Ethical Performance
inside intelligence for responsible business


The business climate’s not changing quickly enough

October 2011

As humans, we’re in the lucky position of being able to rationalise. We can weigh up facts and make sophisticated, balanced decisions in pursuit of a defined outcome. But though we can and often do behave rationally, we are in essence non-rational as our choices are framed by emotions, expressed or otherwise. And therein lies the problem when we’re faced with dilemmas and choices on something as complex and challenging as climate change.

A media contact of mine put the point concisely: if we were rational, mankind would have acted on climate change years ago. But you can engage a group of people in a rational discussion of as many compelling facts as you like, but if they don’t want to accept them, they won’t. Essentially, he believes, the final decision is an emotional one.

Given that CSR is rightly concerned with measuring and assuring corporate ethical performance, this poses a tricky question over how CSR professionals should engage their less-than-enthusiastic colleagues. After all, if you can’t engage your CEO or chairman on an issue as crucial to the business as climate change, then what can you engage them on?

The desire to resist change is natural if yours is a successful business in a stable market. So, it is very positive that corporate America is accelerating the integration of climate change into its core business planning. Hopefully, this confirms a growing recognition that they ignore the issue at their, and our, peril. The problem is, the drivers for change in industrialised and industrialising economies are still too weak and corporate action too incremental if the challenge is to be properly addressed.

Unfortunately, it is not so easy for governments to have the same focus on long-term issues as even a business. The comments of Nick Robins, founding director of HSBC’s Climate Change Centre of Excellence, are instructive (interview, page 11). He said: “Pre-Copenhagen, the assumption was that industrialised countries would drive policy, that the science was sufficient incentive for governments to take action and that the carbon markets would be enough to solve the problem. None of those assumptions necessarily hold now. We believe there is a risk that industrialised countries such as the US are getting locked into high carbon economic models.”

If climate change is not threat enough for the West, then it is surely the rising power of developing economies that will be the real decider. They have the resources, talent and desire to forge growth in markets for new, sustainable technologies. Something has to give because if emissions are still on a rising trajectory beyond 2030, the demand and urgency for change will be at fever pitch, particularly if weather events intervene. As another pithy saying has it: “Once you get them by the balls, their hearts and minds will follow.”

Peter Batt | Global | Climate change

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