporting and investing were to make this distinction, it would resolve the political tensions now threatening the whole approach to sustainable investing.