Nearly 70 companies announced plans to cut carbon output yesterday as part of a White House campaign to enlist American businesses in its effort to strike a global deal on climate change and to challenge attacks that describe warming policies as economically harmful.
The companies also signed a White House pledge stating that an international agreement aimed at tackling emissions would enhance their business by providing a clear government response toward stabilizing temperatures. The addition of 68 companies to the pact yesterday provides a strong endorsement for the Obama administration’s climate policies six weeks before 194 nations meet in Paris to finalize a climate agreement, White House officials said. Thirteen companies first signed the pledge in June.
"You all, in stepping forward and making the commitments that you’ve made, are helping to send a signal not only to American citizens but to the world that the American business sector believes that acting on climate is not only good for the planet but it’s good for your bottom lines," Brian Deese, climate adviser to President Obama, told company officials gathered at the White House.
Earlier yesterday, Obama met with the heads of five major corporations to discuss how the government could help them prepare for the impacts of climate change or prevent them from occurring. Among the topics the executives raised were comments around enhancing the grid’s ability to convey electricity from renewable sources and the expansion of electric vehicles using the government’s purchasing power, Deese said.
The companies included Johnson & Johnson, Intel Corp., Berkshire Hathaway Energy Co., Hershey Co., and Pacific Gas and Electric Corp. Also in attendance were executives from five smaller companies that supply products to their larger counterparts.
Emerging from a White House door after meeting with the president, several of the executives suggested that acting on climate provides a mix of benefits, from retaining younger employees to satisfying shareholders. It might also help them burnish their reputations as responsible citizens.
Others, though, say the companies could be doing more to contradict a narrative by some Republican lawmakers that Obama’s climate policies will cause economic harm in return for insubstantial environmental benefits.
Sen. Sheldon Whitehouse (D-R.I.), who introduced legislation this year to create a carbon tax, said the companies might be talking about climate change in their boardrooms but they’re not conveying the same message to Congress.
"The massive American corporate lobbying effort in Congress is at best silent on climate change, and at worst adamantly hostile," Whitehouse said in a statement. "For that to change, these companies will have to take responsibility for the advocacy efforts of groups that represent them in Congress, and align their advocacy with their policy."
Companies ponder the costs of soaring emissions
The White House announced the new signatories to its "American Business Act on Climate Pledge" as nations continue to release their goals to cut emissions before the Paris negotiations begin in six weeks. Currently, about 150 countries have submitted their formal plans to the United Nations, marking an unusual amount of momentum before a major convention. Together, the countries account for about 85 percent of global emissions, White House officials said.
Todd Stern, Obama’s chief envoy for climate change, expressed optimism about the impact that the early goals could have on the climate and the broader negotiations. He said outside analysts calculate that global temperatures would rise by 2.7 degrees Celsius if the policies outlined by the 150 nations were enacted. Just a year ago, analysts projected a 3.5 degree rise.
"They’re very good, but they’re not enough," Stern told the group yesterday, noting that global goals will have to ramp up over time to reduce the heaviest impacts from rising temperatures.
Even as nations are grappling with ways to cut emissions, businesses are increasingly making their own calculations about how much it might cost them to release carbon dioxide.
The private sector worldwide has seen a surge in carbon-pricing this year, according to CDP, the nonprofit formerly known as the Carbon Disclosure Project that tracks climate policies and trends.
Major firms fill out surveys related to climate change drafted by CDP. Last month, CDP said 437 companies this year have reported that they price their corporate carbon emissions — a method to approve and reject capital spending projects — up from 150 in 2014.
The group of signing companies consists heavily of tech (Hewlett-Packard Co., Google, Apple Inc., Dell Inc., IBM Corp., Microsoft Corp.), home goods (Nike Inc., Procter & Gamble Co., Johnson & Johnson), food (General Mills Inc., Hershey Co., Mars Inc., McDonald’s Corp.) and beverage (Coca-Cola Co. and Starbucks Corp.), as well as iconic blue-chip firms (AT&T Inc., Alcoa Inc., General Electric Co. and General Motors Co.). Noticeably absent were fossil energy companies.
Hugh Welsh, president of DSM North America, the U.S. division of Royal DSM — a $10 billion multinational that makes vitamins, automotive parts, medical equipment, paints and plastics, among other items — said smart companies are planning for a carbon price.
"There’s a sense of inevitability," Welsh said in an interview, regarding carbon pricing.
Swedish box store is humbled by climate change
DSM North America, one of companies that joined the administration’s climate pledge yesterday, said it would harness half of its power from renewable energy by 2025, levy an internal carbon price of €50 when making investment decisions and cut emissions 25 percent or more by 2025, versus 2014 levels.
"I think they know they cannot be successful without the support of the business community," Welsh said of the administration’s push for successful carbon-cutting policies and its efforts at the U.N. Paris conference in December.
A decade ago, plenty of companies announced environmentally friendly programs and policies, he added, but largely did so for the public-relations boon. Now, companies increasingly address climate change as a risk to their operations and pursue green projects because they are financially savvy, he said.
"That, to me, is a step change," Welsh said.
"We’re excited about these sustainable opportunities," Erica Logan, sustainability program manager at Xerox Corp., said in an interview after attending the White House event. Xerox software programs that analyze traffic flow, parking patterns and driving conditions can cut transportation emissions and can save customers and cities time, emissions and money, she said.
Asked of the event’s atmosphere, Logan said John Holdren, the White House science adviser, had a "strong message that the science is just overwhelming," while Vice President Joe Biden said political roadblocks were preventing the success of climate policies.
Xerox pledged to cut emissions and energy use 20 percent by 2020, from a 2012 base, and only use renewable energy by 2050. "This is really not new to the company," Logan said.
McDonald’s said planet-warming emissions, "if left unaddressed, will have far-reaching implications for generations to come." The hamburger-and-fry chain said it would do more to sustainably source and verify its coffee and beef supplies and use only sustainably sourced palm oil in five years.
IKEA promised to recover or recycle 90 percent of company waste for other purposes and produce the same amount of renewable energy as it consumes by 2020.
Lars Petersson, IKEA U.S. president, hopes his firm can be an example to the government and corporate leaders that cutting emissions can make fiscal logic.
"We’re doing what we’re doing because we think it’s right," he said in an interview. "But we’re also doing what we’re doing because we think it’s good business."
LED lights, cold-start faucets that don’t require boilers to pump hot water straight away, and energy-saving fridges and dishwashers may be a little more expensive initially, but they pay off in the long-term, he said.
"We feel really small compared to this task," Petersson said of climate change. "It’s a big one, and we feel really humble."