TRUMP PUTS BUSI­NESS VAL­UES TO THE TEST

CEOs have stood up to op­pose Pres­i­dent Trump’s im­mi­gra­tion ban. Will they show the same com­mit­ment to the en­vi­ron­ment? By N. Craig Smith.

NZ Business - - FROM THE EDITOR - N. Craig Smith is the INSEAD Chair in Ethics and So­cial Re­spon­si­bil­ity at INSEAD, the Pro­gramme Di­rec­tor of INSEAD’s Health­care Com­pli­ance Im­ple­men­ta­tion Lead­er­ship Pro­gramme and a spe­cial­ist professor at the INSEAD Cor­po­rate Gov­er­nance Ini­tia­tive. This a

CEOs have stood up to op­pose Pres­i­dent Trump’s im­mi­gra­tion ban. Will they show the same com­mit­ment to the en­vi­ron­ment? By N. Craig Smith.

En­vi­ron­men­tal reg­u­la­tions make com­mon sense. Laws which en­sure sus­tain­able de­vel­op­ment, tak­ing into con­sid­er­a­tion the needs of both present and fu­ture gen­er­a­tions, bring ben­e­fits not only to the en­vi­ron­ment but to the econ­omy as a whole.

With re­cent stud­ies iden­ti­fy­ing the most sig­nif­i­cant long-term risks faced by the world to­day as en­vi­ron­men­tal, cor­po­ra­tions are em­bed­ding in their mis­sion or val­ues state­ments a com­mit­ment to re­duc­ing their foot­print. It makes sense that gov­ern­ments should sup­port this and that ex­ist­ing reg­u­la­tions and stan­dards be met if not strength­ened.

So when we hear the leader of the world’s big­gest econ­omy, US Pres­i­dent Don­ald Trump, de­scribe en­vi­ron­men­tal reg­u­la­tions as “out of con­trol” and iden­tify a man who has spent six years su­ing the En­vi­ron­men­tal Pro­tec­tion Agency as his top pick to run it, alarm bells start to ring.

Hints that the Trump ad­min­is­tra­tion is ready to tear up the re­cently rat­i­fied Paris cli­mate change agree­ment, mak­ing good on his cam­paign pledge to boost oil and coal min­ing in­dus­tries by slash­ing reg­u­la­tions, sug­gest he has lit­tle con­cern for the de­vel­op­ment and en­vi­ron­men­tal needs of fu­ture gen­er­a­tions.

EN­VI­RON­MEN­TAL LAWS: NOT JUST FOR THE ELITE

En­vi­ron­men­tal reg­u­la­tions have been good for both the com­mu­nity and busi­ness in the US, es­pe­cially given the many busi­ness op­por­tu­ni­ties cre­ated through in­no­va­tion to ad­dress en­vi­ron­men­tal is­sues; de­vel­op­ing tech­nolo­gies in nu­clear and re­new­able en­ergy, as well as en­ergy ef­fi­ciency, stor­age and trans­mis­sion.

As noted in an ar­ti­cle by Tuck Busi­ness School Professor An­drew King and Har­vard Busi­ness School Professor Michael Tof­fel, Amer­i­can busi­nesses are poised to be win­ners in the tran­si­tion to a low-car­bon econ­omy. This ar­ti­cle was en­dorsed by 22 busi­ness school pro­fes­sors from the world’s lead­ing busi­ness schools and mem­bers of the Al­liance for Re­search on Cor­po­rate Sus­tain­abil­ity (ARCS), in­clud­ing the au­thor.

The in­tro­duc­tion of en­vi­ron­men­tal reg­u­la­tions to sup­port the shift to a low-car­bon econ­omy will cre­ate jobs and pre­vent lost work days, im­pugn­ing sug­ges­tions that en­vi­ron­men­tal reg­u­la­tions are part of an “elite” move­ment. The re­al­ity is they are con­sis­tent with con­ser­va­tive val­ues such as fair play and mar­ket com­pe­ti­tion. Most

cor­po­ra­tions to­day recog­nise this and openly talk about their com­mit­ments to cre­at­ing a bet­ter, more sus­tain­able world.

How far com­pa­nies will go meet these com­mit­ments in the face of an openly sceptical ad­min­is­tra­tion has yet to be chal­lenged.

CHAL­LENG­ING THE WHITE HOUSE

The busi­ness world has al­ready proved it has the temer­ity to stand up to Trump. Many pow­er­ful play­ers led the out­cry fol­low­ing the new ad­min­is­tra­tion’s ex­ec­u­tive or­der to ban im­mi­grants from seven Muslim-ma­jor­ity coun­tries en­ter­ing the US, a ban ini­tially in­clud­ing “green card” hold­ers who are legally en­ti­tled to be in the coun­try. At the risk of of­fend­ing cus­tomers, stake­hold­ers and staff (and be­com­ing the sub­ject of one of Trump’s vit­ri­olic Twit­ter tantrums), CEOs spoke out promis­ing to take fur­ther ac­tion should the bans go ahead.

