You know climate change is beginning to capture everyone’s
attention when two leaders with opposing political philosophies make compelling
points on the issue in different speeches. In London this past April,
committed conservative Lord Deben, spoke at the Church Investors Group
conference held at CCLA headquarters in the shadow of St. Paul’s cathedral. He
made the point that since the British were instrumental in bringing the
industrial revolution to the world, they had serious responsibility for cleaning
up the mess. He asked important questions: Why aren’t we developing
technologies that could be an answer to the carbon problem? Why aren’t we
working harder to develop massive batteries to store electricity from
renewables?
Three months earlier in an equally auspicious setting, American
labor union leader Richard Trumka, the president of the AFL- CIO, suggested an
answer to a few of those questions in a recent speech of his own at the United
Nations. Trumka said what is keeping powerful democracies like the United
States from acting more aggressively on climate change is lack of real
political will. People are afraid. He didn’t mean apprehension regarding next
year's super storm or the carbon problem. The fear is basic: change can and
does bring massive unemployment. No matter what, people don’t want to lose
their jobs. And it’s impractical besides. If climate change policies make
working people lose their livelihoods, it will undermine the political will to
deal with the problem constructively.
Having worked with companies and investors for 30 years, I know
both men are onto something. The climate conversation needs to be different to
spark any progress on climate change while getting more from companies and the
general public. More dire warnings won’t do it. Nor will inaccessible
scientific pronouncements.
We need three things to move the needle on this issue upon which
the future of the planet depends.
One, we need to deal with the overriding issue of fear.
Two, we need to devise a new way to measure what companies are
and are not doing on climate change – and if they aren’t responding to the
issue, demand change.
Finally, we need to research to pay for a worldwide transition
away from carbon fuel
First and most important, deal with the fear.
-- Scientists agree we created the carbon problem and we can fix
it. Most companies agree that something must be done. Most investors agree that
there are plenty of costly risks to future profits if we don't find solutions.
We all know there will be plenty of profitable opportunities if we find ways to
solve the problem.
We can’t keep demanding nations solve the problem of climate
change without the same energy and commitment to solving the problem of the
economic upheaval that such a transition will create. These are two problems
that need solutions- not one. And they are interrelated; we can’t hope to
achieve one solution without the other.
— We need to demand more of companies. I work
with investors who have been successfully pushing companies toward more
transparency for decades. Responsible investors are convinced that “we” are
doing our part by asking companies to recognize and measure and reduce their
carbon footprint. That's a good thing but unfortunately, it's not enough.
The questions must be different moving forward. A simple metric
with easy to understand questions applied to every company is a critical next
step. Questions such as: What resources are you spending on research for real
solutions to the problem of climate change? And, what resources are you spending
creating jobs that represent real solutions to the problem? No doubt many will
quibble over the definitions of the three "r's", resources, research
and real; and any reasonable definition is welcome. Ratios are always desirable
for comparisons so, revenues or market capitalization could be used as the
denominator. The sooner we ask these questions of all companies, the sooner
we’ll start to get answers.
While we work to figure out
how to avoid burning the unburnablecarbon, we need real money to pay for real research to figure
out how to put some of the 400+ ppm already in our atmosphere back and to
develop alternatives.
It is no secret that the way we live in developed nations
depends on generation of power that is capital intensive and our fuel largely carbon-based.
That doesn't help make the transition to new energy sources easy. Developing
nations are just beginning to access the energy intensive lifestyle we've
enjoyed. Solving this problem regionally is not an option because when it comes
to the carbon problem, our region is our planet. Both the livelihoods and the
lifestyle to which so many aspire were made possible by the carbon-based fuel
that drove the industrial revolution.
Now it’s time to find alternatives that will be good for both
the planet and the economy. We need money for research into both. Doing one
without the other is not an option.
Difficult? Sure. But look at it this way. If Lord Deben and
Richard Trumka can agree on climate change, there is reason to hope.
