• Sustainability

It’s a New Day in Washington.  What Will Business Do?

November 21, 2020

• carbon footprint
• climate change
• Ford Motors
• GM
• nature based solutions
• net zero carbon emissions
• renewable energy
• sustainability

By Monica Medina, Co-Founder and CEO, Our Daily Planet

 When it comes to climate action, conservation, and environmental justice, the election of Joe Biden and Kamala Harris will bring about a marked change in the federal government’s approach to these issues. Given that major environmental legislation will be hard to achieve in Congress, much will fall on the administration to do by executive action under the laws on the books.

As an environmental lawyer, I can tell you that our environmental laws are strong — some of the best in the world, in fact, to address climate change and other pollution.  They can be effective even now fifty years after their passage, despite little significant amendment in decades. They still can do the job as is, with smart regulations developed in an open and transparent process.  However, these are only words on a page without effective implementation by agencies. The good news is that by taking a whole of government approach, with an experienced team of people in place, the agencies will be in a good position to try to do just that and make up the ground that was lost during the Trump years. 

But, there is one factor that could stand in the way of progress.  The new Biden administration’s success will be shaped greatly by the regulated community – by large multinational corporations, small businesses and other stakeholders like unions and environmental organizations. The tools of government are only as good as the public’s willingness to accept and abide by them – to work with regulators who are writing the rules to make them effective and to then comply.  These environmental laws are no different than mask mandates or vaccinations – the more people resist them, the less effective they are, and that causes a downward spiral in which everyone loses.  Businesses large and small must be part of the way ahead.

There are some hopeful signs that the new Biden administration will not meet with huge resistance to its environmental initiatives.  First, many businesses already recognize that science-based environmental rules and standards applied fairly are good for business.  For example, while some car companies walked away from the Obama clean car rule when the Trump administration precipitously and foolishly over-turned it, others argued that was a bad idea.  American auto giant Ford cut a deal in 2019 with the state of California to continue producing fuel-efficient cars and trucks within the state and nationwide.  That is looking like a smart move now, as they are more closely aligned with the new administration than GM, which sided with the Trump administration on rolling back tailpipe standards.  To be clear, both companies are racing to get EVs to market – and the new EV trucks they plan to build are selling out fast. Hopefully, GM and the others that followed Trump will reverse course on their lawsuits rather than continue to fight tougher emissions standards that a Biden administration is likely to restore.

Second, even without regulation, market forces are pushing companies toward more climate-friendly and cleaner ways of doing business.  Businesses want inexpensive energy and that means they are increasingly opting for renewable power and will benefit from energy efficiency initiatives too.  Even the state of Texas is going “green” with fossil fuel companies switching to renewable power for their own operations.  Indeed, as Barron’s recently noted, “Major oil companies are in the early stages of one of the biggest transformations in any industry in decades. Nearly all of them are starting to make investments in low-carbon businesses, investing in wind, solar, and hydrogen power.”  

Companies increasingly want to be seen as going green.  Ford’s newest ad “The Change” is evidence that the company wants the public to know about its plans to cut its own carbon footprint through use of renewable energy. Companies like Apple have not only made their company operations powered on 100% renewable energy, but they are now pushing the switch to renewables through their supply chain and Walmart recently announced its own effort to do the same.

 Last, but not least, it’s what the customers want.  Net-zero on carbon is now “the rage” for big companies and big brands like Microsoft, Unilever, Starbucks, Mercedes-Benz, and Nike.  Apple, for example, is offsetting the carbon emissions it cannot avoid by investing in forests and nature-based solutions like mangrove restoration and regenerative agriculture.  And it’s clear that going “green” has gone mainstream because this week food giant McDonald’s launched a new “McPlant” burger, a completely vegan option the company created with Beyond Meat, which it will source via a new sustainable supply chain.  McDonald’s still hasn’t said how it will reduce the environmental impact of its beef supply chain, however.  So there is more work to do, but it is heartening to see these changes being driven by consumers rather than regulators. 

So while the Biden administration will work to restore faith in government, many Americans will continue to put great stock in what corporations do.  The signal businesses send about the importance of sustainability and reducing their carbon footprint really matters.  And that includes the signal they send by either working with or working against a government push to reduce U.S. and global carbon emissions as well as clean up our air and water pollution problems. So the question is would they, as the old slogan says, rather fight than switch? Will corporations and businesses and their lobbyists and associations work with the new Biden administration or fight them every step of the way? To quote President Trump, “ Time will tell.”