UNO March 2016

Francis, Obama, and a historical business commitment



2015 has been a historical year in terms of the quantitative and qualitative development of the vital importance of corporate social responsibility in business performance. The joint action of two great world leaders –Pope Francis and Barack Obama, the President of the United States– has led to a real shake-up in the ethical conscience of large corporations, making them assume decisive commitments to protect the environment, fight climate change, and restrict toxic emissions. The protection of the environment by the largest corporations –both energy and non-energy companies– has been, since the seventies, a crucial way to measure a company’s commitment to the environment. But it was not until the Paris Summit on Climate Change (30 November – 11 December 2015) that this commitment was materialised and generally accepted. The 1997 Kyoto Summit was the first step, albeit over reluctant, but the Paris Summit has had an irreversible impact on the universal conscience of humanity.

An unheard-of event took place in May 2015: a Papal encyclical devoted in its entirety to the environment (Laudatio Si´), in which Francis, the most pastoral Pope in the last fifty years, embraced the theses of ‘integral ecology’ and morally rebuked political and business entities and people who damage the environment. The Pope rejects the denialism of the theses that claim that the assessment of the environmental damage caused by humanity is a form of catastrophism, supports renewable energies, and states that ‘the Earth, our home, seems to be increasingly becoming a dung heap’. And he makes a strong accusation: ‘Politics and business react slowly, and are far from rising to global challenges’.

The Pope rejects denialism and supports integral ecology in his singular encyclical, making an urgent appeal to politicians and businesses

Large corporations felt that they were the direct targets of Francis’s encyclical –which was strategically published six months before the Paris Summit– but far from refusing the commitment demanded by the Pope –and his criticism– they adjusted their social responsibility mechanisms to the new scenario of demands expressed so strongly by a global moral beacon such as the Pope.

The President of the United States –when other issues seemed to overshadow his interest in climate change– made it a priority, and in October 2015, he achieved a great political success, as well as a great business success. One month before the Paris Summit, Obama met with eighty-one multinationals in the White House, announcing that they had ‘committed to establishing specific measures to halt climate change and reduce the emissions that cause it’. The measures assumed by these companies included a commitment to transparency, the reduction of carbon emissions, and cuts in water consumption.

02_1Obama addressed the companies involved in this social responsibility deal in extremely clear terms: ‘Historically, when climate change started being discussed, the perception was that it was an environmental issue, for tree-huggers, and that businesspeople either didn’t care about it or saw it as an issue that conflicted with their interests (…) Today, however, some of the most extraordinary businesses on Earth are represented here, as well as their providers’.

By the time the President of the United States was pronouncing these words, another substantial agreement had already been reached in July: about a dozen companies (including Apple, General Motors, and Goldman Sachs) had signed an agreement in line with Obama’s demands in advance. It is true, nonetheless, that crucial companies to reverse climate change were absent both in July and in October 2015: ExxonMobil and Chevron, among others. The White House’s intentions –expressed by Obama’s advisor on climate change, Brian Deese– consist in continuing in its efforts to include more companies in a planetary agreement.

The range of measures comprised within a company’s social responsibility is extensive and has many ways to pay back to society, creating a virtuous circle in the communities where they are active. But surely every historical epoch has its own mandates regarding the responsibility of corporations. The current mandate no doubt involves ending the planet’s environmental precariousness through control of the waste generated by energy consumption, which is the lifeblood of any industrial business. The extremely unfortunate case of tampering with software in diesel cars by the German multinational Volkswagen, involving 11 million cars all over the world, has aroused indignation, not only over the deceit, but also its consequences, which, while not affecting car safety, damaged the environment as these cars emitted no less than two million tonnes of polluting gases. VW cars emitted 40 % more of this gas (NOx) than claimed by the company.

The Paris Summit, towards which President Obama had worked so much, has been a historical showcase for the corporate social responsibility of the largest companies on Earth

It seems to be an essential rule that companies, particularly industrial companies, support corporate responsibility actions towards ‘integral ecology’ as the future envisages an industrial ‘renaissance’ in Europe –which is the main demand in the new production model in many European countries–. In Latin America and Asia, emerging powers are experiencing extremely rapid development dynamics that involve the consumption of energy –still mainly of fossil and nuclear origin, with the ensuing waste– which calls for a constant diagnosis of global warming due to emissions. In addition, the overall concept of the environment –as stated by Pope Francis in his encyclical of May 2015– extends to the preservation of hygiene conditions in cities, responsible water consumption, and the preservation of indigenous communities in territories that are highly desirable for the extraction and raw industry materials.

The latter consideration refers to new systems to obtain energy gas and controversial extraction techniques, such as fracking –with its corresponding advantages and disadvantages– which is widespread in the United States and will soon be used by the almighty China. Its impact on agriculture and livestock farming and the potential contamination of aquifers would pose risks that these new techniques should continue to assess and solve as extraction procedures become more sophisticated, in such a way that efficiency is made compatible with the protection of environmental values that are seen as red lines that business cannot and should not cross.

The current historical context requires large industrial companies to make a commitment to halt  climate change as a collective ethical imperative

The Paris Summit on climate change has been a great showcase for the new business scenario and an ethical imperative for large companies. Milton Friedman described corporate social responsibility as ‘a subversive doctrine in a free society’. This definition is no longer valid: what is subversive, more, is not being ethically committed to the environment while conducting industrial business. The Spanish CSR Observatory is a point of reference –in the case of Spain– to assess the progress of local companies in their sustainability commitments, with the proviso that, at least for the time being, managers’ proactivity should be supported by a demanding legislation and strong industry commitments as part of a global context that sets the guidelines for a universal commitment, so that Francis’s words in his encyclical come true: ‘while humanity in the post-industrial period may be remembered as one of the most irresponsible in history, humanity at the dawn of the twenty-first century will be remembered for having generously shouldered its great responsibilities’.

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