Why We Need to, Have to, Want to Act on Climate

The battle to get companies to take sustainability seriously is essentially over. Even in the face of the “anti-ESG” movement — a very American phenomenon — there are vanishingly few large organizations around the world that really question the need to address environmental and social issues. (Even ExxonMobil, a company that has spent decades muddying the science on climate change, wrote in a recent report: “[On] a list of the biggest challenges facing humankind … addressing poverty and climate change would be at the top.”)

And yet, the question “Why should we do this?” persists.

I’ve spent two decades arguing that sustainability is good for companies. I’d love to stop making the “business case” — ideally because sustainability, like previous business movements around safety and quality, no longer has to justify its existence. But it still gets constantly questioned. So it’s useful to step back periodically and remind myself of the why behind it all, and to offer a simple framing for the growing ranks of those who are relatively new to the topic.

I see three main buckets of logic for action on our great environmental and social challenges, but especially on climate change. Businesses and their leaders should act, in simplified terms that can overlap, because we need to, have to, and want to.

Need to

I rarely talk about the science of the climate threat, preferring to focus on that business case. But let’s go there now and look at the hard realities about the climate, often dismissed as “doom and gloom.” In short, climate change, as the Environmental Protection Agency summarizes, means more intense and longer heat waves, droughts, and floods; rising sea levels; deep changes in rainfall patterns; and worse air and water quality.

That awful list translates into serious impacts on humans, including threats to food and water security, health risks and the spread of disease, loss of biodiversity (that is, the web of life we rely on), infrastructure breakdown, and what the U.S. military calls “threat multipliers” that affect national security. These are the base-level rungs of Maslow’s famous hierarchy of needs: eating, drinking, breathing, and physical (and financial) safety. Need to means literally the imperative to protect the resources we can’t live without.

The highly likely societal impacts are harsh, as large swaths of the world will become unlivable. Many cities and towns will be too flooded or hot to live in, leading to a massive, destabilizing migration of a billion people or more. Consider the stress on social systems and countries dealing with the recent rushes of “just” millions of people from Syria and Ukraine.

Data and estimates like these are quite often scorned as alarmist. Yeah, well, it’s pretty alarming. I struggle to find the right metaphors to make this real, but let’s think in terms of medical health. The world has received a severe (stage 3) cancer diagnosis, with some regions nearing incurable (stage 4) conditions. If the world warms another 1.5 degrees Celsius (2.7 degrees Fahrenheit), which we are rapidly approaching already, many island nations and low-lying areas will disappear. At 2.0 degrees Celsius (3.6 Fahrenheit), all the coral dies, ushering in unimaginable change to coastal ecosystems. Each half degree of warming is worse — not linearly but exponentially.

These are not hypothetical scenarios. Climate refugees, prolonged extreme heat, record wildfires, dry day flooding (in places like Miami), and record, once-in-a-generation storms coming annually are all happening now. Regardless of one’s concern for “saving the planet” — which, we should acknowledge, doesn’t actually need us — the imperative is clear: We need to act for our own thriving and survival.

Have to

Companies are grappling with a wave of new legal and market-based requirements around nonfinancial emissions and carbon reporting. The European Sustainability Reporting Standards and Corporate Sustainability Reporting Directive alone affect an estimated 50,000 companies. Multiple countries have their own laws mandating disclosure of carbon emissions in operations and supply chains, including the elaborately named German Supply Chain Due Diligence Act (in German, the amusingly one-word-named Lieferkettensorgfaltspflichtengesetz). California, boasting an economy bigger than all but four countries, has enacted its own aggressive carbon transparency laws.

As demanding as these regulations are, soft power can be just as important. For example, members of the CDP Supply Chain group — which includes hundreds of multinationals, led by AstraZeneca, L’Oréal, Microsoft, Walmart, and many more — are demanding that suppliers measure emissions or set science-based carbon targets. Younger generations of workers, who companies will have to attract and retain, want to work for (and buy from) companies that share their values, and climate change ranks as one of their top concerns. Communities will expect to see companies creating positive impacts before welcoming them to build or expand operations. And investors are increasingly analyzing how companies manage environmental and social risks.

Where the need to pressure is about survival in a literal sense, rising expectations of stakeholders, including regulators with legal power, leave no other option. It’s a powerful vise of have to pressure.

Want to

Here’s the “fun” bucket — the “look how much money you can make” story. No approach to business can promise only win-win outcomes, but pursuing sustainability offers clear value. Smart climate strategies cut costs, reduce risk, boost revenues, and build intangible and brand value. Take, for instance, energy efficiency or renewable energy initiatives, which can quickly reduce operating costs. Or look at the revenue opportunities from creating innovative solutions to decarbonize buildings, transportation, food and agriculture, and more. Developing sustainable products and services is a growth engine, with multitrillion-dollar markets in play.

In risk management, there’s a value to avoiding expensive disruptions from extreme weather. At the macro level, the U.S. alone had 28 extreme weather events costing more than $1 billion in 2023. Many companies feel these expensive events in their operations and supply chains. Insurance companies, specifically, are managing their risks by moving away from insuring wildfire- and flood-prone areas.

Cost, risk, revenue, brand — these value buckets are the basic elements of the business case. But let’s also consider another reason to want to tackle climate change: It’s the right thing to do, both for humanity and all other species. Sure, it’s relatively easy to see that when customers and employees reward companies for doing good, it creates value and drives profit. But how about just doing the moral thing? As humans — everyone in the business and investment communities is, last I checked, human — we find fulfillment in doing what’s right for others and ourselves. It is enlightened self-interest.

I’ve boiled down the case for action to need to (“we’re all going to die”), have to (“your stakeholders and the law demand it”), and want to (“you’ll be richer and happier”). Given the increasingly obvious climate crisis, I’m often frustrated that the need to logic isn’t enough. Of course, there’s been a concerted effort by vested interests, for decades, to downplay the coming environmental risks. And the fact that we need to do something is based on shared responsibility, while individual companies can tap into have to and want to logic all by themselves. Still, it’s increasingly surreal to be asked to justify investing in climate action for our very survival.

In the end, does it matter if business leaders are motivated by the biophysical imperative? Maybe not, but relying on the “good for business” narrative risks being slowed by the whims of business as new, shiny investment areas like AI dominate. It also means moving at a pace dictated by narrowly defined economics. Waiting until, say, the low-carbon option is immediately and obviously cheaper, we likely won’t go at the pace science demands. Companies and sectors looking to truly decarbonize look beyond short-term costs. They integrate hard-to-measure, long-term, systemic benefits into investment decisions, and use that broader view of value to align their pace with what the planet requires (in practical terms, that means committing to science-based targets, even without a perfectly delineated path).

To be clear, emphasizing the need-based logic does not mean neglecting profit. But it does mean taking for granted that we will decarbonize, and then working back from there, both collaborating and competing to do it cheapest and fastest. When people ask me why, if sustainability is better for business, it’s not happening more, the answer is partly that change is hard (witness thousands of books on changing your life or business). Inertia and habit are powerful. But reminding ourselves of why we need to, have to, and want to change will motivate us to move fast enough.

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