By Helena Farstad and Rupert Read
A new year begins. But saying ‘Happy New Year’ has sometimes felt slightly hollow to us, in 2024.
Because, though most people have yet to realise it, everything changed in 2023; and not in a good way.
We are referring to the utterly unprecedented temperature spike last year, probably a permanent effect resulting from the unusually significant reduction in air pollution achieved in 2023. Now it’s got to be a good thing to reduce air pollution, which kills millions annually; but that pollution has been hiding from us a big chunk of the over-heating that the greenhouse effect has been causing. And now that veil is being stripped away. And so we finally see just how horribly vulnerable the Earth and in particular its human population now are.
Make no mistake; just as records tumbled like never before in 2023, the same is going to occur in 2024. And the climate disasters that have begun to bite are certain to escalate.
The situation is desperate. Who has the power to change it?
There is one power in the world which could be capable of actually pressing governments hard to change fast and to create a new system that might actually work. This power, a voice that governments tend to listen to, might yet allow us all to have a future. It has therefore a profound responsibility to act meaningfully and act now.
We are referring not to activists, nor even voters, but to business and finance.
In the name of (enlightened, long-term) commercial self interest
To date, where business and big money have sought to respond to the climate crisis, individual organisations have tried to do the right thing by themselves, within the constraints of markets (or they have pretended to do the right thing: aka ‘greenwash’). But the constraints of existing markets are extremely tight. Bad actors can easily drive out ethical actors by undercutting them on price, unless there are policies and rules that prevent them from doing so.
For those businesses that are truly serious about playing their part in the transition to a decarbonised economy and a regenerative natural world (remembering that there will be no profits in a collapsed civilisation) the crucial role they must play goes beyond only trying to clean up their own act. … It includes actively and seriously lobbying the Government to regulate them in the common interest. Until a proper science-based policy and regulatory environment is put in place — including something like a meaningful progressive carbon tax — business and finance can never truly be climate- and nature- compatible.
Critics will say that such a carbon tax is wishful thinking; that it isn’t seen as politically pragmatic, nor even as politically possible. For now, they are right. But things will change rapidly in coming years, as ever more temperature records are smashed, and climate disasters start to eat into GDP, becoming a material cost on business income statements and a liability on their balance sheets. Adopting even a medium-term view, it’s easy to see that the commercial self interest for most businesses is plausibly served by promoting a strong climate voice, and actively pushing for a level playing field and transformative economic incentives to do the right thing.
This is why we (leading for the Climate Majority Project) are about to launch a new campaign for better regulation of the business world and for a sane climate-policy environment. This campaign will direct its energies first towards wins such as a Better Business Act that will require businesses to be better-world-compatible, implementing a law of ecocide as a visceral deterrent to the worst excesses of exploitation, and repealing the Energy Charter Treaty which has been a dream come true for fossil fuel companies.
These are the kinds of changes that businesses need to get behind now for their own self-preservation.
This shift will require a big change of culture for business and financial interests. They will have to let go finally of the notion that free markets are the framework that can solve everything: the naive, influential, dangerous mindset known as ‘free market fundamentalism’.
Privately, for example in polls, businesspeople are overwhelmingly clear on the need for tough climate regulation. However, they need to also state this publicly: to express clearly that they cannot mitigate the environmental crisis without the correct and enforceable regulation.
Sometimes, a ‘can-do’ spirit is not enough. Real progress on climate and nature, that we desperately need, will take business to say publicly what they privately admit. To say to Governments: Regulate Us!
The power of the powerless
We spoke earlier of the great power of business and finance: the power to make governments listen. But in order to take seriously its voice and lobbying power, the business world is going to have to admit its lack of power to effect the changes that are needed through its own agency alone / through ‘the magic of the market’ (aka market fundamentalism).
Confessing one’s own powerlessness is brave. And it’s the only viable response to the increasing problem of ‘greenhushing’. Businesses that want to do the right thing on climate are being hushed – or self-censoring – because they are worried about being called out for acting inadequately or even for ‘greenwashing’ themselves. The standard response needs to be: of COURSE our actions are inadequate. In many sectors, adequate action would mean being priced out of business, or taken over, or being sacked as CEO. The green economic transformation that we need can’t be carried out by business itself until it has a suitable – transformed and transformative – regulatory framework to operate within.
Paradoxically then, the true power of business and big money in our current unique, extreme historical circumstances crucially includes admitting its own powerlessness. To admit that business by itself is incapable of solving this. To insist that governments lead on doing so. And to put hard lobbying money behind that insistence.
Vaclav Havel, the dissident playwrite who became President of Czechoslovakia in the wake of the 1989 velvet revolution, called this ‘the power of the powerless’. Havel described the power that anyone can have by naming the truth, and confessing their own incapacity to change it. This power strips legitimacy away from failed ideologies.
The pretence that the CoP system is getting us anywhere has been pretty much stripped away by the corrupt Dubai CoP28 late last year. But the idea that businesses can do any better while operating within the constraint of market fundamentalism, is a similarly failed ideology that needs to be exposed. If we are to make real progress on climate, it will be through nation-states individually and collaboratively stepping up. But they will do so only if pressed by business and finance interests.
What business needs to do
The business world, backed by all its immense lobbying power, must now insist that governments move to create a regulatory and policy framework that will finally enable ethical actors to succeed: by stopping bad actors from undermining the good guys’ market share.
By talking of powerlessness we certainly do not mean to let anyone ‘off the hook’ on climate responsibility: make no mistake, there is much more that most businesses could do within the constraints of the current system. But crucially, even if every single business and financier did everything they could within the constraints of the current liberalised capitalist system to do the right thing, this would still not be enough to actually arrest our descent into climate chaos. It would merely slow us down. As Bill McKibben famously said, winning slowly on climate is the same as losing. The only way we can alter our trajectory, into the direction of life, is if the rules of the game itself are changed.
That is why we have argued here that any and every business that is sincere about a future for humanity will stop fixating on telling us about the nice green things they have done, and start demanding — with the full weight of their trade associations, political contributions and more — that governments move to regulate the business world and the economy at large.
Business and finance must find a whole new level of ambition. If humanity is to have a future, business and finance need to focus, for the first time, on lobbying for it. With all their might, with real money. With complete determination.
If you agree, then please join us.
Dr. Rupert Read is Co-Director of the Climate Majority Project (www.climatemajorityproject.com), their new business-focused campaign ‘Regulate Us’, is launching soon.
Helena Farstad ACMA CGMA, heads up the ‘Regulate Us’ campaign on behalf of the Climate Majority Project.
This piece is a much-expanded, updated, (we hope) improved version of material published previously under a different title at Business Green.