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Conscious Capitalism

We started this blog back in 2008 but okay, here we go:

DAVOS — The powerful momentum of the global sustainability movement, driven by a younger generation, can carry a new era of stakeholder-focused capitalism forward, according to business and financial leaders speaking at the World Economic Forum this week.

At a CNBC panel on “Conscious Capitalism,” anchor Karen Tso talked to two members of the Business Roundtable, Nasdaq CEO Adena Friedman and EY chief executive Carmine Di Sibio, who were among the 181 signatories to the organisation’s statement in August, committing to the purpose of a corporation being to serve all stakeholders: customers, employees, communities and suppliers, as well as shareholders.

Di Sibio said the younger generation of employees (and customers) was a huge driver of this shift in emphasis for businesses. He said: “This is about talent, and it’s coming from the bottom up. People want to know you have a plan around sustainability when they join your company. We hire from college campuses all over the world and it’s the number one thing they want to talk about, and they are going to create more and more pressure.”

Friedman agreed: “The young generation who were at school ten years ago at the time of the crash are now moving up through organisations and expecting more of their companies. Regardless of the economic backdrop, the next generation of workers will demand more of their companies. Investment in climate change and social good is not just a bull market phenomenon.

And just when you thought it was safe to go skiing in the Alps with your favorite, enlightened global tech elites, don’t forget to cross check The Evil List.

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The thing about GROWTH

Interesting digression from Joel Klotkin about a dilemma that continues to plague us, which is also wrapped tightly around all efforts to de-couple ever-growing returns in economic activity from energy-intensive work and employment:

The global phenomena of low economic growth and rising prices has sparked middle-class-led rebellion—what one Marxist publication describes as “a strike against the rising cost of living.” While the specific issues may vary in each instance, the new protests are motivated by middle- and working-class fears that slow and de-growth conditions will “proletarianize” their once decently comfortable living standards.

Many of the progressive gentry dismiss these movements as primitive populism, producing detestable things like Brexit and the election of Donald Trump. But the “great revolt” has since expanded to countries with liberal cultures and evolved welfare states, including France, Chile,  even Norway and the Netherlands. In most places these rebellions are led not by perpetually outraged students, laid off workers, or angry immigrants, but by solidly middle-income workers who feel their long-term prospects, and those of their children, are increasingly dismal.

These fears are particularly acute for workers in environmentally inconvenient industries, such as energy, manufacturing, or home-building, who are losing their jobs or have been explicitly targeted for unemployment by the green Left. Those who continue to work in unavoidably energy-intensive industries like agriculture continue to be saddled with ever rising costs for critical commodities like diesel fuel. These energy price rises particularly impact most Europeans who drive to work.

This is obviously not unrelated to the perpetual ‘make the miners into coders’ solution that is stupid on its face (we don’t need that many coders) and insulting by implication (they can just do something else!).

The need for ever-increasing growth needs some re-imagined parameters. Instead of successive generations wanting their kids to earn more and more, what if our dream was for them to work less and less? What else might they do? Do you mean we can’t think of or value anything else beyond work? Is that the actual problem? The idea/reality that it is blasphemy to consider the merits of working a 20-hour week, or that we have trouble imagining these merits says far more about us that we should be comfortable with.

Hmmm. What’s Green?

Image by author.

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Climate Strike

I’ll take the day off here in solidarity, by republishing a post I wrote eleven years ago this month:

As a country we’ve made a living bragging about how ambitious we are, how audacious our concepts of freedom, liberty and happiness are as to make their fulfillment just a matter of conquering a lesser will.

Well, here’s the way to defuse most every geopolitical conflict for the next century or so, at least until things even out and Republicans can get elected again and start whining about socialism or how unjust their tax burden is. Cheap desalination powered with clean energy is the key to making the fossil fuels conundrum exit stage left. As the article points out these are massive public works projects with very sophisticated interactions with the natural environment; The question is not will they work, but do we have the will to make them work.

