In recent years, while covering corporate America and sustainability, I’ve learned a little about a lot of things and a lot about one thing: Why companies change. Many forces come into play: the desire of companies to attract the best people by giving them meaning and purpose as well as a paycheck, the transparency forced upon business by the Internet, the impact of social investors, government regulations, the (few) consumers who want to do business with companies they admire and, most broadly, the ever-increasing social expectations of business. But I’m often struck by the power of NGOs, large and small, to move big companies.
Some NGOs rely on praise, support, help and carrots to promote change. Other NGOs prefer protests, criticism, threats and stricks. Both are effective. Yes, changing corporate behavior is a bit like raising children, in that regard.
These thoughts came to mind when I saw how two people who I respect a great deal—Glenn Prickett, who runs the business and environment program at Conservation International and Mike Brune, the director of the Rainforest Action Network—disagreed about the significance of Citigroup’s announcement that it will direct $50 billion over the next 10 years to address global climate change. Citi will invest in alternative energy, reduce its own emissions, advise clients about the risks and opportunities created by climate change, etc. You can find Citi’s press release here.
Citi will not, however, stop financing polluting industries, like utilities that build coal plants, that make the problem of climate change worse.
Prickett was ready to cheer. He told the Wall Street Journal: “I think it’s a terrific move and it’s a sign that the financial markets are recognizing that global warming is here and needs to be solved and there is money to be made in solving it.†I agree, wholeheartedly.
Brune sounded grumpier. He told the Journal: “Spending $50 billion over 10 years is, of course, good and important but it’s not as significant as other things that Citigroup could do.†I agree with him, too. (RAN’s website has a clever headline: “Citi pledges $50 billion to fight climate change caused by its own dirty investments.)
Conservation International and Rainforest Action Network have each had an enormous impact on business. CI played a key advisory role to Wal-Mart as the giant retailer embraced sustainability. CI is pragmatic, incremental and business friendly. RAN has prodded Home Depot and a slew of financial institutions, including Citi, to take environmental issues more seriously. (I wrote a profile of RAN in 2004.) RAN is radical, critical and willing to engage in nonviolent direct action.
Can they both be right about Citi? Actually, yes. What Citi is doing is meaningful and praiseworthy, but the bank is not going far enough, fast enough. Citi deserves praise. Citi deserves criticism. Thanks to the diversity of the environmental movement, it’s getting both.
MORE: After this posted, Mike Brune of RAN sent me a link to a long, meandering but interesting article in London’s Sunday Times that explores these issues. A Citigroup exec explains that the bank needs to finance coal plants to keep the global economy growing. Dan Esty of Yale calls Citi’s climate change policy a “tipping point.” And Mike is quoted as saying: “It’s as if they are walking in to a burning building with a hosepipe in one hand and a can of gasoline in the other.â€
