Given that so many of our political leaders have been caught with their fingers in the petty cash, now would be a useful time for some prudent action by business leaders. A naive thought, perhaps, given the number of business leaders caught with their fingers in more than the petty cash in recent years. But in these labile times, wise corporate voices are vital if we are to achieve the necessary and related tasks of re-engineering capitalism and arresting the slide towards ecological catastrophe.
Why should this not be possible, I ask myself, because I increasingly come across individuals within the business world who believe that the current operating system is broken at a systemic level. They fear it is intrinsically primed to deliver dysfunctional asset assessments capable of blowing up economies; that it pushes us towards conflict and war over resources. They are concerned that ultimately it destroys wealth and security for all by failing to address climate change, a problem that threatens civilisation and even a viable future for our species. Putting it bluntly, there really isn’t any future for business if the wider business community ends up complicit in the killing of all its customers.
What can be done? Let me offer five possible outlooks.
First, there is the big picture. We tend to measure the health of our economies in two main ways: growth of GDP and growth of stock-market value. GDP is increasingly being recognised as a metric in large part unreflective of anything healthy, either for society or the environment. A dying person on expensive drugs going through a costly divorce is ideal for growing GDP. Share valuation, the basis for stock-market valuation, routinely mortgages the future for perceived value in the short term. Jack Welch, former CEO of GE, and widely viewed as the head cheerleader for the notion of short-term ‘shareholder value’, recently confessed to the Financial Times that ‘on the face of it, shareholder value is the dumbest idea in the world’. Nobel prizewinners are conducting a review of alternatives to growth. FT columnists are accepting that capitalism – as it is today – must be re-engineered root and branch. Every company should become involved in this debate, and every business leader should be deeply considerate of where it is going. Tesco, as it were, cannot keep growing for ever. There is only one planet available.
Second, there are the individual line-in-the-sand issues. Take the third runway at Heathrow, for which the CBI recently announced its full support, implying that all companies were in favour. Thirteen companies then wrote a letter saying they were actually against it, and exhorted the government to build rail instead. Carphone Warehouse, Sainsbury’s and Sky were among them. Other pivotal debates are under way or upcoming, not least about the building of new coal-fired power stations. Many believe we might as well give up on climate change if a country like the UK, with its abundant renewable resources and virtually un-mined reservoirs of energy efficiency, can’t avoid burning more coal. Companies need to start taking sides, and picking the side that backs an environment healthy enough for them to do business in.
Third, companies can always choose where they do business. Corporate voices were the endgame for apartheid in South Africa: it didn’t fall until big companies said they could no longer work in the country. The anti-Exxon climate campaigns, including the Stop Esso embargo campaign in the UK, may well have contributed to the fact that corporate shareholders have forced Exxon to stop funding the lobby groups that spread disinformation and lies about climate change. The planet needs more constructive confrontations like this.
Fourth, companies can sound alarm bells about issues where government isn’t thinking beyond its next election. The peak oil debate continues to be polarised, with many in government in denial. The UK Industry Taskforce on Peak Oil and Energy Security (ITPOES), led by Virgin, is slowly converting people. The Confederation of British Industry is taking the taskforce’s concerns seriously. By contrast, the senior DECC civil servant responsible for UK energy security told taskforce representatives that the government doesn’t accept the idea of peak oil. We are stumbling towards the great global energy crisis just like we stumbled towards the great global financial crisis. The major difference this time is that people are shouting a warning – not just the UK industry taskforce, but the International Energy Agency, and growing numbers of executives within and around the oil industry itself. As things stand, they are being ignored.
Fifth, there are the small things that can make a big difference. Consider business schools, the beginning of the road for many in the business world. Only 20% of UK MBAs have a mandatory corporate social responsibility module. This is scarcely credible, considering the impact climate change is already having on the business world. A relatively small group of major company leaders could transform this situation with one well-targeted letter to business-school principals.
There is much more that business leaders can do. Companies, after all, are made up of people. Ever more people are appreciating that the threats to their future are clear, present and dangerous.