Green backlash: how business leaders can make an important difference

Protests against the cost of green policies seem to be on the rise after years of steady progress in combating climate change. If public opinion starts to weaken the will of politicians to effect change, businesses will need to step up their leadership on climate issues.

Backlash to eco-conscious laws is occurring in both the United States and Europe, as some of the front-loaded costs of the policies kick in, despite record high temperatures and pessimistic outlooks on our global climate future. Europe’s energy crisis and increasing inflation globally have put a crunch on consumers, and environmental policies are easy targets for blame.

Short-term survival will almost always take precedence over long-term needs for the average consumer. When families are struggling to keep their homes warm or put food on the table, they might be less focused on the efficacy of energy policies, no matter how effective such policies are at limiting carbon output.

When families are struggling to keep their homes warm or put food on the table, they might be less focused on the efficacy of energy policies.

Politicians, especially in democracies, get skittish about spending to solve long-term problems when pocketbook issues are prevalent. The resulting ‘greenlash’ has caused elected officials from Rishi Sunak to Ron DeSantis to turn their backs on environmental policies, reversing previous accomplishments and dismantling future-focused efforts. The COP28 climate conference, meanwhile, was judged a fairly dramatic failure by most accounts.

Yet the urgency around the climate crisis remains.

A role for business

In the absence of institutional leadership, it’s incumbent upon business leaders to step up and continue to encourage consumers and implement policies that take us in a climate-friendly direction. Businesses are, in many ways, the natural leader for the type of work needed to advance such an agenda.

Historically, a lack of self-regulation and a focus on year-on-year growth prevented businesses from moving a climate-friendly agenda forward. That failure to act left government regulation as the only solution – changing the rules of the game by force of law to make climate progress, in effect, mandatory.

Moving ahead without the same level of government involvement will be difficult. Few businesses voluntarily are willing to make the game harder for themselves in order to reduce their carbon footprint. And that’s especially true if one-sided action allows their competitors to sprint ahead.

But increasingly, business leaders are realizing that there will be no game to play if the board is on fire. According to one survey, 32 percent of businesses have a plan in place to address climate change.

Business leaders are realizing that there will be no game to play if the board is on fire.

Businesses are uniquely suited to addressing climate change. They move far faster than legal and regulatory frameworks can adapt, a dynamic that’s only become more pronounced with the advent of technologies like AI. Businesses also have greater access to resources, and therefore greater ability to withstand change, than individual consumers or families, upon whom much of the ‘personal responsibility’ for climate change is foisted.

Unencumbered by the lumbering restrictions inherent within bureaucracy, businesses have the ability to remain agile. Their ongoing need to evolve in fast-moving markets has them better positioned to see around the corner at what’s coming next. Unfortunately, this ability to see into the future is often contravened by the need to provide short-term projections and earning reports.

If businesses can override this short-sighted behavior, they have the opportunity to disrupt the status quo and introduce solutions to effectively manage the climate crisis. Innovation is rarely cheap, and the disruptions it causes will undoubtedly create discomfort.

However, constraints also drive creativity, and the businesses who effectively impose restrictions and hold themselves accountable are likely to be those who see the greatest returns. What may be viewed as a competitive disadvantage today may actually be the key to winning tomorrow.

Necessity breeds innovation

In some cases, these constraints force progress. Take, for instance, GE Healthcare which revolutionized the electrocardiogram (ECG) by self-imposing what felt like nearly impossible standards at the time. GE Healthcare proposed developing an ECG device that costs only US$1 per scan, is battery operated and can fit in a backpack. Further it was to be developed in 18 months with a budget of less than 10 percent of its predecessor.

At some companies, the bar of expectation is simply set higher. Microsoft started to rein in their emissions by establishing an accounting process to measure emissions and, incrementally, increased the cost of emissions to each department.

Over time, incentivizing departments to both reduce their overall carbon footprint, and exploring unique ways to offset unavoidable emissions, led them to their commitment to become carbon negative by 2030.

In other cases, these constraints can create brand new markets – there are now a number of companies creating plant-based plastics and alternatives, recycling consumer textiles and even creating consumer countertop composting systems.

As business leaders, we need to be prepared to hold ourselves to a higher standard.

Even the reexamination of a small element of a product, like packaging, can provide long-term benefits. Some companies were able to reduce their shipping costs by over a third while also reducing their plastic and carbon emissions by reimagining their packaging to use more sustainable, lighter weight materials and designs.

As business leaders, we need to be prepared to hold ourselves to a higher standard. We have the resources and the capability to create urgently needed solutions to climate change. What businesses have lacked, however, is the patience and foresight to stomach the short-term discomfort of self-imposed constraints that account for the externalities we’ve far too long ignored.

Businesses have the power to change their perspective and see these constraints as opportunities rather than impositions. With their ability to produce and propagate technologies at a speed and scale humanity has never before seen, businesses can be a beacon of possibility, thus demonstrating to both government institutions and the voting public that the forecast calamity caused by climate change does not have to be a foregone conclusion.