While Corporate America has been tugged towards climate and other sustainability issues for years, the step changes of 2020 were significant. The willingness to listen and act, moreover, is high and rising every day. Climate change is becoming more widely recognized and accepted as a critical issue by U.S. corporations. In fact, in our strategy-focused consulting business, we are now almost exclusively focused on climate change and environmental, social, and governance (ESG) related initiatives. This shift has been driven by demand – rather than us – from companies new and old looking for the right answers.
This momentum should be exploited and encouraged by all interested parties. To create the needed and appropriate response, the nation's business and political leaders need to be working together. This is going to be one of the hardest and most complex problems to solve, and it will require consistent alignment between local, state, and national government, as well as corporations within each state.
Many of these corporations are multi-national and will also need to collaborate with governments in many parts of the world. This is not solely a U.S. issue. While the need for a coordinated and standard approach to dealing with each aspect of sustainability is likely to be an overwhelming global challenge, it should not be overwhelming from a U.S. perspective.
Nationwide alignment is both the answer and the only way to drive real change at the pace needed, whether it is to lower emissions or reduce waste. There is neither time nor room for the distraction of local litigation. State tort law regulating emissions standards is not the right way. Not only is local litigation a major distraction and cost for companies that are critically short on time and money to achieve many of their climate goals, but this type of litigation is trying to regulate impact and behaviors far beyond its jurisdiction.
BP P.L.C. v. Mayor and City Council of Baltimore, a case argued before the U.S. Supreme Court last month, is illustrative. The Mayor and City Council of Baltimore, Maryland filed a claim and sought relief in state court against 26 multi-national energy companies, arguing that these corporations contributed to, and were responsible in part for, climate change. They further allege that the companies' actions caused injury to Baltimore. We cannot fight climate change with a city-by-city litigation-based approach. Equally relevant are baseless situations like this where climate change has nothing to do with the City of Baltimore. No energy manufacturer’s carbon footprint within Baltimore’s boundaries has been presented as evidence. In this case, companies filed to move the case to federal court, claiming that the issues raised were governed by federal law.
This attempt by activists and partisans to use the courts to circumvent Congress and the Environmental Protection Agency (EPA) is a major distraction from the work at hand and will almost inevitably slow climate change progress rather than assist. If this litigation and any litigation like it goes forward, energy costs could rise dramatically as companies divert funds towards legal costs and possibly punitive damages. It will also divert funds from trying to solve what is an extremely difficult set of problems. It is important to note that energy companies only produce oil and gas because consumers, like the City of Baltimore, made it economically attractive for them to do so.
We need innovative solutions to fight climate change – not court battles, and especially not battles that cause strategic distraction. Two cases in point:
- Texas did not build wind turbine capacity because it was ordered to do so by a court. Yet some of the shortcomings of the wind-based power supply were very evident last week. Wind and solar alone are not the answer. Finding the right answers will require collaborative, science-based initiatives rather than case-convenient legal opinion.
- In Bill Gates’ new book, How to Avoid a Climate Disaster, he concludes that some of the technologies that we need to reach climate goals are not yet available or fully developed. This is true, especially in critically important areas such as carbon capture and the economics of hydrogen production. It would be enormously unhelpful to have corporate- and government-funded progress undermined by short-term, localized legal precedent.
The National Association of Manufacturers (NAM) supports these types of science-based solutions to combat climate change. Importantly, a new poll from its Manufacturers’ Accountability Project finds that the majority of American voters believe that it is not important to sue manufacturers over accusations of climate change. U.S. manufacturers have already begun to address climate change and emissions, reducing emissions by more than 20% in the last decade while increasing output by almost the same amount. The new sense of urgency, with the right government support, should drive the pace of change much more quickly going forward.
We need to fix the problem of climate change rather than look around for people to blame for it. Alignment to get the job done in the U.S. is better than it has ever been. We should not waste that or allow ourselves to get distracted from it. This is both a national and international problem, and one that cannot be resolved in state courts.
