On August 19, 2019, The Business Roundtable redefined the Purpose of a Corporation from shareholder primacy to that of stakeholder inclusivity. “This is tremendous news because it is more critical than ever that businesses in the 21st century are focused on generating long-term value for all stakeholders and addressing the challenges we face, which will result in
shared prosperity and sustainability for both business and society,” said Darren Walker, President of the Ford Foundation (1).
On June 23, 1988, Dr James Hansen testified a before Senate hearing that with 99% certainty global warming was the result of human activity (2). As revelatory as that testimony was, it seemed to have little impact on humanity’s use of fossil fuels and the release of greenhouse gases (GHGs) into the atmosphere. In 1988 the global CO2 emissions was 21.9 billion tons (3).
In 2020, global CO2 emissions was 34 billion tons from fossil fuels and industry (4). And atmospheric CO2 levels had risen from 352.57ppm (1988) to 414.01ppm (2020) (5).
In evolutionary biology there are two primary pathways for organisms to adapt and evolve: one is gradualism, and the other is punctuated equilibrium. Gradualism is just that – slow incremental changes/variations over long periods of time. With punctuated equilibrium change is pulsed. There are multiple generations in which there is no change and then there is quick and dramatic change in the species followed by generations of little change (6).
Complex systems grow to a certain scale at which time they need to restructure, redesign and redevelop themselves to maintain and maximize efficiency and effectiveness. With regards to global warming and climate change, We are at that Stage and Now is that time. Gradualism has shown that its method of adaptation and change is the wrong timeline for the scale and speed of the changes humanity needs to make if we want to have a chance at a bountiful future.
The last two weeks of May, 2021 should be a wake-up call to companies that have not adapted their thinking to the revised definition of the Purpose of a Corporation.
On May 27, 2021, Justice Mordecai Bromberg of the Federal Court of Australia ruled that the (environmental) minister could foresee the possibility of future harm caused to the children in the case by the increase in carbon dioxide emissions from Whitehaven’s expansion and therefore must recognize a so-called duty of care, or moral obligation, to the children, when approving it (7).
On Tuesday May 18, 2021, the International Energy Agency said all future fossil fuel projects must be scrapped if the world is to reach net-zero carbon emissions by 2050(8).
On May 26, 2021 a Dutch Court “orders Royal Dutch Shell, by means of its corporate policy, to reduce its CO2 emissions by 45% by 2030 with respect to the level of 2019 for the Shell group and the suppliers and customers of the group. The lawsuit claimed that Shell was threatening human rights as it continues to invest in fossil fuel production (9).
On May 29, 2021, Exxon shareholders voted to replace 2 board members with individuals who would address climate change and help guided the company in its clean energy transition (10).
On May 26, 2021, shareholders at Chevron voted in favor of a proposal for Chevron to cut the greenhouse emissions of its operations and suppliers as well as those of its customers (11).
On May 28, 2021, at its annual shareholders meeting, Total, largest energy company in France became TotalEnergies to reflect its change in focus to renewable energy and hydrogen (12).
There is a saying by Hopi Elders – “We are the ones we have been waiting for”
It is beginning to feel like the ones we have been waiting for are here and growing in numbers. Now we can shift from talking about the changes we need to make to actually making the changes.
Welcome to the world of punctuated equilibrium.
Tim
References
(1) https://www.businessroundtable.org/business-roundtable-redefines-the-purpose-of-a-corporation-to-promote-an-economy-that-serves-all-americans
(2) https://www.nytimes.com/1988/06/24/us/global-warming-has-begun-expert-tells-senate.html
(3) https://www.worldometers.info/co2-emissions/co2-emissions-by-year/
(4) https://earth.stanford.edu/news/covid-lockdown-causes-record-drop-carbon-emissions-2020#gs.29uhbz
(5) https://www.statista.com/statistics/1091926/atmospheric-concentration-of-co2-historic/
(6) https://necsi.edu/gradualism-and-punctuated-equilibrium
(7) https://www.reuters.com/world/asia-pacific/australian-court-says-mine-approvals-must-consider-climate-harm-2021-05-27/
(8) https://www.france24.com/en/france/20210521-french-oil-giant-total-rebrands-as-total-energies-in-climate-push
(9) https://www.reuters.com/business/sustainable-business/dutch-court-orders-shell-set-tougher-climate-targets-2021-05-26/
(10) https://www.tampabay.com/news/business/2021/05/29/at-least-2-exxon-board-members-lose-seats-in-climate-fight/
(11) https://www.washingtonpost.com/climate-environment/2021/05/26/exxonmobil-rebel-shareholders-win-board-seats/
(12) https://www.washingtonpost.com/climate-environment/2021/05/26/exxonmobil-rebel-shareholders-win-board-seats/
