The Profitability of Destroying our Planet
When working in fast-paced industries and taking on innumerable initiatives to further company objectives, it is easy for employees and executives to forget to prioritize concern for the environment in their daily lives. With increasing awareness about global warming, conservation efforts, and our daily impact on the environment, companies and consumers are now shifting towards a greener, more sustainable approach. Air pollution, one significantly dangerous factor that harms the environment, can lead to several negative health effects as minor as asthma but also as significant as stroke, lung cancer, and heart disease.
Air pollution is also closely linked to climate change, which can lead to a catastrophic climate crisis in twenty years if it is not curbed. Just 100 companies are responsible for 71% of the greenhouse gas emissions since 1988, and only 25 corporate or state-owned organizations are responsible for half of all emissions since 1988, with ExxonMobil, Shell, BP and Chevron holding the top slots for investor-owned companies emitting harmful gases. This demonstrates that changing the business model of just a handful of large players has the potential to mitigate many of the damaging effects of air pollution.
Due to increasing scientific evidence of the impact these companies have on the environment — as well as public outcry — Big Oil has begun to increase R&D spending to enter the green alternative energy realm. Norway’s government-operated investment fund has chosen to invest $14 billion into clean energy projects, and Chevron, ExxonMobil and Occidental Petroleum have started developing technology to capture carbon and reduce methane leaks. An increasing number of deals — 148 since 2016 — have been made in alternative energy, and many companies claim to be pursuing technological ventures to reduce negative impacts on the environment.
However, the stark truth is that oil and gas remain far more lucrative than green energy alternatives, which essentially guarantees that Big Oil is nowhere near completely shedding fossil fuels to pursue clean energy projects. Despite efforts to satisfy their responsibility towards the planet, most oil and gas companies are failing to halt or reverse their destructive effects on the environment. Only 1% of spending by the biggest oil and gas organizations goes into green energy. Europe seems to be leading the charge towards these alternatives, with almost three-fourths of renewable energy coming from European oil companies, leaving the U.S., China, and Russia trailing far behind. Oil and gas companies spend a significantly larger amount of their budget on fighting against initiatives or regulations that on helping the environment. Big Oil has a long way to go if it, or its investors, truly desire to have a positive impact.
Unlike oil and gas companies, there are a large number of companies in other industries that have successfully adopted greener initiatives. Furniture giant IKEA has over 700,000 solar panels to power its stores and sources 100% of its cotton from farms that adhere to Better Cotton standards, while Unilever truly integrated sustainability into its identity and ensured three-fourths of its waste does not go to landfills. Patagonia has adopted an eco-friendly approach in its marketing by releasing ads that encourage consumers to reduce purchases of products they don’t need, Nike uses recycled materials in some products while also modifying packaging to make it more environmentally friendly, and Adobe achieved net zero energy usage while reducing its water usage by 60%. Businesses, big or small, can become greener themselves through practices like opting for reusable products, purchasing less paper, encouraging carpooling, offering telecommuting options, committing to clean energy, putting eco-friendly people in charge, becoming transparent, influencing partners in the industry, and attempting to modify government policy. The list goes on.
These practices have usually been demand-driven, as recent data has shown that consumers, especially Millennials and Generation Z, strongly support green initiatives and will even spend more on products that have a positive impact. Purchases of sustainable products had increased by 3% from 2017 to 2018. Although many consumers actively and passionately advocate for greener alternatives and state in surveys that they would fork out more money for these products, there is a significant disconnect between intention and action, with only 60% of consumers actually spending more in stores for greener alternatives.
The voices of consumers and promises made by large corporations have been incredibly supportive and amenable to adopting environmentally friendly, sustainable practices, but the data regarding consumer purchases and company spending tells a different story. There still remains a very powerful dissonance between public moves towards eco-friendliness and established practices that are profitable yet harmful to the environment. With 700 million cars on the roads producing 900 million tons of carbon dioxide each year, 100 billion plastic bags ending up in ecosystems and subsequently killing 1 billion birds and mammals each year, and 8 million tons of garbage dumped into the oceans every year, we need to do everything we can to put the brakes on harmful practices.
As co-inhabitants of a planet that is not solely ours, all consumers, businesses, government entities, and other organizations share a significant responsibility to preserve the environment around us. At the end of the day, corporate financial gains won’t matter much if the Earth has been completely destroyed, leaving us to fend in an environment riddled with toxic gases leading to innumerable health conditions, uninhabitable temperature conditions, and nothing but dead, ruined landscapes surrounding us. Only through systematic efforts, solutions that prioritize the Earth over a quick buck, and environmental awareness, can we strive to create a better, greener, healthier future.