In the speech by House Majority Leader Nancy Pelosi yesterday that had all the Republican house members whining and crying with hurt feelings, she recalled that people around the world constantly tell her that the greatest emerging market in the world is rebuilding the public infrastructure of the United States of America. She said it could be done in a fiscally responsible manner. Even with only what we know how to do right now, it could also be done in a highly innovative manner, geared toward sustainably shifting our transportation and land-use conventions in the permanent direction of clean water and low-carbon power.

Building a green house isn’t green, but takes a lot of green. The reviewer says it at the end:

Maybe the real meaning of being green is closer to what modest Kermit had in mind: learning to make the best of what we already have rather than having to create, spend and construct something “eco-friendlier.”

Yes it is. One household living off the grid does not a difference make; we need to get the grid off the grid. Meanwhile, live close to work, know where your food comes from, spend and buy accordingly.

Image: Climate strike in Sydney, September 20, 2019. Photo from Kym Chapple on Twitter

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Tenther limits

Apparently, the 10th Amendment Sovereignty Movement is all well and good until it begins to effect air pollution requirements:

Because of California’s historical air pollution problems, the federal Clean Air Act gives California the right to establish stricter guidelines than the federal government — so long as it gets a waiver from the EPA. The Obama administration granted the state such a waiver on greenhouse gas emissions from cars, although the state and federal governments wound up agreeing on a joint plan to reduce carbon emissions by about 30 percent by 2025.

Almost from the day he took office, though, Trump has vowed to roll back the Obama standards, and laid plans to revoke California’s waiver.

That prompted California in July to engineer a major coup: Ford, Honda, BMW and Volkswagen cut a deal with Newsom and the California Air Resources Board to reduce carbon emissions at a far swifter rate than the Trump administration wants. The deal represents a compromise on the original Obama standards by giving the automakers an extra year, until 2026, to meet the climate change targets.

Newsom later announced that Mercedes Benz is on the verge of agreeing to the same standards as the other four companies.

The announcement reportedly infuriated Trump. Earlier this month, lawyers for the EPA and the federal Department of Transportation sent a letter to Air Resources Board Chairwoman Mary Nichols, saying the deal with the automakers appears to be “unlawful and invalid.” Separately, numerous media reported that the U.S. Justice Department had launched an antitrust investigation into the four carmakers’ participation in the deal.

Let’s make sure to stipulate just what we’re talking about here – the ability of the nation’s largest state to reduce carbon emissions. Civil right, gun control, healthcare, and voting standards must all be subservient to the wishes of purity-driven state governments.

Reducing carbon emissions and protecting people, the environment, companies and the Clean Air Act itself is a bridge too far.
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The new Feather-Knocker-Over-er, from Ronco!

Well knock us over with a…

The “shareholder comes first” has for years been the mantra of the Business Roundtable, a group that represents the most powerful CEOs in America and their thinking.

The group’s new principles on the role of a corporation released Monday imply a foundational shift, putting shareholders on more equal footing with others who have an interest in a corporation to some degree — including workers, suppliers, customers and, essentially, society at large.

“We know that many Americans are struggling. Too often hard work is not rewarded, and not enough is being done for workers to adjust to the rapid pace of change in the economy. If companies fail to recognize that the success of our system is dependent on inclusive long-term growth, many will raise legitimate questions about the role of large employers in our society,” the statement reads.

First, let’s think about presenting this as “news” ( it grows increasingly difficult to choose which word gets ironi-quoted)? Not just news but it was above the fold – meat space term for the top story on the site, as though the NYT (WAPO and others) wanted to make sure it was very definitely seen and just as likely unread, per their habits. Great placement! Either it’s meant for the shallow consumption of millions or the verification by the 65 to 85 people who mean the most to them. Theories welcome.

Unusually, I’m not a pitchfork sharpener. But let’s at least be a little skeptical about this gambit. CEO’s are now worried about this? I wonder why? Hong Kong, maybe. Hmmm, let’s think about that, broaden the context of what they’re saying because this may well be being introduced to lead exactly nowhere, as in See, We Talked About That Once. Kind of like a window of purses at Barney’s. Isn’t that nice?

But Hong Kong – complicated (why?). Scary (for whom?). 2047, huh. Interesting. Those people got born and are here now. But look over here – robot cars! Greenland?! What a goob!

