January 15, 2014

American Corporations are Taking Climate Change Seriously

As delivered on the Senate floor

Mr. President, I am back now for the fifty-fifth time that the Senate has been in session each week, to urge my colleagues to wake up to the toll that carbon pollution is taking on our atmosphere, on our oceans, and on our people.  While climate change deniers continue to gin up phony doubt to mislead the public, top American businesses and corporations recognize the risks posed by climate change.  They are preparing for the economic fallout.  Members of Congress bury their heads in the sand, like the proverbial ostrich, hoping the issue will go away, wondering in some cases, recently, whether the recent cold front disproves decades of research and overwhelming scientific consensus.  Well, business leaders in the real world—not the political world, not the polluter-paid, phony doubt world—business leaders in the real world are doing what they do best.  And that is taking steps to protect their bottom line and maintain their relationships with their customers.

Major corporations—even those with large carbon footprints—are taking voluntary action to lower their own carbon output.  Some are joining broader efforts to support policies that reduce carbon emissions.  Some of our largest and most sophisticated companies are even factoring the economic burden of climate change into their own accounting and their own long-term planning by—guess what—assigning an internal price to carbon. 

The Bicameral Task Force on Climate Change, which I lead with Congressmen Waxman, wrote to over 300 businesses and organizations, seeking their views on actions the federal government could take to reduce carbon pollution and to strengthen our resiliency to climate change.  The response from the business community was very encouraging.

Some examples: Coca-Cola, headquartered in Georgia, wrote this, I quote:  “We recognize climate change is a critical challenge facing our planet, with potential impacts on biodiversity, water resources, public health and agriculture. . . . Beyond the effects on the communities we serve, we view climate change as a potential business risk, understanding that it could likely have direct and indirect effects on our business.”  That’s Coca-Cola.

Texas and Maryland-based Lockheed Martin told the Task Force of the major headway it has made in reducing its greenhouse gas emissions.  And I’ll quote from Lockheed Martin:  “From 2007 through 2011, Lockheed Martin reduced its absolute carbon emissions by 30 percent, and continues to focus on carbon emission reductions by championing energy conservation and efficiency measures in our facilities.”   Lockheed Martin.

Let’s look at Walmart, founded and headquartered in Arkansas.  Walmart wrote:  “We’re committed to reducing our carbon footprint and we’re working with our suppliers to do the same.”  Indeed I met yesterday with the general counsel from Apple, doing exactly the same thing.  Working to reduce their carbon footprint, working with their suppliers to push for reductions on the part of their suppliers.

Walmart’s 2009 sustainability report shows its long-standing commitment to fighting climate change.  Here’s what Walmart said:

“Climate change may not cause hurricanes, but warmer ocean water can make them more powerful.  Climate change may not cause rainfall, but it can increase the frequency and severity of heavy flooding.  Climate change may not cause droughts, but it can make droughts longer.  Every company has a responsibility to reduce greenhouse gases as quickly as it can.”  That’s Walmart.  “That’s why we are working in a number of areas,” they continue, “to reduce our Company’s carbon footprint, and also working with our suppliers and customers to help them do the same. Currently, we are investing in renewable energy, increasing energy efficiency in our buildings and trucks, working with suppliers to take carbon out of products and supporting legislation in the U.S. to reduce greenhouse gas emissions.”

That’s Walmart.  And I also want to commend the Walmart Foundation, the family foundation, for the work they are doing on oceans, as well as on the atmospheric aspects of carbon.

Let’s look at Mars, the Virginia-based candy company.  Mars states:  “We are committed to reducing our greenhouse gas emissions, in absolute terms, because this is the right thing to do.  As climate change has implications for the production of agricultural ingredients, addressing it requires changes to the way we source materials and manufacture our products.”  Mars, maker of the famous Mars Bars and M&Ms.

North Carolina’s VF Corporation, which makes major apparel brands like Lee, and Wrangler, and Nautica, and North Face, says this:  “We seek to conduct our business with the highest levels of honesty, integrity and respect.  These values are embedded in our approach to sustainability, which reflects our commitment to operating our business so future generations can live with cleaner water and air, healthier forests and oceans, and a stable climate.”

Toymaker Hasbro, from my home state of Rhode Island, has issued its energy pledge.  “Climate change mitigation is a pressing global issue,” it reads, “and we aim to reduce our corporate carbon footprint by improving energy efficiency and reducing greenhouse gas emissions at our sites.”  Hasbro, by the way, was awarded a Climate Leadership Award by the EPA in 2012 for excellence in greenhouse gas management. 

