Good morning.
Readers of this newsletter know I’m a fan of the “Purpose of a Corporation” statement put out by the Business Roundtable three years ago, marking the end of an era of shareholder primacy, and counting employees, customers, suppliers, the communities they operate in, and the planet all as equal stakeholders in the corporation’s business. Indeed, I published a book this year on the broader change in how corporations are approaching their obligations to society, Tomorrow’s Capitalist.
But for reasons not entirely clear to me, the BRT seems to have lost its environmental enthusiasm. In a Medium post last week, which was intended to reinforce the statement of three years ago, the organization omitted any mention of the environment. This followed its opposition to the (ridiculously named) Inflation Reduction Act (IRA), which in fact was a landmark climate action bill.
The folks at the BRT insist nothing has changed. And indeed, many of the group’s leading members—including chair Mary Barra of GM and past chair Doug McMillon of Walmart—signaled their support for the climate bill and have made extraordinary changes in their own companies to support the climate effort. Yet the BRT itself seems to have changed tack.
Why? There are lots of potential reasons. The Biden administration’s reluctance to acknowledge the necessary role of fossil fuels in an energy transition certainly angered many CEOs. The SEC’s relatively hard-line approach to climate disclosure also raised hackles. Eagerness to avoid the crossfire of partisan warfare certainly plays a role. And the BRT’s traditional objection to any increase in its members’ tax burden was clearly the key factor in its opposition to the IRA.
Let’s hope this change at the BRT doesn’t reflect a broader retreat by U.S.-based businesses from their impressive and laudable efforts to step up action on climate in the last few years. Even if it doesn’t, any successful effort to address climate change ultimately will require cooperation between business and government. At the moment, that cooperation is hard to find.
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
