On April 22, 1970, the inaugural Earth Day started an annual trend of marches, rallies, and various acts of environmental solidarity. From a truly grassroots movement, this day has continued to be a reminder to take care of the land that provides for us, for a better world that everyone can contribute toward.
When the business community caught on to Earth Day trends, it gave reason to pledge money to environmentally conscious organizations or host fundraising and volunteer events. Median cash giving by corporations to environmental causes increased 26% between 2016 and 2018, according to CECP’s Giving in Numbers.
The original marches and concert gatherings have evolved into embattled speeches from a 17-year old climate activist on the blunt reality of the current path we are on. Into companies highlighting their commitments to environmental goals in their corporate social responsibility reports. And into a letter from the largest asset manager saying, “climate risk is investment risk”, and that “Every government, company, and shareholder must confront climate change.” It appears there is alignment across stakeholders on the importance of addressing climate change as an issue that will have major implications on our future.
So, how do we fare right now?
At a recent business summit where a handful of CEOs spoke in honor of the 50th anniversary of Earth Day, their companies’ sustainability efforts, and their perspectives of the how business as a whole can progress, the audience was polled on whether it thought the environment was better today compared to 50 years ago. A significant portion of the audience responded that the environment is worse off today than 50 years ago. With a half century worth of vocal advocates, fundraisers, beach clean-ups, and the like, many believe we are in a worse position environmentally despite all the technological advances and corporate commitments.
Company executives at this virtual meeting highlighted their plans for reducing environmental impacts through alternative energies, renewable power, and lower carbon footprints, many of which were quite impressive. But another executive stated that the private sector has not done enough, calling on his peers for more ambitious goals in areas such as water, carbon, and plastic. He stated a few causes of the current hesitation to set grandiose goals, which include a lack of visibility and data, an outdated focus on increasing shareholder profits, and seductive incrementalism.
CEOs did echo each other’s sentiments on additional topics such as increasing fair shared value across operations and supply chains. Multiple speakers touched on government’s role in pricing carbon for the markets and perhaps taxing the laggards while rewarding the pacesetters. And overall, there was a focus on all stakeholders (employees, suppliers, customers, communities, and shareholders). Underlying all of these remarks was the notion of purpose, beyond profitability, to drive change. With 76% percent of companies changing their corporate purpose statement in the last five years (Source: CECP Pulse Survey, October 2019), we know companies are beginning to rethink how their purpose can not only influence environmental and sustainability efforts, but also their performance in all aspects of their business.
On various platforms, leaders have forecasted that the Covid-19 pandemic will accelerate action on societal issues that have global implications. One CEO at the virtual business summit said, “This pandemic is the ultimate sustainability event.” We have seen reduced pollution and emissions from quarantines and the economic shutdown, but more so the link between environmental, social, and governance (ESG) issues has become even clearer. In real time we are witnessing the impacts of the world’s response to health concerns on environmental factors. This is just one example of many of how ESG topics are intertwined.
Through their environmental commitments, these companies will see benefits in other social and governance areas:
Walmart’s Project Gigaton hopes to bolster supplier and global value chain efforts to avoid on billion metric tons of greenhouse gas (GHG) emissions by 2030. With over 2,800 suppliers, they are incentivizing their supply chain to increase their sustainability efforts.
EILEEN FISHER, in an industry highly criticized for their impact on the environment, uses B-Corp framework to track and measure sustainability outcomes as their Social Consciousness Team evaluates environmental impact (among other areas, such as Human Rights) across the company.
By 2030, PSEG, New Jersey’s leading source of carbon free energy, plans to eliminate 13 million additional tons of C02 equivalent emissions.
As consideration for Mother Nature gains traction beyond one day, businesses will continue to play an integral role in what the future of planet looks like. In 50 years, will we be able to say that the environment is better off than today? Greta Thunberg might tell us that if we do not change now, we won’t be able to answer that question.