Road to Copenhagen, Part 4: A New Social Contract

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"Road to Copenhagen, Part 4: A New Social Contract"

As we approach the climate conference in Copenhagen, politicians are balking and diplomats are burning the midnight oil, deprived of sleep. But we can take heart. Some unlikely new heroes may come to the rescue.

One prospective hero is The Citizen-Consumer.  Consumers are not the first group that pops to my mind when I think about environmental leadership. Unbridled consumption without regard for consequences has much to do with the mess we’re in.

Then came a poll by Time magazine over the summer. It found that nearly four of every 10 American consumers over age 18 regularly and deliberately choose products made by “socially responsible” companies.  If conspicuous consumption got us into this mess, can it be that conscionable consumption will get us out? Maybe. Based on its poll and several other factors, TIME concludes:

In America, we are recalibrating our sense of what it means to be a citizen, not just through voting or volunteering, but also through what we buy”¦We are seeing the rise of the citizen consumer – and the beginnings of a responsibility revolution.

We might be tempted to assume these green consumers – Time calls them the “responsibles” – come from the liberal wing of America’s vast customer base. We’d be wrong.  According to Time‘s poll, “responsibles” are almost equally divided between people who classify themselves as conservatives, moderates and liberals.

The second unlikely hero is The Corporation. New evidence suggests that companies around the world are beginning to discover that “green” is golden. A significant number of companies apparently are committing to social responsibility and sustainability.

For example, after interviewing more than 200 corporations that represent 75 percent of the $36 trillion equities market in the United States, Siemens and McGraw-Hill Construction concluded that “corporate America’s embrace of sustainability has more than doubled in strength in the past three years with 76 percent of the largest U.S. firms reporting efforts and commitments that exceed those required by law.”

After surveying nearly 1,600 business leaders around the world, the Boston Consulting Group (BCG) reported this fall that 92 percent of the respondents said their companies are addressing sustainability in some way.  Corporate interest in sustainability has remained strong even during the recession, BCG found, and there was a strong consensus among the business leaders it interviewed that companies “will play a key role in solving the long-term global issues related to sustainability.”

McKinsey & Company reports that in its annual survey of business leaders last year, “executives for the first time were more likely to view addressing social and political issues as an opportunity than as a risk.”

This view – social issues as opportunities — continued in this year’s survey.  McKinsey found:

The financial crisis has increased the public’s expectations of business’s role in society. Most companies have maintained or increased their efforts to address sociopolitical issues, and many have already derived better-than-expected benefits from doing so”¦

The 2009 survey supports their views: at companies with clear criteria about the business goals of their sociopolitical agendas, executives report a variety of business benefits, including access to new markets and improved operational and workforce efficiency.

Most executives polled by McKinsey believe that of all issues concerning the public, including health care and executive pay, climate change and other environmental issues are the most likely to attract the public attention and to affect shareholder value over the next five years.

In an interview with McKinsey the CEO of Unilever, Paul Polman, describes the business case for becoming a “values-driven” company:

It is very clear that this world has tremendous challenges. The challenges of poverty, of water, of global warming, climate change.  And businesses like ours have a role to play in that. And frankly, to me, very appealing. We have every day, in our business, about two billion consumers that use our brands, and so [there is] a tremendous opportunity to touch many consumers. And if we do the right thing, leveraging that tremendous skill, we can actually make major progress in society”¦.

And we see the consumer asking for this, to be honest, in today’s environment. Again, the consumer’s trust in business, unfortunately, is lower than we would like it to be. And the standards that the consumer sets””the expectations, her own proactiveness and influencing with her purchase decisions, and her own beliefs””are only going to increase as we move forward, I believe. So, companies with a strong social mission will be companies that are more successful long term.

The evidence of a growing green marketplace is accumulating so fast, TIME believes we’re seeing “a new social contract among consumers, business and government”.  I don’t know whether that contract really exists, but I am certain about one thing: It would be a very good thing if it did.

So let’s write one. Let’s invite corporations, governments and citizen-consumers to sign a win-win-win commitment. Its obligations would include these:

Government - Two of government’s biggest roles in building a green economy are as consumer and regulator. The federal government is so large a consumer of energy and products, ranging from battleships to paperclips, that it has the power by itself to create large sustained markets for green products. President Obama has flexed that power in his Oct. 5 executive order, which requires federal agencies to reduce their carbon emissions, use less energy and water, and comply with new sustainability requirements. Every state and local government in the United States should follow suit.

