Rishi Sunak’s decision to row back on Conservative climate change commitments – even though most acknowledge that some of those “scrapped” policies never actually existed – is a calculated risk that could spectacularly backfire as a general election approaches. Insiders reckon that the sudden switch away from net zero tactics, and their timeline, was inspired by the Tories’ surprise success in the Uxbridge by-election, where Labour’s defeat was blamed largely on Labour Mayor Sadiq Khan’s expansion across the capital of the ultra-low emissions zone (Ulez). The victorious Tory candidate, Steve Tuckwell, went so far as to say the mayor “lost Labour this election”. But if the prime minister was hoping his follow-up announcements, under the new Conservative party slogan of “Long Term Decisions for a Brighter Future”, would gain widespread approval he was swiftly disillusioned.
While governments dither, business leaders have focused on environmental change
After claiming he was not watering down the UK’s overall target of reaching net zero by 2050, yet at the same time pushing back the deadline for phasing out gas boilers and petrol cars, and scrapping plans to make landlords improve their properties’ energy efficiency, his personal popularity rating immediately dipped to an all-time low of -45. Business leaders are disappointed, the green lobby is enraged, and a majority of voters want consistency now rather than long-term promises. Multiple polls show that, in the UK and around the world, the public believes that time is up on long-term decisions, and immediate action is vital. Polls show, too, that people put more trust in business than in governments to properly commit to tackling the knife-edge global climate crisis. So, can capitalism, or capitalism in a revised form, lead the way towards saving the planet? While the old-school primacy of shareholder capitalism, de rigueur for the past 50 years, remains the way to go for its devotees, many, in both business schools and boardrooms, are reconsidering the way business is done.
Advocates of a new direction promote stakeholder capitalism, where the capital under consideration is also human and environmental. In this changed form, companies commit to keeping fully onside with all stakeholders, including customers and employees. It sounds logical. Consumers, particularly among the younger generations, already want to know more about where products come from and how they arrive. Before joining a company, potential young employees want to be assured of the firm’s positive environmental policies. While governments dither and battle to stay in power, business leaders have, for a number of years, focused on environmental change. In his 2020 annual January letter, Larry Fink, CEO of BlackRock, the world’s largest asset manager, flagged stability and the contribution business can make, stating that “climate change has become a defining factor in companies’ long-term prospects.” And earlier, in 2019, the International Chamber of Commerce highlighted that climate change is a “growing emergency” and that there needs to be a “significant shift in financial markets” to meet the imperatives of “long-term sustainability and environmental preservation”. Rishi Sunak’s switched environmental tactics may well appeal to his party’s right-wing base, but on a wider scale he might have got it completely wrong. At the same time, Labour’s Keir Starmer is hardly shooting up the popularity stakes with his own rating recently standing at -25. Voters realise that concerted climate action is imperative; most are tired of slogans and soundbites. With political stability diminishing from the US to the UK, war in Europe, tensions with China, authoritarianism on the rise and polarisation of views amongst the public, politicians’ seemingly glib environmental pronouncements are met with growing scepticism. So, is business capable of affecting global climate change? Can business find the solutions that governments have failed on?