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When at all costs

Quite likely, that the news of Oil’s decline will arrive long after it has actually begun to happen. That’s mostly the way most things work – just ask all the Hillbillies people Elegying worried that the demographics of the U.S. are changing!

Even so, BNP Paribas has startlingly concluded that the economics of oil “are now in relentless and irreversible decline”:

The report is good news for humanity because it means peak oil demand may be less than a decade away, which in turn means ambitious climate goals will be more affordable than previously thought.

But the bank’s analysis, “Wells, Wires and Wheels,” is devastating for Big Oil. It concludes that “the oil industry has never before in its history faced the kind of threat that renewable electricity in tandem with EVs poses to its business model.”

…

But one of the most startling findings is that because the cost of running EVs on solar or wind power is dropping so rapidly, the only way gasoline cars can compete with these renewable energy-powered EVs in the 2020s is if the price of oil were to drop to $11 to $12 per barrel. The current price of oil is over $50.

Even worse for oil, this economic analysis doesn’t even factor in many of the other benefits of running cars on renewable power rather than oil. These include the vast public health benefits of not breathing air pollution from burning oil, along with the benefits of not having huge oil spills and of not destroying a livable climate.

Couldn’t happen to a nicer, more thoughtful and civic-minded group. It would honestly have been much better had we just thanked them around 1967 and made the direct move to the obvious as it had already by then been long-imagined. But no. There were markets to dominate and profits to lose and wars to fund, thus the long drawn out halftime show that just embarrasses everybody with the need for enormous flags, jet flyovers and pale people in native costumes. Can’t enjoy this show and take no pleasure in their decades-late demise.

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Seeing Green – the ‘color-blind’ age

Films – our most powerful cultural vehicle – are, like our decisions about climate justice and immigration cruelty, only as good as the people who are making them. For a long time, the film industry hid behind a financial rationale behind the dearth of black, Latinx and Native American directors. Then it had to get even more sophisticated.

The NYT takes us back to the 1990’s, when supposedly everything was changing:

But as the decade wore on, a wall was re-erected, black filmmakers now say, and many of the same people who had been held up as the faces of a changing industry watched as their careers ground slowly to a halt.

“I was told that I was in director’s jail,” said Matty Rich, whose emotionally incendiary 1991 debut film, “Straight Out of Brooklyn,” won a special jury prize at the Sundance Film Festival that year. Major film studios hailed him as a prodigy. But he’s made only one other film since — in 1994.

Darnell Martin, whose vibrant 1994 romantic comedy “I Like It Like That” was the first studio-produced film to be directed by an African-American woman (it won the New York Film Critics Circle award for best first feature), said she was later blacklisted in the industry for speaking out against racism and misogyny.

“You think, ‘It’s O.K. — you’re like every other filmmaker,’ but then you realize, ‘No,’” she said. “It’s like they set us up to fail — all they wanted was to be able to pat themselves on the back like they did something.”

The New York Times recently convened a discussion with six directors who were part of a wave of young black talent that surged 30 years ago this month — beginning with the success of “Do the Right Thing” in July 1989 — only to come crashing down, as Hollywood in the 1990s and 2000s reconstituted itself around films with white directors and white casts.

It may sound obvious – it is – but the way filmmakers speak with a forward voice and vision is of course connected to those individual filmmakers. Our tender baby steps on diversity are quietly arriving after a very extended epoch of everything-else-has-been-tried-to-prove-we-aren’t-racist. Some remain convinced that everything hasn’t been tried, but still… teeny, baby steps. For more on the racial politics of the movie industry,  see this interview with the author of The Hollywood Jim Crow.

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Afford to do, afford not to do

What is the concept of afford, and does it work both ways? The question is not whether it can work two ways, but for the concept to be meaningful at all, it has to be fully operational with regard to meaning.

We’re not just deciding what to spend money on — wait, yes we are! In so doing, any action must be considered in the context of its opportunity cost, and with further unpacking of the consequences of not spending money on certain things, the consequences this decision assures.

