While the climate, tax and health care package, now known as the Inflation Reduction Act of 2022, has made its way closer to passage than thought possible at any time in its 18-month existence, as the House Both the U.S. Commerce Department and the Business Roundtable — a group of nearly 200 CEOs from companies such as Apple, Walmart and GM who in 2019 pledged to address societal concerns alongside shareholder interests — have voiced opposition to his.
The bill, though scaled back significantly from previous iterations, still includes hundreds of billions in funding for climate and energy programs, making it a historic investment in addressing climate change.
In response, Patagonia CEO Ryan Gellert urged corporate members of those groups to put up or shut up when it comes to climate action.
“Many companies that belong to these organizations talk a big climate game — just look at their websites,” Gellert wrote in a LinkedIn post on Wednesday. “They should no longer be silent while the Chamber and the Business Table do their dirty work. If you talk about how your company is going to protect the planet, you should pay your fair share to help scale solutions for things like clean energy, transportation and manufacturing.”
BRT strongly opposes tax proposals that will discourage investment in the US.
— Business Roundtable (@BizRoundtable) July 29, 2022
The sticking points in the legislation that created this dissonance are the corporate tax hikes included in the bill, such as those that would have seen rates for those companies with $1 billion or more in profits pay at least 15%. Business Roundtable members like Google, Pepsi and Chipotle have invested tens of millions to make their operations more sustainable — and create slick marketing materials to promote their efforts — yet they stop short of advocating publicly for pro-climate policies and substantive, broader change.
The compromised version that now appears to have the support of all Senate Democrats takes away a lot of money the government could have if the carried interest “loophole” were closed, resulting in fewer resources to address issues that individual members claim of these groups. to support – which feels a lot like wanting change to happen, just not badly enough to help pay for it.
According to a 2021 report by Massachusetts Democratic Senator Elizabeth Warren (and verified by the Institute on Taxation and Economic Policy), an effective tax rate of 15% would have generated $22 billion in 2020 alone from the 70 companies that earned more than 1 billion dollars worldwide. earnings described in the report. Yet the Business Roundtable has demonized it in its ads throughout the year, always somehow failing to mention the part about it that only affects companies with $1 billion in revenue.
Gellert is not alone in his lament. Rhode Island Democratic Senator Sheldon Whitehouse has been beating this drum for years that while corporate lobbying of Congress occurs on nearly every industry and issue, the climate remains largely unaffected.
In 2020, he said, “There’s no company showing up to Congress on climate, except maybe Patagonia. . . . I’m involved in a series of secret climate talks with some of my Republican colleagues, but they can’t find a single corporation that will come out and say ‘I’ve got your back.’ It shouldn’t be too much to ask corporate America to align their lobbying with their stated values.”
These stated values are most often expressed in brand marketing. Just shoot an arrow at the list of Business Roundtable members, and wherever it lands, you’re likely to find a sensational climate video. Let’s throw some in, shall we?
Coca-Cola has an entire library of content dedicated to its sustainability efforts, all revolving around the company’s mission to reduce greenhouse gas emissions by 25% by 2030. As of 2018, Levi’s has had a Strategy of Climate Action 2025 that outlines the company’s plans for reducing its footprint, yet none of this includes lobbying the federal government to initiate or fund programs that will collectively reduce our nation’s emissions.
However, she did this stylish ad with climate activist Xiye Bastida.
I reached out to members of the Roundtable, Google, Apple, Pepsi, Netflix, Chipotle, and Nike for comment, and as of press time, have not heard back. I don’t entirely doubt the purpose of this work, but like Gellert, I’m frustrated to see so much noise – and money – spent, without enough real, tangible, collective action.
TheIt’s great to make changes at home, but if your efforts are isolated while you actively block impactful legislation, what’s the point? Regardless of intent, it all looks a lot like greenwashing.
Last year, Gellert basically told me the same thing. “The [corporate] the sector has historically been full of shit, and the sector is still full of shit,” he told me.
“They all say they’re all about the climate for their customers and their employees,” he continued, “[but] members of these two groups [the U.S. Chamber of Commerce and the Business Roundtable]— and I’ve seen the strategy papers, so this is not rumor or innuendo — are actively seeking to undermine the current package from the Biden administration, which includes really ambitious climate commitments.”
Climate scientist Mark Trexler said Restoring podcast this week about limits on individual corporate action: “Businesses are still focused almost entirely on their individual carbon footprint at the individual company level and saying, ‘Yeah, that’s how we’re going to make progress on climate change.’ Unfortunately, even if 20% of businesses reduce their carbon footprint, this does not solve climate change.
Taking the futility of individual company actions one step further, an investigation by the New York Times revealed Friday, there are two dozen Republican treasurers who are coordinating efforts to punish companies that operate in their states and want to reduce greenhouse gas emissions.
Last week, West Virginia Treasurer Riley Moore announced that banks such as Goldman Sachs, JPMorgan and Wells Fargo could no longer do business with the state because they had scaled back their coal investments.
Thankfully, by Friday, members of the Roundtable—including GM Chair and CEO Mary Barra—decided to break rank and pass the legislation. Barra signed a letter released by the sustainability nonprofit Ceres, which states: “Investments in the Inflation Reduction Act of 2022 would reduce climate-related risks across the economy by combating inflation, lowering costs for households and improving energy security. While these investments must be repaid, the economic benefits outweigh the costs. This package promises to unleash American innovation and ingenuity – and spur the creation of millions of jobs as a result.”
Other Roundtable members, including Carrier, Walmart and Salesforce, have also issued statements in support of the act. These not-so-spontaneous changes of heart are likely more the result of Arizona Democratic Sen. Kyrsten Sinema bringing back the vested interest loophole than Gellert’s call. Patagonia’s CEO is 100% right, but his public humiliation would have packed more heat if he had named and shamed those specific brands that “talk a big climate game.”
The battle behind this legislation over the past two years shows how corporations – and their brands with the public – need to turn their powers of persuasion to actively pushing for legislation that aligns with their sustainability ambitions so that everyone be held to the same standards and we go to a place where government and business are driving in the same direction.
Imagine what a great ad it could be.