The mood was a little grim at a gathering in New York two weeks ago for corporate and nonprofit types looking to advance social change—especially when the discussions turned to the environment, an issue that doesn’t seem to be a priority for President-elect Donald Trump.
And yet participants weren’t quite ready to sign up for any sky-is-falling thesis.
“It would be better, for sure, if the Trump administration weren’t obstructionist,” said Nature Conservancy CEO Mark Tercek at theNationSwell Summit.
“But we’re not doomed if that’s the case,” he continued.
Why? Because giant multinational companies are now advancing sustainability agendas rooted in bottom-line concerns. Tercek took a moment to compliment not an obvious ecological championlike, say, Apple, but a corporation that hasn’t always been seen as green: “Walmart is being enormously constructive.”
Not a crazy idea
The idea of turning one’s environmental attention from an uninterested or unmotivated White House and instead looking to large firms with a nationwide or international scale isn’t new.
Walmart (WMT) pleasantly surprised many activists during the George W. Bush administration. In 2005, then-CEO Lee Scottsaid that Hurricane Katrina had changed his thinking and committed the firm long-term to using 100% renewable energy, creating zero waste, and selling only sustainable products.
Lee’s speech noted the underlying financial logic of these moves: “If our trucks are inefficient from a fuel standpoint, we’ll pay for that at the diesel pump.” Making Walmart’s fleet of trucks more efficient by one mile per gallon would have saved $52 million that year.
Lee Scott speaking at the Fortune Brainstorm Green conference in April 2010. Source: REUTERS/Lucy Nicholson
Eight years later,Walmart’s 2016 “Global Responsibility Report” notes substantial progress. The company met its goal of doubling the efficiency of its US fleet by 2015, which saved 650,000 metric tons of carbon dioxide—and nearly $1 billion in expenses.
(The report notes that much of this improvement was due to automated monitoring of truck drivers’ performance on the road and the resulting “well-informed conversations” management can have with them.)
“The things that I talked about today will be good business as well as doing good things for the world ,” Walmart CEO Doug McMillon said at a conference after announcing that and other sustainability goals.
The phrase“greed is good” doesn’t appear in that 2016 Walmart document or the Stanford report, but that line from the movie “Wall Street” does apply in this case. As another NationSwell Summit speaker,Energy Independence Now executive director Brian Goldstein, said: “It’s not, ‘hey, we want to save baby seals,’ but ‘this is going to make economic sense’.”
Case study: cable boxes
But what about situations where the company causing the waste doesn’t have to pay for it? That was the scenario with cable boxes, which not onlycost you $10 or more a month in rental fees but also have historically been energy hogs.
TheNatural Resources Defense Council studied the problem and found that cable and satellite boxes ate up 27 billion kilowatt-hours of electricity, more than $3 billion worth, in 2010. That consumption could be cut by 30% to 50%, thatnonprofit’s research found.
Three years later, that dealseems to be working. AnAugust 2016 study found that TV-box energy use had declined by 15.9% overall, with energy use by digital video recorders—the most power-intensive kind—dropping by 36%.
Noah Horowitz, who directs the NRDC’s Center for Energy Efficiency, credited public pressure and the cable industry’s fear of more bad PR.
“This collective pressure caused the service providers and their suppliers to focus on driving down the energy use of new and existing set top boxes,” he wrote in an e-mail, noting that President Barack Obama’s administration wasn’t crucial to that success: “Under a different White House we would have likely achieved a similar outcome.”
Horowitz noted that having only a few manufacturers of TV boxes made a corporate-focused strategy work. This market also allowed for a quick payback: “We were able to achieve immediate energy savings, rather than wait five plus years for a national standard to take effect.”
Change is still hard
Protesters in Berlin after the election of Donald Trump. Source: Sean Gallup/Getty Images
It’s still important to note that Trump White House looks like to be much more hostile to energy regulations than prior administrations. Trumpappointed a vocal climate-change denier, Competitive Enterprise Institute official Myron Ebell, to run the transition at the Environmental Protection Agency. And finding corporate champions will only go so far to counteract that.
Besides, many attempts to push change at the corporate level still fail. The shareholder-activist groupCeres expects a record number of shareholder resolutions on climate change in 2017—200 or so, up from 174 in 2016. But a look atits list of shareholder resolutions shows that most failed, the usual fate of resolutions not backed by management.
And many environmental problems—think ofthe long-standing problem of Chesapeake Bay pollution— result from the actions of a large group of smaller actors. That’s the sort of situation where a regulation or a tax, as ugly as it may be to those affected directly, is more effective than lobbying corporations directly. And Washington seems to have lost its appetite for those measures, at least for the next four years.
EmailRob at rob@robpegoraro.com; follow him on Twitter at@robpegoraro.
