In 2009, only three in 10 American adults said dealing with global climate change should be a top priority. Over the past 10 years, this number has more than doubled: Nearly seven in 10 American adults say the federal government is doing too little to reduce the effects of global climate change, with six in 10 saying that protecting the environment should be a top priority for the president and Congress.
The Biden administration plans to address rising concerns about climate change head-on by investing $2 trillion over the next four years to escalate the use of clean energy in the transportation, electricity, and building sectors, and by re-signing the Paris Agreement. But will this renewed commitment be enough to create real and lasting change?
Awareness and Action Are Increasing, but Not Fast Enough
In 2006, Dr. John Kotter and Holger Rathgeber wrote the New York Times best-selling book Our Iceberg Is Melting: Changing and Succeeding Under Any Conditions. Its title notwithstanding, the book is not about climate change. It is a fable about leading complex transformational change efforts. While we at Kotter are not environmental experts, we are experts in the “science of change”—and it is in this context that we will examine the global response to today’s climate crisis, and how business leaders can take part.
The business community has become increasingly involved in environmental initiatives, from companies like Ford, Amazon, and Apple setting carbon-neutral goals, to consortiums such as the Business Roundtable calling on their members to pursue market-based solutions to tackle climate change. Yet, action has not kept pace with the rise in sentiment and awareness. At the close of the recent U.N. “Climate Ambition” summit in December, Alok Sharma, president of the COP26 U.N. climate talks in 2021, said, “Friends, we must be honest with ourselves. The answer to that [whether enough has been done to fulfill the promise of the Paris climate agreement] is currently: no. As encouraging as all this ambition is, it is not enough.”
Focus on the Opportunity—Not the Threat
While awareness of the climate crisis and commitments for change are rising, there are lessons from the science of change that can help business leaders continue this critical work. The following three key elements of successful and enduring transformations are particularly salient amid the climate crisis:
- Use Stubborn Optimism to Create Action. The reality is that climate change is a threat. Yet, research has shown that clearly and consistently articulating a positive opportunity, rather than focusing on a fear-driven burning platform, engenders more sustainable action. As Christiana Figueres, the architect of the 2015 Paris Agreement, has stated, “stubborn optimism” can catalyze action and change, so long as determination is unshakeable. Business leaders must remember that action builds. By creating ways for their organizations to start small and ladder up to bigger impacts, leaders can help drive society toward a singular opportunity: mitigating and adapting to the climate crisis.
- Create Alignment Among a Diverse Set of Stakeholders. For change to happen, key stakeholders must be aligned on a common goal—something that has yet to occur with climate change. While some people are focused on promoting our quality of life now vs. later, others are willing to reduce our current quality of life to protect the environment in the long-term. There have been efforts at global alignment through international agreements, such as the Kyoto Protocol and Paris Agreement; yet, lackluster accountability mechanisms and implementation difficulties have precluded expected or needed changes.
- Generate a Sense of Urgency without Panic. Creating change needs to start with influencers, such as business or political leaders, who will pave the way to building a broad coalition. As the group grows, it will attract more followers and change agents. Leaders must veer away from the false urgency and uncoordinated action that can result from doomsday messaging. Individual actions are helpful if they ladder up to a larger aligned goal, not if they are working against each other. Actions need to be focused on long-term sustainable change, as short-term feel-good wins could create complacency.
Not everyone is on the same level of understanding of the climate crisis, or why we need to act now. We often see this situation turn into a shouting match, where different perspectives turn up their volume, without tailoring their message, or truly listening. If you want—or need—someone to join your cause, you need to meet them where they are.
What Transformation Could Look Like
Addressing the impact of climate disruption is often driven by pressure from the outside. One example is the investor pressure underlying BlackRock’s 2020 focus on sustainability. BlackRock’s focus is not dissimilar to a sovereign wealth fund and current client, who set out to find climate-enabled impacts in their portfolios. They expected to find $750,000. Instead, they found $3 billion incremental impact of potential gains or losses due to climate change in investments.
We are seeing these pressures play out among energy clients in two scenarios:
- Move to Tomorrow—Now. We are working with several companies that need to fully transform their entire business to maintain relevance and market position due to increased customer pressure, tightening regulations on climate and carbon goals, and price pressure from losing market share to innovators or to second-grid set ups, such as people selling back energy from their home solar panels. Being successful requires a vast majority of people to get onboard and change how they work. Aligning around an opportunity upfront, in the case of one of our energy distribution clients, was how they started their five-year digital transformation. This alignment has been communicated using head and heart to meet each employee group where they are, helping them understand what’s in it for them and for the company, and what they need to do moving forward.
- Use Today to Create Tomorrow. Other firms we are working with need to increase profits to build a future alongside their current business model. A client in the extractive industry has created a “higher returns, lower carbon” mantra at the corporate level, and committed to using company profits to invest in new technology and methods to reduce their carbon footprint. A region that creates almost half of corporate’s global free cash is being asked to increase margins and “stay the course,” so the increased profits can be reinvested in their green tomorrow—essentially an internal carbon offset market. While this increases the carbon investment opportunities of the overall organization, it’s critical for leaders to help regional employees see how their work is the foundation of the greener tomorrow.
While the jury is still out on how President Biden’s investments and policy shifts will impact climate change, if responded to by business leaders with diligence and an innovative mindset, this disruption could easily shift from challenge to opportunity. It’s up to leaders to seize it.