As Trump retreats, businesses assume new prominence in fighting climate change

Reporting from San Francisco —  In the fight against climate change, government and industry have traditionally been adversaries, as regulators try to force polluters to take costly steps to cut planet-warming emissions.

But at Gov. Jerry Brown’s global climate summit this week, some of the world’s biggest companies are in the spotlight as partners in tackling global warming. The private sector has emerged as a growing player in the alliance of cities, states and other institutions pledging to uphold emissions cuts of the Paris climate agreement, which has been disavowed by President Trump.

Industry giants such as McDonald’s, Walmart and Levi Strauss & Co. are rallying behind climate action, announcing plans to expand their use of renewable energy and establish science-based targets to reduce greenhouse gases to help the nation reach its goals under the Paris pact.

“It used to be that you expected government to lead and then investors and business to follow” said Mindy Lubber, chief executive of Ceres, a sustainability nonprofit that works with companies and investors. “It is completely turned on its head right now. The leadership on moving climate policy is coming from everywhere but the federal government.”

Corporate environmental efforts have been met with some skepticism, including questions of whether they mark an exercise in eco-friendly branding — greenwashing, as some call it — more than a true transformation in practices.

But business leaders argue that the scale of their operations is large enough to help achieve the goals of the 2015 Paris deal, in which President Obama promised to cut the United States’ emissions at least 26% below 2005 levels by 2025.

So far, nearly 500 companies have adopted science-based emissions targets in line with the Paris pledge, according to the global nonprofit Business for Social Responsibility.

A flurry of new ones came as the summit kicked off. Tech companies announced commitments to reduce carbon emissions by running more of their energy-gobbling data centers with renewable electricity. Kaiser Permanente revealed a plan to shift to renewable energy that will allow it to become carbon neutral by 2020. Banks and investors publicized shifting money out of coal and into renewables and other low-carbon portfolios. Retailers and restaurateurs said they would work with suppliers to squeeze greenhouse gas reductions from farmers and manufacturers.

Proponents of such pledges argue they are happening because there’s an increasingly clear business case for climate action. Companies are seeing more impacts to their operations and supply chains from extreme weather and other shifts driven by rising greenhouse gas emissions. They’re facing mounting pressure from consumers and investors to factor climate risks into their business decisions. In short, they’re realizing that tackling climate change, even if it clashes with U.S. federal policy, is good for business.

“Reputation really matters, and matters increasingly,” said Christina Herman, a program director for the Interfaith Center on Corporate Responsibility, a coalition of institutional and faith-based investors.

Some financial experts see in the corporate action a parallel with other politically controversial issues, such as same-sex marriage and immigration. Shifting public opinion has meant that some large companies have taken positions at odds with state or federal government — whether it’s to help their bottom line, generate publicity or protect their image with consumers.

Ironically, it was the Trump administration’s turn against the Paris agreement that spurred the American private sector to action, said Brian Deese, head of sustainable investing for BlackRock and a former Obama administration advisor on climate change. That includes large investors, who he said have shown growing interest in climate-friendly portfolios over the last 18 months.

Industry pledges on the environment haven’t held the same significance as government commitments because they don’t have the teeth of laws, regulations or treaties — meaning companies won’t face fines or sanctions if they fail to deliver.

But businesses point out that their commitments aren’t on the honor system either. Instead, they are subject to strict monitoring and oversight by scientists who measure how their operations affect global warming, and guide the actions they must embrace to ratchet down their emissions.

Walmart did the math on what it would take for the company to meet the Paris targets and used it to set a target of reducing its emissions 18% by 2025 while working with hundreds of its suppliers to reduce a billion metric tons of greenhouse gases by 2030.

Executives at McDonald’s, which has signed on to the We Are Still In coalition pledging to meet the Paris climate goals, said the company’s decision to commit to slashing greenhouse gas emissions from restaurants, franchisees, offices and suppliers was motivated by climate-driven shifts already impacting its supply chain, from coffee bean growers, fishing vessels catching cod and farmers raising beef. The company will seek to achieve those targets both by using cleaner energy and equipment at restaurants and working with ranchers to adopt more sustainable grazing practices and address deforestation.

“Climate change is the biggest environmental issue of our time, and we can’t have a credible sustainability strategy if we don’t address it,” said Francesca DeBiase, the company’s chief supply chain and sustainability officer.

A contingent of activists protesting outside the Global Climate Action Summit dismissed the corporate pledges as “climate capitalism” that serves only to polish the images of big, polluting companies.

“It’s nothing but a glorified trade show,” said Angela Adrar, executive director of the Climate Justice Alliance. “Those inside of the summit are saying that corporations can save the planet. But there is no smooth economic transition that can solve the climate crisis. We need a just transition that centers on workers and the communities that are most impacted.”

Herman said she understands those who are skeptical about companies’ motivations in adopting such emissions targets, but said they are difficult to dismiss.

“It’s really a rigorous process of setting targets and having them vetted by people who know what they’re talking about, that are going to be meaningful,” she said. “It is in the self-interest of the companies that are making these pledges to actually follow through, and investors are watching,” she added.

The number of companies agreeing to disclose their climate impacts has surged in the year since Trump quit the Paris agreement, said Paul Simpson, chief executive of CDP, a nonprofit that runs a global system tracking such information. Annual disclosures are important tools because they are one way companies can be held accountable for their pledges to act on climate.

The America’s Pledge initiative, backed by former New York Mayor and United Nations Secretary-General’s Special Envoy for Climate Action Michael Bloomberg, counts more than 3,000 cities, states and companies committed to stay in and work to reach the Paris goal. If that consortium were a country, Bloomberg said, it would have the world’s third-largest economy.

Even at that large scale, the actions aren’t enough for America to reach its Paris targets on time, but it will get the nation within “striking distance,” an assessment this week found.

“We have enormous economic clout, we have the market forces at our back and we have public opinion on our side,” Bloomberg told reporters at the summit. “So I like our chances.”

tony.barboza@latimes.com

@tonybarboza