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CEOs Need to Fill the Leadership Void on Climate Policy

Canada's Prime Minister Justin Trudeau (L) receives an interview from Fortune CEO Alan Murray during last year's Fortune Global Forum.Canada's Prime Minister Justin Trudeau (L) receives an interview from Fortune CEO Alan Murray during last year's Fortune Global Forum.
Canada's Prime Minister Justin Trudeau (L) receives an interview from Fortune CEO Alan Murray during last year's Fortune Global Forum. Business leaders must build on the momentum started by the 2016 Fortune Global Forum and raise the bar on corporate sustainability, writes Fred Krupp.Yu Ruidong—China News Service/VCG via Getty Images

Business leaders know it’s no longer enough to simply post their company values online. CEOs need to publicly and visibly put those values to work because investors, employees, and customers now demand it. After 20,000 Google employees staged a walkout last November, for instance, the company overhauled its sexual harassment policies. When high school survivors of the Parkland massacre fostered a national debate on gun control, Walmart and Dick’s Sporting Goods increased restrictions on their retail firearm sales.

And in response to the current U.S. administration seeking to roll back critical environmental safeguards, business executives have started stepping up to fill the leadership void on climate policy.

An early sign of this new assertiveness came at the Fortune-Time Global Forum at the Vatican in December 2016, which I attended. I was heartened when the many participants—which included Fortune Global 500 CEOs as well as nonprofit organization and private sector delegates—committed to “helping governments everywhere implement the recent Paris Agreement on climate action,” and pledged “to deliver on our own public targets for reducing the carbon footprint of operations and supply chains.” It was an outcome described by then Fortune editor-in-chief Alan Murray “as a tipping point.”

And indeed it was. Last year, when the Trump administration proposed easing U.S. clean car standards, rules adopted in 2012 to reduce pollution from automobiles, Ford responded by stating they “support increasing clean car standards through 2025 and are not asking for a rollback.” James Verrier, CEO of BorgWarner at the time, a leading automotive component supplier, also said the industry had no intention of going backward. Additionally, last July, 34 businesses—including heavy-hitters like General Motors, Lyft, PG&E, and Shell—sent a public letter of thanks to Rep. Carlos Curbelo (R-Fla.) for introducing a bill to fund infrastructure investment while cutting climate pollution.

As the leader of an environmental organization, I might be expected to advocate for corporate sustainability above all else. However, in my view, businesses and the environment can—and must—thrive simultaneously. Like many Americans, corporate executives are coming to understand that we need to get serious about turning the corner on climate change. By 2050, the world will be home to some 9.8 billion people, all wanting more food, goods, and services that boost our economy while slapping a massive burden on the planet’s resources—and this growth cannot be sustained without a major shift in how we do business.

In order to raise the bar on corporate sustainability and build on the current momentum, there are four things business leaders must do.

First, business leaders must publicly commit to a future where both business and nature can prosper. CEOs must set aggressive, sustainability targets, work hard to achieve them, and communicate on progress. To that effect, 169 companies have set science-based targets on reducing greenhouse emissions and 165 companies have committed to source 100% of their global electricity consumption from renewable sources. Xcel Energy, a major electricity company, also recently switch to 100% carbon-free electricity by 2050.

Second, businesses need to partner across industries and global supply chains to deliver impact on a transformative scale. Project Gigaton is one example: It’s a collaboration between Walmart, environmental groups, and global suppliers that seeks to cut a billion tons of carbon pollution from the company’s global supply chain. Additionally, a coalition of major consumer product companies including Procter & Gamble, Nestlé, PepsiCo, and Unilever recently announced the zero-waste Loop platform to address the root cause of plastic waste by providing recyclable containers.

Third, business leaders must advocate for smart environmental policy. Taking steps to reduce the carbon footprint of your business is critical—but it isn’t enough. Corporate executives must also publicly engage on environmental policy, weigh in on climate debates at all levels, and ensure their policy stances reinforce their corporate sustainability standards. For instance, Danone, Mars, Nestlé, and Unilever co-founded the Sustainable Food Policy Alliance, a group formed specifically to advocate for public policies consistent with their environmental goals. These companies also filed a joint comment supporting the Clean Power Plan in response to the Trump administration’s decision to repeal it.

Fourth, business leaders must accelerate environmental innovation. From severe weather events and diminishing natural resources to power and supply chain disruptions, the impacts of climate change are costly. Disruptive technologies give business leaders a chance to scale solutions to their companies’ most urgent environmental challenges: For example, the oil and gas industry is exploring predictive analytics and remote sensors to manage harmful methane leaks from their operations.

While business leaders are making progress on sustainability, by necessity, the bar must be raised. With the right leadership from the corporate sector, I believe the pressure will be on the federal government to address climate policy but, in the meantime, CEOs must continue to step up. Our environmental and economic future depends on it.

Fred Krupp is president of the Environmental Defense Fund.