For instance, Mr. Sarda said, it’s relatively straightforward for businesses to calculate the potential costs from an increase in taxes designed to curb emissions of carbon dioxide, a major greenhouse gas that contributes to global warming. Indeed, this is one of the most common climate-related risks that companies now disclose. But it’s trickier to take scientific reports about rising temperatures and weather extremes and say what those broad trends might mean for specific companies in specific locations.

Previous studies, based on computer climate modeling, have estimated that the risks of global warming, if left unmanaged, could cost the world’s financial sector between $1.7 trillion to $24.2 trillion in net present value terms. A recent analysis published in the journal Nature Climate Change warned that companies are reporting on these risks only “sporadically and inconsistently” and often take a narrow view of the dangers that may lie ahead.

The financial context of whether or not to do something – can we pay for doing the thing – extends in validity only as far as this framing is reversed: can we afford not to do something.

That is, the so-called cost of addressing climate change – or homelessness – large problems who’s answers supposedly involved gross amounts of expenditure that could be determined to be too large must also be considered in their reverse outlines. What is the cost of doing nothing? Is this affordable? Here the concept actually has meaning and may provide a constructive way forward.

But if we decide not to spend money on ameliorating climate change expressly because the measures are deemed prohibitively expensive, and yet the broad effects of climate change prove to be even more expensive than the proposed steps, then the affordability argument is invalid, if not disingenuous. While it may be the case that some consequences are unknowable in advance, that truth equally invalidates the affordability argument in advance. If it can’t be known whether a step would be worth it, it likewise cannot be known whether ignoring a step might be a price too high.

TL;Dr – Decisions made to ignore the effects of climate change must be taken for a reason other than the affordability argument.

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Fire mars sky

A city in Texas is grappling with being a city in Texas, and the questions are coming in existential batches:

Making sure ITC isn’t spewing toxic fumes doesn’t require fining it out of existence. It requires a serious commitment to safety and transparency, which are sorely lacking in this state. The Texas Commission on Environmental Quality has a history of lax monitoring and enforcement. And Texas has refused to require widespread public disclosure of chemical inventories and Risk Management Plans of facilities that would improve journalists’ ability to inform the public during a crisis. A reporter who wants to see a facility’s RMP has to make an appointment with federal marshals to view it.

Patrick Jankowski, senior economist with the Greater Houston Partnership, told business reporter Jordan Blum: “We need these facilities here because it’s how we get our products to market.

Of course. But what is a booming economy without quality of life? Without peace of mind? Parents sent their children back to Deer Park and La Porte ISD schools Tuesday, but they couldn’t have felt great confidence when school officials restricted outside activities. Houston ISD took the same precaution. Good to err on the side of safety, but no parent should have to fear that just walking to school might endanger their child’s health.

Nothing that calls for fatuous comment or commentary. It’s just a situation reduced to its plainly naked reality. Companies do what they want, the public has no say. Regulations are too onerous. We need these companies here for our products. And what’s up with the air?

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Acting Globally

Some [many] people want to do away with the social safety net, and especially any generosity remaining therein, to rely instead on the goodwill and support of charities to take care of those in need. There’s a cognitive dissonance about the reality that government-funded programs to help people are somehow perverse, yet giving to charitable organizations is not. Not that these fine citizens care about the lack of harmony between their world view and their actions.

But individual personal virtue can never displace collective action, particularly on the scale of a country the size of Ecuador, much less the United States. And the very same concept holds with regard to environmentalism:

Environmentalism-as-personal-virtue was a bad route. It isn’t a substitute for collective action. People don’t like being told how to live their lives, especially as you don’t have to understand this stuff all that well to get that we’re almost all big hypocrites. We make some easy choices and ignore the rest. We can make slightly better choices, but there’s no solar powered plane to fly me to Europe.

Yes, you can do things – live closer to work, own fewer cars – but not on the scale that’s needed to turn the tanker! Sprawl creates culprits of us all. Vote against it. Don’t move out there. Campaign for carbon-pricing, rail, renewable energy infrastructure and more affordable housing – built in the right places. Massive progress on things we’ve already figured out is what’s needed. Plus, less vehicles means fewer bumper stickers and perhaps, perhaps! even the need for them.