Finally, it appears, the deniers are moving to the edge of the debate. Slowly the delayers — the obscurantists and obstructionists and obnoxionists — are melting away like (dare one say it?) polar ice caps. The traditional (reasonable) CEO request of politicians is “Be clear, be consistent, and leave us room to make a profit.” It looks like they are about to get their wish: People who make policy, create markets, and write regulations — and global climate action will require all three — at last have an opportunity to make a world-saving difference, and give businesses a way to make plans.
Companies need a way to think about this soon-to-be-carbon-constrained world, and, frankly, few of them have thought much about it — some from active resistance, some from inattention. At a gathering of executives a few months ago, I heard one whose entire understanding of climate change was limited to replacing the light bulbs in her company’s offices and substituting tap for Fiji water. In a sense, you can’t blame her: this is one of those issues that requires an enterprise-wide framework and response: It’s a b board-level issue first and foremost.
Here are five questions every board should ask its CEO, only one of which has to do with light bulbs.
- What impact will a carbon-constrained world have on our income statement and prospects for growth?
- What are the implications for our balance sheet and risk profile?
- What new opportunities might we have in a warming world and under a regime of carbon constraint?
- How will our stakeholders be affected by carbon constraints, and how should we respond to them?
- How can we shrink our carbon footprint?
Every CEO should be able to answer them, in detail and with plans. Every entrepreneur ought to be able to address them, too — because they will redraw the landscape for you, too.
