04 March 2014

Will Corporations Lead Governments in Addressing Climate Change?

Today, Sir Richard Branson wrote an interesting piece in which he sided with Apple CEO Tim Cook. Conservative stockholders have recently criticized Cook for pursuing sustainability programs and his response was to advise them to get out of Apple stock. Branson seconds this sentiment, adding that it is not just profit that drives corporations but purpose.

In Galileo's time, the laity put more trust in priests than scientists; in our time, voters put more trust in politicians than scientists. People distrust scientists because they don't understand them; priests and politicians are easier to believe because they speak in a language that doesn't require us to think hard. By contrast, businesses are used to thinking rigorously about issues, which gives them a real advantage over Congress in dealing with reality.

I've written before about how the popularization of entrepreneurship is something that will transform the corporation. As employees become more entrepreneurial, control over the corporation and the definition of policies will be dispersed more broadly within the corporation. (The corporation will be democratized in ways that parallel the transformation of the church and state centuries earlier in the West.) Senior managers in one country might feel blase about policies that negatively impact employees or residents across the globe. As employees throughout the corporation have more power to define policies, they are likely to put as much value on their own air, water, and climate as they are profits. Management here may not be concerned about habitats there but employees everywhere will be concerned about habitat everywhere. (And, of course, given the dynamics of climate change, everything going on over "there" are just as likely to impact us 'here.")

Corporations may not be people but they are comprised of people. People within a corporation are as likely to care about the earth as people within a school, park, shopping mall or city hall. As more people get to shape corporate policy, it should benefit more people. Churches became better when power was dispersed from the popes to the people. Nation-states became better when power was dispersed from monarchs to voters. Corporations will become better, too, when their power is dispersed from CEOs to employees. And that's already happening as decisions become too complex for any leader to keep pace with.

Sir Branson has called our attention to this before: he thinks that corporations will take the lead on addressing climate change. I think he's right. The issues around climate change revolve around business practices and business is - of course - the domain of the corporation.

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