Governments at all levels should follow Wal-Mart’s example by greening their supply chains – i.e., requiring suppliers to comply with progressive standards that reduce their environmental footprints.

Federal, state and local governments can create their own social responsibility and sustainability plans and report progress annually with third-party verification. Among other things, these plans would detail how state and local governments are using their substantial existing authorities to promote sustainable practices in buildings (through building codes), power production (through utility regulation), transportation systems (through regional planning and the investment of federal transportation money) and urban design (through zoning, tax policies and infrastructure development).

Corporations: Despite the positive news from the business sector, corporations have a long way to go. The majority of respondents in the BCG survey said “their companies were not acting decisively to fully exploit the opportunities and mitigate the risks that sustainability presents.” More than 70 percent said their companies have not developed a clear business case for sustainability.

Contradicting the Siemens’ survey, BCG found that among the companies it surveyed, most sustainability actions are the minimum required by law. TIME’s poll found that 40 percent of the 1,000 largest companies in the United States have not created publicly available environmental policies; fewer than 8 percent use third parties to verify progress on their corporate social responsibility policies.

In the new social contract, every company hoping to earn the loyalty of green consumers would create and regularly publicize its corporate social responsibility and sustainability policies. Companies would set clear stretch goals for reducing their greenhouse gas emissions, improving their resource efficiency (including water and energy), using recycled content in their products, and replacing high-carbon with low-carbon energy.

In addition to setting environmental standards for their suppliers, certifying their progress and reporting annually, corporations would develop green labels that disclose the life-cycle environmental footprints of their products. They’d avoid green-washing by following the Federal Trade Commission’s Green Guides on labeling.

And here’s a big one: Corporations would promise to adhere to the same environmental standards overseas that they use in the United States.

Citizen-Consumers:  Consumers would favor green and socially responsible companies not only in their purchases, but also in their investment portfolios. They would pledge to conserve energy, to recycle and reuse, and to support local investments in mass transit, hiking-biking paths, urban forestation and smart growth.

Who would manage such a contract and how would it be enforced? I have no idea. But the federal government could help by finishing work on a system to track national progress on sustainable development – an exercise that has been underway for years in the White House. That system could include indicators of how government, business and citizen-consumers are meeting the terms of the new social contract.

The cap-and-trade bill being considered in Congress would be a game-changer in the economy, for the first time creating price signals that discourage consumers from purchases that contribute to global warming.  We need that, but we need a deeper change, too – a signal that we’ve changed our world view and consumption ethic as well as our price signals.

We need a global movement in which good government, good business and good citizenship are mutually reinforcing, with verifiable commitments to environmental and social responsibility. That would indeed be revolutionary.

— Bill Becker

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14 Responses to Road to Copenhagen, Part 4: A New Social Contract

  1. Jeff Huggins says:

    Products to STOP Buying If You Are Serious and If You Want to Consider Yourself an Integrated and Informed Person: And, Your Butt Deserves Better!

    In my view, we should stop buying these products, period:

    All ExxonMobil products.

    All Georgia-Pacific products, including:
    Quilted Northern bathroom tissues
    Angel Soft bathroom tissues
    Brawney paper towels
    Vanity Fair paper plates and table products
    Dixie cups

    Many people might wonder, “Why should I stop buying such soft and nice-sounding paper products, from this particular company?”

    The answer depends on how serious you are with respect to climate and the environment, how informed you want to be, and whether you want your choices to reflect your values on this key issue!

    The HUGE private company Koch Industries owns Georgia-Pacific, which makes and markets those products to you that are mentioned above. If you buy those products, you are supporting Koch. If there is any company that is worse, regarding the climate issue and promoting public deception, than ExxonMobil and perhaps a few coal companies, it is Koch, in my view, and according to news that I consider credible.

    Most people don’t know these things, of course. The connection between “Angel Soft” toilet paper and climate change deception? What? Really?

    Check it out for yourself, if you like. Go to the Koch website. Watch the news closely. Realize who is supporting what sorts of public-deception initiatives. You won’t be happy.

    Your butt deserves better!

    Be Well,

    Jeff

  2. Ken Johnson says:

    Re “The cap-and-trade bill being considered in Congress would be a game-changer in the economy, for the first time creating price signals that discourage consumers from purchases that contribute to global warming.” These types of regulatory incentives differ from the type of voluntary measures that are discussed in this article. While the bill would create incentives to achieve the cap, it would also perversely subvert and undermine any efforts to achieve emissions beyond the cap. If individuals or corporations take unilateral action to reduce their carbon emissions, the allowances that would have otherwise been used to cover those emissions will still be allocated, and will allow someone else to increase their emissions by the same amount.