Star­bucks CEO Howard Schultz was one of the first, vow­ing in an open let­ter to staff that the com­pany would “nei­ther stand by, nor stand silent” as un­cer­tainty over the new ad­min­is­tra­tion grows. Schultz backed up this com­mit­ment by an­nounc­ing plans to hire 10,000 refugees over the next five years.

The ride-hail­ing group Lyft also took ac­tion, voic­ing the com­pa­nies’ re­sis­tance in a let­ter to cus­tomers headed “De­fend­ing Our Val­ues”. Lyft pledged US$1 mil­lion to the Amer­i­can Civil Lib­er­ties Union, one of the big­gest le­gal ad­vo­cacy groups work­ing to fight against un­law­ful Trump poli­cies.

Nike pres­i­dent and CEO Mark Parker emailed em­ploy­ees, urg­ing them to "[stand] to­gether against big­otry and any form of dis­crim­i­na­tion” while Gold­man Sachs CEO Lloyd Blank­fein led Wall Street’s op­po­si­tion, send­ing a voice­mail message to all staff not­ing the cor­po­ra­tion’s op­po­si­tion to Trump’s or­der. “This is not a pol­icy we sup­port,” he said, ad­ding, “we will work to min­imise such dis­rup­tion to the ex­tent we can within the law”.

Re­ac­tion from the tech sec­tor, which re­lies on im­mi­grants to main­tain its in­no­va­tive tech­nol­ogy, was fast and fu­ri­ous. Ama­zon, Ex­pe­dia and Ap­ple and other heavy­weights joined a le­gal ac­tion to chal­lenge the travel ban. Airbnb CEO Brian Ch­esky of­fered free hous­ing to those af­fected by the or­der; LinkedIn CEO Jeff Weiner an­nounced plans to ex­pand the com­pany’s Wel­come Tal­ent pro­gramme for refugees in the US; Google cre­ated a US$4 mil­lion cri­sis fund for im­mi­grant-rights or­gan­i­sa­tions and vowed to “con­tinue to make our view on these is­sues known to lead­ers in Wash­ing­ton and else­where”.

The list goes on with CEOs of Face­book, Etsy, Net­flix, Twit­ter and Sales­force, among oth­ers, re­nounc­ing the new ad­min­is­tra­tion’s im­mi­gra­tion pol­icy, pledg­ing fi­nan­cial sup­port to op­pose it and mak­ing their com­mit­ment to di­ver­sity clear.

A Boy­cott Uber cam­paign over the com­pany’s un­cer­tain po­si­tion on Trump’s ex­ec­u­tive or­der re­sulted in over 200,000 cus­tomer ac­count can­cel­la­tions over the week­end fol­low­ing the travel ban. CEO Travis Kalan­ick’s par­tic­i­pa­tion in Trump’s busi­ness ad­vi­sory coun­cil fu­elled a shift to com­peti­tor Lyft and later prompted Kalan­ick to re­sign from the coun­cil be­cause his in­volve­ment was viewed as an en­dorse­ment of Trump. As well as cus­tomers, Uber driv­ers – many of whom come from the coun­tries af­fected by the ban – were deeply dis­ap­prov­ing of Uber’s ini­tial re­fusal to con­demn the ex­ec­u­tive or­der.

In many cases, busi­ness lead­ers spoke out against the ex­ec­u­tive or­der to be con­sis­tent with pre­vi­ously ex­pressed com­pany com­mit­ments to an­tidis­crim­i­na­tion and di­ver­sity. How­ever, many also re­mained silent, per­haps fear­ing a back­lash from Trump sup­port­ers among stake­hold­ers if not from Trump him­self. Oth­ers clearly had in­ter­ests at stake that were chal­lenged by the ex­ec­u­tive or­der, as Uber’s u-turn likely re­flects. If noth­ing else, Trump’s pres­i­dency ap­pears to be test­ing the au­then­tic­ity of com­pany val­ues state­ments.

The ques­tion now to be asked is, will these busi­ness lead­ers with the courage to speak out show the same pas­sion when it comes to meet­ing their ex­pressed re­spon­si­bil­i­ties to a sus­tain­able planet?

En­vi­ron­men­tal laws and reg­u­la­tions are vi­tal to a sus­tain­able fu­ture. Hav­ing them is good not only for the en­vi­ron­ment but for busi­ness and the econ­omy.

If the new Trump ad­min­is­tra­tion threat­ens this fu­ture security by mak­ing good its threat to tear down many of the reg­u­la­tions put in place dur­ing the pre­ced­ing eight years, and walk­ing away from its obli­ga­tions un­der the Paris ac­cord, will busi­ness be there to chal­lenge it? Just as they have spo­ken out about the threat to hu­man rights and re­stric­tions against im­mi­gra­tion, it is time for cor­po­rate lead­ers to stick to their prin­ci­ples and com­pa­nies’ mis­sions and stand up for the en­vi­ron­men­tal val­ues they pur­port to hold dear.

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