There’s no doubt that corporations have a major hold on our daily lives. They spend millions of dollars on lobbying efforts to continuously drive up their profits, often to the detriment of ordinary mortals like us. These companies have huge swaying power in our political sphere, which renders the interest of the voters almost meaningless in the eyes of politicians. One new trend, however, is the rise in corporations adopting “socially responsible” policies. The idea is that companies with large profits should be responsible for giving back to their communities.
While that seems like a straightforward and almost good thing, we have to remind ourselves about how and why these policies are eventually implemented and the ultimate impact that they will have (if at all) on society. The truth is that the goal of corporations is to accumulate profit. Mind you, that profit is not distributed among all workers of that corporation; that wealth lands in the hands of the top executives who become immensely wealthy. Perhaps there are some people within the higher echelons of the corporate world who genuinely wish to give back, but most corporate decisions are driven by profits for their shareholders. Take, for instance, the case of climate change. Do companies actually care about climate change? Or are they more worried about losing environmentally-conscious customers if they don’t shift toward using renewable resources and fewer carbon emissions?
The answer lies in the words of Larry Fink, CEO of BlackRock. The company is a large asset manager and Fink owns major shares in multiple companies, including Microsoft, Amazon, and Delta Airlines. He has significant sway in how the market flows and even has the power to disband corporate boards and overthrow CEOs. Each year, Fink writes a letter to CEOs of these corporations which “has the influence to change the conversations inside boardrooms around the globe”. This year’s letter urged CEOs to take a serious look at climate change and at making commitments to reduce carbon emissions.
Fink made the point in his letter that “climate risk is investment risk”:
Climate change has become a defining factor in companies’ long-term prospects. Last September, when millions of people took to the streets to demand action on climate change, many of them emphasized the significant and lasting impact that it will have on economic growth and prosperity – a risk that markets to date have been slower to reflect. But awareness is rapidly changing, and I believe we are on the edge of a fundamental reshaping of finance…a company cannot achieve long-term profits without embracing purpose and considering the needs of a broad range of stakeholders.
Fink is blunt to say that, in order for companies to remain profitable, they are going to have to invest in dealing with climate change. Nowhere does Fink talk about the actual effects of climate change to human health and the fact that it will disintegrate our planet. This is a marketing strategy, a ploy to lure in more customers. It’s to gain more power and influence while claiming that they have done everything in their power to give back to communities and do nothing to harm them. All false, of course.
And you better believe that when Fink puts out a letter, everyone falls in line. Companies like the aforementioned all put out plans to tackle climate change as soon as that letter was on their desk. Again, these corporations care more about ensuring that Fink keeps his investments in their company than in pushing for aggressive climate change policies.
Let’s go into detail about one company in particular: Amazon. Last week, Amazon CEO Jeff Bezos declared via Instagram that he is going to pour $10 Billion of his personal money into the Bezos Earth Fund, intended to fight climate change. He said:
Today, I’m thrilled to announce I am launching the Bezos Earth Fund.
Climate change is the biggest threat to our planet. I want to work alongside others both to amplify known ways and to explore new ways of fighting the devastating impact of climate change on this planet we all share. This global initiative will fund scientists, activists, NGOs — any effort that offers a real possibility to help preserve and protect the natural world. We can save Earth. It’s going to take collective action from big companies, small companies, nation states, global organizations, and individuals… I’m committing $10 billion to start and will begin issuing grants this summer. Earth is the one thing we all have in common — let’s protect it, together.
Jeff Bezos, CEO of Amazon
Under this new Climate Pledge, Amazon is committing to use 100% renewable energy by 2030, and achieve carbon neutrality by 2040. But here are the problems, because when it comes to Bezos, there is no shortage of problems:
Fink and Bezos understand that climate activism has become stronger and stronger. While Fink mandated the birth of this “Earth Fund”, it was tangentially in response to months of protests by Amazon workers who have been criticizing Amazon’s role in climate change. Amazon is “one of the world’s biggest polluters, emitting 44.4 million metric tons of carbon — more than most countries in the world. The company is even spinning its refusal to end contracts with oil and gas companies as an effort to save the planet, arguing that providing Amazon Web Services software to these companies is accelerating their transition to clean energy”. He is not fully embracing the activism and dedication of workers who planned walkouts and protests.
And let’s be clear: Bezos is worth $130 Billion. His $10 Billion pledge represents only 8% of his total net worth. I’ve heard the argument that it doesn’t matter whether it’s $10 Billion or $50 Billion — at least he’s doing something to stop climate change. But that’s not how this works. His company is responsible for some of the worst effects on climate change, so he should be putting all his time and money into pushing company policies towards renewable energy resources rather than putting a band-aid on the problem. He has enough money to switch to renewable energy right now and achieve carbon neutrality right now. The planet can’t wait and, while Bezos probably understands this, his profits are more dear to him than the future of our Earth.
Amazon also pays nothing in taxes, a fact that many Democratic presidential candidates have pointed out over the last few months. Those same taxes could be used to pay for progressive environmental agendas that both grow the economy and fight climate change (one example is the Green New Deal). Not to mention the fact that the power of this $10 Billion to halt the effects of climate change lies within the hands of one man. He could have donated to existing organizations, but instead chose to stamp his name on an effort that he was pushed into by a major stakeholder. He will be able to determine which environmental measures should be implemented and which should not, who gets funded and who doesn’t. We don’t have time for these politics. And we can’t expect that a man like Jeff Bezos is genuine in his concern for our natural resources.
I’m not suggesting that companies shouldn’t invest in solutions to our climate change problem. I’m merely suggesting that it’s time for companies to see this not as a question of profit, but as a question of whether or not the human race can survive. I’m also suggesting that the power to influence climate change, like our politics, should not remain in the hands of a few. The reversal of climate change also requires a genuine effort to bring in labor and social justice activists to ensure that even the most marginalized communities are protected. These policies need to have actual impact rather than half-hearted attempts to quell consumer anger.