    The Western Environmental Law Center and several collaborating institutions recently sent a letter to Senators Kerry and Boxer explaining this problem and outlining a legislative remedy that could help preserve the environmental integrity of complementary GHG-reduction programs.

  3. ken levenson says:

    Great point Jeff. Koch has been supporting the most retrograde, god-awful policies for years – they are truly despicable. Yet as a private company their HUMONGOUS SIZE AND POWER goes largely unnoticed. They are as close to a dark force as America’s got.

  4. Mark Shapiro says:

    Every time we hear the complaint that “cap and trade will cost money” or “Clean energy costs too much” the reply could be:

    “You can save money with efficiency and conservation”, or “efficiency and conservation measures you take today will save you money today and forever — and the savings are tax-free income.”

    Some conservation steps, like turning off the lights or dialing back the thermostat, save money today. Others steps, like buying smaller houses or cars, save money today plus he entire time you use it.

    Conservation is not defined however, and thus can’t be measured. Not by economists and not by clean energy advocates. A beginning definition is simply foregone consumption. For an individual, and economist might call it savings (income minus spending), but that’s only a start.

    Companies like Exxon and Koch are stoking the economic fears of clean energy. We must counter this every time — that every consumer can control their energy costs today and forever — with efficiency and conservation.

  5. Edward says:

    Please read this book: “The sociopath next door : the ruthless versus the rest of us” by Martha Stout. New York : Broadway Books, 2005.xiii, 241 p. ; 25 cm
    4% of all people are born sociopaths/sciopaths/psychopaths. There is no cure. A written test, the MMPI [Minnesota Multiphasic Personality Inventory] can identify sociopaths.

    According to Wikipedia, psychopathy is currently defined…. as a condition characterized by lack of empathy or conscience….Only a minority of diagnosable psychopaths are violent offenders…. The manipulative skills of some of the others are valued for providing audacious leadership. Some have argued that psychopathy is adaptive in a highly competitive environment, because it gets results for both the individual and the corporations they represent. However, these individuals will often cause long-term harm, both to their co-workers and the organization as a whole, due their manipulative, deceitful, abusive, and often fraudulent behaviour.

    “Buyer beware” doesn’t really cover it. You can’t boycott coal except by disconnecting your electricity. I would be willing to believe in greenwashing a lot more than greening. I will believe in a new social contract when the cows come home by themselves, when pigs fly, when we finally evolve into true humans about 4 million years in the future.

  6. ken levenson says:

    More on Koch…the past few days activity: they helped fund 40 buses to get teabagers “populist” protest to the Capitol.

    See DailyKos Diary – http://www.dailykos.com/storyonly/2009/11/6/115535/115

    Just the tip of the iceberg of course….Koch is everywhere and very active. Nasty stuff.

  7. ken levenson says:

    I should emphasize – be sure to watch the video embedded in the dailykos post – it lays it out the logistical support quite simply… here’s the you tube link to the video too:
    http://www.youtube.com/watch?v=7-Jat8qOaws&feature=player_embedded

  8. Bill Becker says:

    Edward, I can empathize with cynicism about the human condition. But I can’t dwell there without risking my own mental health. In regard to coal, I take some hope from the Colorado experience, where after years of rejection by the Legislature, citizens passed a renewable energy porftolio standard by referendum, the first such action in the country.

    I do think there’s hope for a social contract, even if it’s not so much a social movement as it is the aggregated impact of individual contracts by people trying to make a difference where we can, including the marketplace. I don’t think it’s a matter of “buyer beware”. It’s more like “buyer be picky, vocal and active”.

  9. Pete Ridley says:

    Jeff Huggins (and ken levenson), you appear to be claiming that Coch Industires, ExxonMobil “and perhaps a few coal companies” are having a significant impact upon global climates. Can you provide links to any credible scientific articles/papers (peer reviewed preferably) that, without invoking highly questionable assumptions about the validity of The (significant human-made global climate change) Hypothesis, substantiate such claims? No Ken, articles by left wing political activists like Markos Moulitsas Zúñiga (Daily Kos) are totally inadequate.

    Mark (Shapiro), I fully support your comments about not wasting energy, or anything else for that matter, however, I am puzzled by your comment QUOTE: Companies like Exxon and Koch are stoking the economic fears of clean energy UNQUOTE. I have no particular love or dislike for such companies. He are simply doing what all companies do in free market economies, selling a product in order to earn a profit so that directors can enjoy substantial bonuses and shareholders can enjoy increasing share value. “Watts up with that?”. BTW, Anthony Watts site is well worth a visit (Note 1), especially the article “Why Copenhagen Will Achieve Nothing” (Note 2).

