Leaders of the most powerful and influential companies in the world are calling for climate action. Should the rest of the global business community take notice?
Sundar Pichai, chief executive of a small startup called “Google”, wrote an op-ed piece in the Nov. 2020 edition of The Economist calling to focus, in his words, “our generation’s most profound challenge”.
What was the topic, you ask? Addressing social inequality? Reigning-in artificial intelligence to prevent a sentient takeover of the human race? Federal policy extending Taco Tuesday to all five days of the workweek?
Our most pressing challenge, he claims: climate change.
Pichai strives to show the world that a “100% carbon-free electric grid is not only possible but economically viable.” He claims Google has already eliminated its carbon legacy using offsets. He also committed to operating all data centers and Google campuses across the globe on carbon-free energy by 2030.
Can we dismiss Pichai as some do-gooding, tree-hugging Silicon Valley millionaire-turned-philanthropist? OK space-cadet, come back down to the rest of us living here in reality!
Why would the leaders conducting the world’s largest companies pause to make a stand in the name of climate solutions? Why would they take it one step further to place a call to action to the business community in an international publication?
Pichai, for example, has about 100,000 problems to ponder on a daily basis. Google isn’t in the business of selling climate solutions, or Mad Max-themed underground bunkers. What’s his angle?
Like any great business leader, he’s not only thinking of today. Pichai and global business leaders incessantly scan for the distant asteroid-pummeling-towards-earth threats to business and global stability. They must live in a future reality most of us can’t imagine.
As society’s futurists, corporate titans have pulled the fire alarm for climate action. These are corporate titans with the heftiest global capital reserves and revenue in the world.
Shouldn’t we take notice?
Supporters of the predominant form of mixed-economy capitalism exercised by the United States may argue “If climate change is such a big deal, then the government should step in to address market failures. Leave businesses out of it. We’re here to make money! #AdamSmith”
The truth is, governments are ill-equipped to create solutions to avert catastrophic impacts from climate change on their own. By design, they lack the resources and nimbleness to act at the scale and urgency required.
Pichai notes the Global Covenant of Mayors, representing 10,000 cities and local governments, are heeding the call to work towards a resilient and low-emission society. However, research shows less than 20% of cities outside of western Europe have the time, resources, and data to meet their climate commitments to the Paris agreements.
It doesn’t take a tech executive to translate that 20% is not going to cut it.
As gatekeepers of capital and drivers of innovation, the global banking and business communities are well-positioned to lead the charge for climate action.
Historically, we celebrates the triumphant public-private partnership models used to address the most pressing societal challenges in modern history. Most memorably, wartime government-industry partnerships enabled scaled manufacturing to defeat the Axis powers during WWII. More recently, global cooperation led to expedient coronavirus vaccine development, approval, and deployment. Other notable U.S. mentions include the Space Race and the Interstate Highway System. These groundbreaking initiatives all required massive public-private coordination.
The benefits of an orchestrated effort to tackle climate change are as evident as a sun glare bouncing off a solar panel.
The five major, highly successful U.S. tech companies (FAANG) recognize the business case for climate leadership and action.
If Google, Amazon, Facebook, Apple are investing in renewable energy for zero-carbon operations, shouldn’t the rest of the business community be paying attention? In just the past decade alone (2010 – 2020), we’ve witnessed a reduction in wind and solar costs of 70% and 89%, respectively! (Source: Forbes)
Google is challenging businesses that once considered renewable energy too expensive or far-fetched to look through a fresh lens. As John Maynard Keynes quipped: “I change my mind when the facts change. What do you do?”
With the costs of renewables falling like a spaceship entering orbit, can companies afford to pass on the opportunity to lead?
Going to Plaid
As the new decade shifts into hyperspeed, business leaders must consider their legacy in a post-covid economy. Is this the year we emerge from the pandemic’s ashes to build a sustainable world for future generations? Will we be proud of the legacy stemming from today’s decisions?
Or will we find ourselves in 2030 pondering our inaction amidst the screaming alarms?
It’s a great time to be alive to address these questions. And we have promising news: We have the technology to act today. The big question lingers: Is the business community ready to lead the charge?
About the Author: Alex Kaufman is a science communicator, clean energy specialist, sustainability nerd, professional engineer, travel enthusiast, and resident of San Diego, California. When not advising clients, you can find him cycling, hiking, reading, spending time with loved ones, or planning the next big adventure. He is open to speaking engagements. Contact him at email@example.com.