Can environmentally conscious consumers convince businesses to develop sustainable practices, or must government regulations force their hand? According to United Nations officials such as Christiana Figueres, the executive secretary of the U.N. Framework Convention on Climate Change, governments cannot be responsive enough to quickly alter the negative impacts of human actions on the environment. As government, business, and academic leaders recently met at the CNN Earth’s Frontiers debate in Cancun, Mexico, many people are asking which organizations are best suited to lead the fight against global warming.
Figueres believes that businesses must be the first group to embrace sustainability and drag the government along with them. There may not be time for corporate leaders to wait until their governments act. Many industries are effectively gambling away their long-term viability by destroying the natural resources that provides for them. Short-term profits may be better right now, but long-term growth is unattainable if we continue to strip the planet bare.
Risk is inherent in any business. The most difficult challenge is determining the right time to take a step back and reinvest for long-term success. Businesses refusing to take a risk-averse approach when necessary will post better numbers for years until they eventually realize that their business model was actually counteracting its own future along the way. Is it always necessary for the government to nudge businesses toward long-term foresight, or is it a company’s own responsibility to act first?
One similar situation that would seem to support Figueres’s argument would be the recent struggles of the automotive industry in the United States. While General Motors and Chrysler needed billions of dollars in government bailout money to save them from potential bankruptcy, Ford took action years earlier to restructure its business model for long-term success. As the other automakers were earning higher profits at the expense of their long-term futures, Ford was cutting back and thinking about the future of the industry. Now that changes at Ford have had time to take effect, they are in a much better financial position than the other large automakers.
Businesses draining Earth’s natural resources may be saved by the government at some point, but like Ford they are better off if they act now and prosper later. Earth cannot withstand the damage that modern businesses are doing to it. It is inevitable that those businesses failing to protect it will see damaging repercussions some day. Political red-tape and bargaining may take years to determine the “best” solution to climate change, but profit-driven private businesses can act now and reap the rewards later.