    Bill (Becker), you say QUOTE: It’s more like “buyer be picky, vocal and active” Unquote but no, it’s more like buyer be picky, vocal and active only when you have properly assessed and understood what is really behind the UN’s politically inspired human-made global climate change propaganda. Do you really appreciate the extent of the uncertainties and assumptions underpinning the UN’s climate change claims. As I said in an earlier comment, not yet posted here but available elsewhere (Note 3) QUOTE Bill Becker may well be Executive Director of the Presidential Climate Action Project but this is because of his expertise as a climate scientist but because of his experience and ability as a communicator UNQUOTE.

    NOTES:
    1) see http://wattsupwiththat.com/
    2) see http://wattsupwiththat.com/2009/11/06/why-copenhagen-will-achieve-nothing/
    3) see http://solveclimate.com/blog/20091105/road-copenhagen-re-tooling-industry

    Regards, Pete Ridley, Human-made Global Climate Change Agnos(cep)tic

  10. Pete Ridley says:

    Bill (Becker), I see that the UK’s failing Prime Minister Gordon Brown apparently used the expression “social contract” today in a speech to finance ministers from the G20 group of countries meeting in St Andrews, Scotlan (Note 1). QUOTE: Prime Minister Gordon Brown suffered an embarrassing rebuff when he floated the prospect of a new tax worldwide, only to have it flatly and publicly rejected by the United States and other major financial players. .. Mr Brown raised it as one of several possibilities for achieving what he called a “social contract” between the big financial institutions and the public. .. But US Treasury Secretary Timothy Geithner flatly rejected the idea, as did Canadian finance minister Jim Flaherty. UNQUOTE.

    I predict that your desire for a “social contract” between government, industry and consumers based upon the myth of human-made global climate change is also doomed to rejection, this time not by politicians but by consumers, especially those in developing economies. Consumers in China, India, etc. will reject it out of hand because of their aspirations for a more comfortable lifestyle. Consumers in the developed economies will reject it because they have no intention of giving up any of their present comfortable lifestyle. You’re ignoring human nature. Despite the efforts of politicians to get consumers to swallow the climate change propaganda, the UN’s Copenhagan Climate Change Conference will achieve nothing worthwhile.

    NOTES:
    1) see http://news.aol.co.uk/brown-red-faced-after-tax-plan/article/20091107140611148712403

    Regards, Pete Ridley, Human-made Global Climate Change Agnos(cep)tic

  11. David Ghosh says:

    I think,India must change its bad idea to listen Copenhegan talk “Climate Change Formula” she must argue any more and should mantain the protocal and destrically lower the green house gases and CO2.The politicians of India are arguing that,India per capita generate less CO2,it is not trure at rate of Carbon trading.
    I think,India should its environment and take part in Global Warming.
    Thanks
    David

  12. ken levenson says:

    Joe, I can’t find your classic post responding to denier talking points and attitude. Can you provide a link or better still, make it a “most popular post” for easy reference?

    [JR: More details needed.]

  13. ken levenson says:

    joe, i can’t remember details!!!! ;) you wrote a post pretty methodically going over the tortured logic and inconvincablility of the classic deniers…. it was a period of fairly frequent denier trolling and you then referred subsequent denier posts of “but can you PROVE it” with a link back to your previous post…. it feels like it was in the spring or last winter…

    does that help?

  14. Bill Becker says:

    Pete — If Gordon Brown’s idea of a new social contract failed, that doesn’t prove that social contacts are unworkable; it proves others didn’t like one of the provisions of his contract, in this case the tax.

    Nor does a social contract like the one I proposed require that people sacrifice comfort, convenience, quality of life, or “lifestyle”. Paper with high recycled content is still paper; vehicles with high efficiency ratings still get us from Point A to Point B, but with less cost.Electricity from a roof-mounted PV array is still electricity. The idea that “green” is synonymous with sacrifice and discomfort is not valid.

    As for the opinion that human-induced climate change is a myth: As much as I’d like to convert you my side of the argument, it isn’t necessary. One doesn’t have to believe in anthropogenic climate change to believe in its solutions. The many benefits of energy efficiency and renewable energy, for example, include greater energy security, less air pollution, fewer cases of childhood asthma, a better trade balance, less money to oil-producing countries that support terrorists, etc.

    I invite you to pick your favorite benefit and sign the contract.