Time to remake corporations as stewards of the planet

August 3, 2012 | By | Reply More

In the June 7, 2012 edition of Nature (available online only to subscribers),Pavan Sukhdev, chief executive of environmental consulting firm GIST Advisory, offers a formula for turning corporations into environmentally responsible entities. Sukdev points out that our corporations tend to cater to rampant consumerism, and this is immensely damaging to the environment. The effects can be seen in the form of “emissions, freshwater use, pollution, waste and land-use change.” Corporations have also learned to excel at “influencing government regulation, avoiding taxes and obtaining subsidies for harmful activities in order to optimize shareholder returns.” Sukhdev describes this situation as “business as usual,” and describes the modern corporation as

On average, and economic agent lacking in social purpose and focused on financial return to shareholders. Not surprisingly, it produces today’s Brown economy, delivering private gains at the expense of public losses by increasing environmental risks and ecological scarcities.” Yes, consumers are part of the problem, but corporations are “in the drivers seat, and they are driving us in the wrong direction.

The corporations are much more to blame the consumers because:

Corporate advertising converts our insecurities into a chain of wants, needs and excessive demands, which have made our ecological footprint exceed the planet’s ability to produce resources and absorb emissions–by more than 50%.

Sukhdev proposes a new type of corporation that can be profitable while engaging in a truly green economy, not merely greenwashing. This new kind of corporation needs to measure and minimize negative externalities. It needs to build social capital: “competition, labor mobility and a culture of long working hours have taken a toll on people’s ability to build strong connections where they live.”

Sukhdev proposes four solutions:

Image by Sophiaworld/Dreamstime.com

1. Corporations need to measure and disclose disclose their destructive externalities.

2 corporations need to engage in accountable advertising. We need to prohibit greenwashing, Anchorage more information value in advertising as opposed to “selling value.” Advertising needs to become more and more a conversation between consumers and companies.

3. We need to limit the leverage of corporations-the proportion of borrowed funds v. the owner’s capital.Sukhdev explains that this over-leveraged has been a major cause of most global recessions, and because of too-big-to-fail banks, insurers, car makers and airlines.

4. We need to tax corporations at the point of the extraction of resources (mining of fossil fuels and minerals) rather than at the point-of-sale. This will encourage responsible use of resources and discourage wasteful packaging.

This is going to be difficult to accomplish, but we must do it in order to develop a “sustainable economy on a habitable planet.”

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Category: Corporatocracy, Environment, greenwashing, Sustainable Living

About the Author ()

Erich Vieth is an attorney focusing on consumer law litigation and appellate practice. He is also a working musician and a writer, having founded Dangerous Intersection in 2006. Erich lives in the Shaw Neighborhood of St. Louis, Missouri, where he lives half-time with his two extraordinary daughters.

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