We wondered what our stakeholders thought about global warming and our voluntary plans to reduce our greenhouse gas (GHG) emissions. Do they believe it is vital that we find a common ground? We decided to find out by interviewing people who represent our stakeholders.
This was not an exercise in corporate PR; we wanted straight and independent talk based on mutual respect. So we asked L.J. Rittenhouse, a financial strategist, to interview 23 of our stakeholders. L.J., who measures CEO candor for a living, has a reputation for obtaining honest and insightful communication.
The people included in this report represent a cross-section of our stakeholders. They were chosen because we believed they would offer honest ideas worthy of our attention. Their words ring true. You will see for yourselves. Each stakeholder offered a piece of personal truth. When we put these views together, we saw patterns emerge.We began to see that common ground isn’t like a cultivated landscape; it looks more like connected dots or a patchwork quilt. We saw common ideas that when put together, reveal patterns of beliefs:
Global warming is a complex problem and must be dealt with holistically. The interaction between the atmosphere and climate and how this impacts worldwide economies, life styles and foreign policies is still being worked out. There is clear evidence that global climate trends may lead to uncertain and highly disruptive outcomes. Our wisest course of action will result not only from greater scientific understanding, but also from innovative economic, political and other solutions. If subjected to careful economic analysis, the resulting and balanced solutions won’t threaten our economic health.
Most climate models agree that carbon dioxide (CO2) and other GHG emissions are at historically high levels today. According to the Intergovernmental Panel on Climate Change: 1) CO2 emitted into the atmosphere stays there for over 100 years; 2) The continued burning of fossil fuels is adding to the levels of CO2 and other GHG in the atmosphere; 3) The rate at which CO2 is being released is greater than at any time in the history of the planet; and, 4) Atmospheric levels of GHG are significantly greater than at any time in the past 400,000 years. Facts such as these, along with common sense, point us in a common direction.
We must act now. Around the world today, at least 850 coal-burning power plants are on the drawing board. Once built, these plants will operate for between 60 and 80 years. Will they be designed with new technologies that burn coal more efficiently and with significantly fewer emissions, or will they be built using existing combustion technology? The need to accelerate the commercialization of new technology is critical. We put a man on the moon because we had leadership and public support for this mission. This same focused “can-do” leadership and public support are needed now.
Establishing systems that set out clear prices for GHG emissions will spur on innovation. Most developed countries now have clearly set rules in place that we lack in the United States. Business people in these countries can take actions, such as buying new equipment, trading emissions credits or planting trees, to reduce GHG emissions. Investments in these innovations will thrive in these countries. Similarly, we need clear price signals to keep up our leadership in the race to find commercial solutions to global warming.
The consumer is still king. Each of us makes choices each day that can reduce our impact on the environment. The people who make Subaru cars in Indiana believed over 10 years ago that they could make a difference. Last year, they became the first auto manufacturer to reach zero landfill status. They recycle everything that comes into their plant. As a result, they use less electricity while increasing productivity. As individuals, families and communities, we can adjust our own actions to use energy more wisely.
Good corporate governance is based on principles of stewardship. Capital stewardship means that corporate leaders must earn the public’s investment capital. They must invest this money wisely to sustain cash flow and earn profits. Similarly, environmental stewardship means using our natural resources wisely to ensure that future generations will have an environment that supports both life and prosperity.
Global warming requires us to think beyond ourselves. In past annual reports, we defined our stakeholders as people directly involved with our business. Global warming broadens this definition. We now talk about our neighbors in China and India. Some stakeholders we interviewed believe that developing countries are making responsible changes to confront global warming. Others believe nothing is being done. We need to learn what actions are actually now underway and what is planned for the future.
We may never know for sure. Every time we make a decision — whether business or personal — we base it on the best available information. The outcomes of our decisions become clear only after we act. With global warming, we can act today and not know the precise outcomes for several generations. “Science is a continuing exploration,” says Dr. Ben Brabson, a climate scientist. “We may never have full knowledge of the consequences of accumulating GHG in our atmosphere.” Not knowing everything is not a reason for inaction. We must follow the signposts and blaze trails. Our future and that of our children’s children depend on it.