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Insights 19 Feb 2010

The Departed

By Jeff Erikson

SustainAbility has long considered public policy involvement an important component of corporate sustainability strategies. We encourage our clients to become involved in supporting legislation and regulation which is aligned with their stated commitment to sustainable development. When our clients, or other companies with prominent profile and influence, engage in public policy in a way which appears inconsistent, we openly challenge the inconsistency, and advise them on the risks which are inherent in such actions. In recent months we have publicly expressed our support for acts of leadership on climate change – as when PG&E, Exelon, Apple and PNM Resources resigned from the US Chamber of Commerce. We also criticized the American Petroleum Institute and its oil and gas company members when it sponsored so-called Energy Citizen rallies in Fall 2009.

We thus feel compelled to weigh in on the recent departures of BP America, ConocoPhillips and Caterpillar from the US Climate Action Partnership (USCAP), which have raised a flurry of op-eds, prognostications and misleading statements.

First we should acknowledge the leadership that these three companies, as well as Shell Oil, Duke Energy and several other energy producers, showed by joining USCAP when it was formed in 2007. Neither Chevron nor ExxonMobil joined the coalition of NGOs and companies from diverse industry sectors who all agreed with the need for comprehensive federal climate change legislation. Instead, those two companies focused their resources on (a) extensive advertising campaigns intended to convince the public that they care very much about climate change, and (b) lobbying to promote their own narrow self-interest.

Second, let’s be clear that there is no indication that any of the companies resigned from USCAP because of doubts about the need to address climate change and reduce carbon dioxide emissions. Both BP and ConocoPhillips (press release) have re-stated their support for federal climate change legislation. Some climate skeptics are painting these actions as further evidence that the foundational science of climate change is weakening. However, the three companies themselves have reiterated their belief that climate change is a real and serious issue, and that greenhouse gas emissions must be reduced. The disagreement instead seems to be in the details of which industries will be most disadvantaged under legislation that USCAP supports.

And third, we must say that we are very disappointed that BP, ConocoPhillips and Caterpillar have left USCAP. As an organization which is driven by our vision of a more just and sustainable world, and which advises corporations on how to generate value from applying sustainable development principles to their business, SustainAbility believes that these three companies are making a mistake. We believe their decisions won’t serve the best long-term interests of their shareholders, their customers, the communities in which they operate, nor their employees. Their departures surely bring into question whether they are truly serious about addressing climate change, or whether they are only concerned about short-term opportunism. They have opted for the easy path, reverting to business as usual, when the need is for collaboration, combined perspectives and compromise. It may be the latest example of the tragedy of the commons, where optimizing shared benefits is lost to individuals seeking to maximize individual benefits.

USCAP remains an important coalition of diverse organizations, which will continue to be a force for development of effective federal climate change legislation. Meanwhile BP, ConocoPhillips and Caterpillar have all committed to continue to work positively to reduce greenhouse gas emissions and impacts of climate change. We implore them all to ensure that all of their activities – in public policy, product development, operations and other areas of their business – align with their stated commitments on climate change and with the magnitude of the challenge facing society. We’ll be watching with intense interest.

Disclosure: BP, PG&E, Shell, ExxonMobil and Chevron are currently or in the past have been clients of SustainAbility.



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