In my college years, I was taken by Buckminster Fuller’s belief in advancing technology as a cure-all for our problems. Decades later, technology to address climate change is advancing fast. Could it be that we’ve got this?
Not exactly. Combating climate change is a massive transformation. The real question isn’t whether we can develop the necessary technology, but whether we humans will adapt our behavior and our institutions to support the changes that are necessary.
Some humans of particular importance, and of great interest to me, are business leaders, who have a big role to play in securing our collective future. Business is in a unique position on climate issues. After all, industrialization is the cause of climate change. When it comes to pollution, including carbon, corporations are by design the biggest offenders. But on their path, corporations have amassed enormous resources and influence—knowledge, technology, production and distribution systems, human and financial capital, networks, and relationships—the same capacities needed to fix the very problems they’ve created.
It will not be easy to realign public policy and private incentives to secure sufficient investments in technology, although bills like the Inflation Reduction Act are a start. We need to let go of the all too comforting and distorting belief that climate change can be solved within the neat box of “doing well by doing good.” Leaders at the very top of our economy need to shoulder sacrifices and they need to talk about it. How else can we learn to accurately price negative externalities, or normalize the prioritization of public goods over private welfare?
This is a lot to ask, and CEOs can’t do it alone—nor would we want them to. But they need to lead and align with fellow travelers. Who has the potential to act as critical allies?
The clearest signal in business—the only one that can be heard over the drumbeat of short-term investors and short-sighted consumers—is from employees looking for something different from the workplace. The next generation of business leaders, aka millennials, already comprises close to 75% of the global workforce.
We know anecdotally from stories that emanate from the C-suite, and from data on workplace attitudes, that employees want to work for companies that will lead on abating climate change. These same employees may fall back on price and convenience as consumers, and expect their stock portfolios to only go up, but they demand clear signals from their employer’s leadership. Now.
The best way for a board to support the CEO is to be laser focused on the long-term health of the enterprise. Climate change threatens the very ecosystems that make commerce possible. Protecting the ecosystems surrounding the business should be a first-order priority. But the noise from the stock market is confusing at best, and too many directors have forgotten, or never learned, that their fiduciary duty is to the corporation, not to short-term investors trading in the stock. The fact that CEOs are paid in stock compounds the problem.
Boards need to be asking questions that help CEOs develop and commit to a future orientation, one that supports aggressive timelines and smart risk-taking, and prepares the corporation to lead in an uncertain future. They need to support executives caught in the squeeze play between activist investors pressing for near-term financial results and growing expectations to transition from fossil fuels.
There is safety in numbers. Whether across or especially within sectors, CEOs up the ante for one another. The right cohort of executives, leaning into the future, can turn an industry from laggard to leader. And as Vincent Stanley describes in his terrific book on Patagonia’s 50 year transformation, it takes all kinds of companies to move the needle; today these trusted peers hail from competitors, suppliers, and B2B customers.
As investors pivot from a focus on disclosure to climate transition planning, they are looking for a different kind of leader: one who sees decarbonization and the energy transition as a business opportunity and seeks competitive advantage in it. LPs are speaking up, and the money will follow business leaders making smart investments at the corporate level—among them, transforming business models, de-risking the supply chain, and getting ahead on clean technology.
The language of ESG can fade away so long as business leaders speak with greater clarity about what matters most—and identify the real allies in making a leap forward.
This article originally appeared on Quartz.