Tuesday, May 9, 2017

Corporate America Rejects Trump's Climate Ignorance

Corporations are opposing Trump and standing for climate action in increasing numbers. Governments around the world are applying pressure in an attempt to get Trump to honor the Paris Climate Agreement. A little more surprising to some is the fact that corporations are also urging the White House not to quit Paris. Never has the business community faced such a pivotal choice.

"It’s imperative that businesses take an active role in meeting the goals set out by the Paris Climate Agreement," said Anna Walker, Senior Director of Global Policy and Advocacy at Levi Strauss & Co. "It will be critical that we work together to ensure the U.S. maintains its climate leadership, ultimately ensuring our nation’s long-term economic prosperity."

Corporate America is joining millions of Americans in resisting Trump's climate agenda. It should be noted that this is not the first time that Corporate America has publicly disagreed with this administration. Early in his term a large number American corporations challenged Trump's Muslim ban.

Within his first 100 days Trump has been the focus of an unprecedented number of major protests. The Women's March, the largest march in American history, took place shortly after Trump was inaugurated. This was followed by the March for Science. Most recently a broad coalition of social and environmental groups came together for the People's Climate March.

Corporate rejection

Trump claims that he is trying to unfetter corporate America by removing environmental and climate restrictions. Yet the corporations he claims to want to defend do not seem to want the kind of help he is offering. This begs the question who benefits from the US withdrawing from the climate deal? The fossil fuel industry would certainly be the industry with the most to gain. However the oil and gas industries have not publicly lobbied against the Paris accord and many actively support it. Even ExxonMobil has urged Trump to stay in the deal.

This unexpected support for the Paris plan is explained in an Axios article by Rebecca Zisser titled, "Corporate America isn't backing Trump on climate,"
"Corporate America is uniting on climate change... In a shift that is changing the debate, the biggest and most important U.S. energy companies are now dropping their resistance to a global climate deal."
Sustainability is now a mainstream phenomenon. Many leading corporations see climate action as both a competitive necessity and an unprecedented economic opportunity.

Businesses are resisting Trump and advocating for sustainability. Companies such as Apple, GE, Amazon, Google and Microsoft are reducing their emissions and banking on the understanding that the low carbon economy will spur massive growth in the cleantech sector. Along with growth comes innovation and jobs especially in renewable energy. These companies along with most of the world's leading economists agree that this would benefit America.

As reviewed in a GMO article:

"Brands can't afford to be apolitical. Companies are realizing that there may be a cost to political neutrality in the era of Trump." The same article also reviews the benefits of corporate advocacy. We saw evidence of advocacy in the Super-Bowl LI ads. The time is coming when businesses will have to take sides.

Corporate hypocrisy

Hundreds of businesses including GE urged Trump to respect the Paris Agreement. However, there is also widespread hypocrisy. A New Yorker article by John Cassidy titled, "Why Corporate America Must Stand Up to Trump," reports that the National Association of Manufacturers, which has representatives from G.E. and many other US companies on its board of directors, ran ads urging congressional confirmation of fossil fuel advocate Scott Pruitt to head of the EPA.

Cassidy points out the corporations have reason to fear the wrath of a tempestuous president like Trump. CEOs may not want to criticize Trump for fear of impacting shareholders and their own stock-and-option packages.

A Buzzfeed article by Steven Perlberg titled, "Why Corporate America Is Taking Sides On Trump" tries to explain why firms are getting political. Rather than risk alienating large number of consumers corporations have traditionally avoided taking sides. However, Trump has forced a rethink of traditional marketing strategy.  Drawing on an argument from branding consultant Dean Crutchfield, Perlberg called this new marketing, "brand activism with business repercussions."

In February Dove began running an ad in the UK mocking "alternative facts".  However, the cost of alienating the right can be high as cereal company Kellogg found out when it pulled its ads from Breitbart News. The purveyor of fake news then ran a #DumpKelloggs boycott campaign.

The division is real

Nonetheless, the resistance born out of the differences between the Trump administration and corporate America are very real. Most companies are inherently globalist whereas Trump's ran and was elected on a platform of economic nationalism. This leads Cassidy to conclude "in many areas, the long-term interests of America’s biggest corporations, far from being aligned with the Trump Presidency, run directly counter to it."

Netflix’s Reed Hastings said, "Trump’s actions are hurting Netflix employees around the world, and are so un-American it pains us all," Cassidy quoted Hastings as saying. "It is time to link arms together to protect American values of freedom and opportunity."

Corporate America is rejecting Trump along with the majority of Americans. The older rural folks in middle America may follow suit once they realize what Trump and the GOP are trying to do to their healthcare.

Update: The Trump administration meeting to discuss the future of the Paris Climate Agreement was postponed along with a final decision on the fate of American involvement in the deal.  

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