It took a decade of drought in India to make Coca-Cola leaders directly associate climate change with a threat to the bottom-line. Over at Nike, floods in Thailand caused them to shut down four factories in 2008. According to a recent article in the New York Times, these and other examples show how economic self-interest is increasingly forcing the private sector to lean in where policy has stalled.
EDF has been working with leading brands for over 20 years to align business strategy with sustainability. Now, as the private sector sees climate change directly impacting their operations and business decisions, we asked our experts to weigh in on the news.
“Much like Coca-Cola and Nike, companies that move freight are feeling the impacts of climate change. A recent article in Transport Topics – the trucking industry’s leading publication – highlighted many of the effects that are being felt today.
- Flooding in Colorado in September damaged or washed out 50 state bridges and 200 highway miles during unprecedented rainfall.
- Superstorm Sandy in 2012 left truckers and others in New York and New Jersey without fuel because stations were without electricity for their pumps.
- Massive dust storms in Arizona figured in 40 traffic fatalities from 2000 through 2011.
- Warmer sea levels are rising so rapidly that within 15 years, parts of Louisiana State Highway 1 will be inundated by tides about 30 times a year, on average. Highway 1 is the access road to Port Fourchon, which handles 18% of the nation’s oil supply.
These events cause millions of dollars of damage to key infrastructures that the freight system depends on. It costs companies millions more in supply chain disruptions.
Let’s contrast the cost of the impact of climate change with the clear economic benefit to the trucking industry of mitigating its contribution to the problem. Just a few weeks ago, our nation’s biggest trucks became subject to greenhouse gas emission standards. This new rule will cut climate pollution by nearly 300 million tons while saving truck operators $50 billion.
Companies that rely on trucking to move goods stand to benefit significantly, seeing a decrease of around $0.11 in the total cost-per-mile to move freight. Across their supply chain, large freight shippers will save millions of dollars each year because of this rule.
To me, the take away is clear: Rising up to the challenge to cut global warming pollution is a clear path that business needs to take.” Jason Mathers
With climate as a major topic at this year’s Davos Conference, the NYT article reports, ‘At Davos and in global capitals, (Nike and Coca-Cola) are also lobbying governments to enact environmentally friendly policies.’
“At EDF Climate Corps, we work with hundreds of companies who have accepted the reality of climate change and are actively implementing aggressive strategies to curb carbon emissions. General Motors, a company that participated in EDF Climate Corps in 2013, recently broke away from the pack and established itself as a climate leader, becoming the first automaker to sign the Climate Declaration. We applaud business leaders to who are willing to step up make the leap into policy advocacy – action is needed now if we are going to avoid massive price tags, environmentally and economically, in the future.” Liz Delaney
However, the NYT article goes on to report that promoting the idea of environmentally friendly policies in countries like China and India is an especially tough sell, because ‘cheap coal-powered energy is lifting the economies and helping to raise millions of people out of poverty.’
“The links between climate change and harm to human health are many, but one of the most significant sources of CO2 – coal fired power plants – also generates particulate matter, or soot, which directly impairs lung function, especially in children and the elderly. Half of the world's coal supply is burned by China each year; and 20% of the world's climate pollution originates there. By 2030, some 250 million rural people are expected to move to Chinese cities and consume twice as much energy. Lifting people out of poverty at the expense of their health is a losing economic strategy. “ Michelle Harvey
So bring on the economists. One of the ideas surfaced in the article is that putting a price on carbon is still economists’ preferred strategy for managing climate change at a system-wide level.
“An interesting trend to note was detailed in Carbon Disclosure Project’s (CDP) recent report, which details the disclosure of 29 major publicly traded companies who have placed an internal price on their business’ carbon pollution. According to Tom Carnac, President of CDP North America, ‘Companies view the establishment of an internal carbon price as both an evaluation of risk and a business opportunity if they take steps to limit carbon pollution before others do.’
EDF is interested to follow this trend, especially given the report’s conclusion that, ‘Mainstream businesses find the use of carbon pricing to be realistic, prudent and useful…No company cited major business disruption as an effect of either achieving GHG reductions or planning for costs of carbon as regulatory regimes evolve.’” Jake Hiller
As we look to the private sector to continue to drive discussion and action around climate change, we applaud companies like Coke and Nike who are making business decisions which not only react to current climate threats but also alleviate future threats by reducing their environmental impact.