Question: “The Wall Street Journal recently reported that several prominent environmental groups gave a “lukewarm” response to Citigroup’s announcement that it will spend $50 billion over the next 10 years on a wide range of climate change issues. How can corporations communicate effectively that they are “doing enough” for the environment?”
[Environmental Executive from Multinational Firm]
The Citigroup $50 billion announcement is very significant. It aligns with a trend we are seeing cut through the finance and investment community – which is greater scrutiny and value placed on how money is managed, invested, compounded and expended. Bank of America made a $20 billion commitment this past March. Like Citigroup, Bank of America is seeking to invest and finance in green building products, alternative and renewable energy technologies, and projects that minimi
ze greenhouse gas, particularly carbon, emissions. Before these announcements, Goldman Sachs developed an Environmental Policy Framework as part of its guidelines for investing in clean energy via its 2005 pledge of $1 billion. There is a cascading waterfall effect happening among the worlds finance giants. At first a little capital investment flowed into tech start-ups and environmental related projects.
ze greenhouse gas, particularly carbon, emissions. Before these announcements, Goldman Sachs developed an Environmental Policy Framework as part of its guidelines for investing in clean energy via its 2005 pledge of $1 billion. There is a cascading waterfall effect happening among the worlds finance giants. At first a little capital investment flowed into tech start-ups and environmental related projects. As the past 2 years have played out, the size of the investment and breadth of the investment has increased, as the flow of new environmental finance dollars has created a waterfall of change in the finance industry. There are some social and environmental groups that look at these finance industry trends with watchful eyes. They believe, in short, that these industries have been highly profitable and have collected billions from customers over the years in unnecessary fees to begin with. And, the lending practices of the industry, in general, have not aligned with environmental conservation or preservation in the past. So they feel that these large dollar commitments are a form of green-washing that society at large may not benefit from. We believe that the influx of capital into clean energy and environmental goals is a welcomed investment, and one that overshadows some government programs. The Citigroup, Bank of America and Goldman Sachs investments alone total more than $70 billion, many times larger the budget for the U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy. Even so, it’s the cascading effect of money and investments, the return on investment that these firms are seeking, that will drive greater future social and environmental investments that what’s been reported in the past 3 years.
The water is just beginning to rush toward the waterfall. Corporations have difficult time reporting that they are “doing enough” for the environment. The accelerated “fear factor” of climate change being played out in the popular press has the public more informed, but also more charged than ever before. Regardless of how much climate change may impact major environmental systems like fisheries, water cycle, agriculture production and forest resources – there is an increasing general public sentiment that every firm has a responsibility for action, not just the big utility, energy, or transport firms that emit a large percentage of greenhouse gases. Corporations need to align themselves with environmental goals that match their future competitiveness. This will include their products, operations, processes, competitors, markets and customers. If the “flat world” has taught us one thing, it’s that what is important to just one customer can rapidly become important to millions of customers through the click of the send button or snap of the digital camera.
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