These companies and their products are household names in this country; they are major players in the American economy.  Lockheed Martin had annual revenue in 2012 of over $47 billion.  We trust them with some of our most important defense contracts.  Coke topped $48 billion, and may be the most recognizable corporate franchise in the world.  Walmart is the world’s second-largest company, with 2012 revenue of more than $443 billion. 

Mr. President, these are serious companies, and they are serious about their products and they are serious about their returns.  And in part, they earn their impressive returns by being serious about science.  And they understand the harm that carbon-driven climate change causes.  They see the unfair advantage that big polluters get when those big polluters don’t have to factor the costs of their carbon pollution into the price of the coal or oil. 

That’s why more and more leading businesses are calling on Congress to wake up and set new ground rules to even the energy playing field.  Mars and VF Corporation, along with eBay, Gap, Levi’s, Nike, Starbucks and other name brand American corporations, are members of the Business for Innovative Climate and Energy Policy Coalition—BICEP—which is pushing for energy policies that will draw down carbon emissions and boost economic growth. 

BICEP is just one of the impressive initiatives organized by Ceres, a non-profit organization that helps to mobilize investors and business leaders to build a sustainable global economy.   If we in Congress are willing to take on the special interests—the polluting special interests—that keep Congress barricaded, BICEP member companies and others will have our back. 

What we need to do  is to price carbon properly.  To get a right price for carbon.  That means making the big carbon polluters pay a fee to the American people to cover the cost of dumping their waste into our atmosphere and oceans—that’s a cost they now push off happily onto the rest of us. 

Well, because of the political control of the polluters over Congress, conditions do not presently allow us to price carbon. So Senator Boxer and those in our new Senate Climate Action Task Force, are pushing to change those political conditions.  While we do that–and we will do that, because we have the public, and the facts, and the science, and the imperative, both moral and practical, on our side—but while we’re doing that, these companies, these big name brand American companies have begun to assess their own internal prices on carbon.  A recent report by the Climate Disclosure Project, which gauges carbon emissions and energy use of major corporations, has identified twenty-nine large companies that use internal carbon prices in their operations or their long-term planning.  Some of these companies price carbon to drive energy efficiency.  Others see it as a smart way to prepare their business practices for the likelihood of a national American carbon fee.

Among those companies are some of the world’s largest oil and gas companies, as well as major energy consumers.  Some examples: ExxonMobil estimates that a price of $60 per metric ton of carbon dioxide will be assessed on carbon by 2030.  BP’s figure is $40 and Devon Energy’s is $15.  Some of the biggest carbon emitters in history are preparing for a price on carbon.  Let that sink in for a second.  The emitters have already baked into their planning a price on carbon.  Among other reasons, because they know it’s the right outcome.   

Who else is using internal carbon pricing? 

Well, Google assesses an internal carbon fee of $14 per metric ton that it uses to invest in green initiatives.  Likewise, Microsoft charges each of its organizational divisions a quarterly “Carbon Neutral Fee” of $6-7 per metric ton, the revenue from those divisions for that carbon fee goes—very similar to Google—to a central fund to support carbon offset projects.  Microsoft even published a “Carbon Fee Playbook” as a guide for businesses looking to establish their own internal carbon fees. 

Walt Disney Company—talk about a nameplate company—Walt Disney charges its subsidiary businesses a carbon fee based on their share of the company’s overall footprint.  “The higher the carbon footprint,” according to a company statement, “the more they pay.  We have built this into our capital planning process as well,” says Disney, “so businesses have to take the price of carbon into account while planning new projects.  The additional operational cost,” Disney says, “has started to incentivize businesses to seek methods to reduce their impact.”

Walmart ran the numbers, assuming an economy-wide carbon fee of $18 per ton.  The company finds, and I quote: “Walmart’s early action on emission reductions represents a competitive advantage.”  Walmart says their action on emissions gives them “a competitive advantage over other retailers that have not performed such projects.”

Investors, who are behind a lot of these companies, are also voicing concerns about the exposure of their portfolios to the effects of climate change and they are pushing for climate action.  The Carbon Asset Risk Initiative, also coordinated by Ceres, is a coalition of seventy investors worth nearly $3 trillion.  They’ve pressured forty-five of the world’s top fossil fuel companies to disclose the climate risks that are facing their investments in those companies.      

Should the oil and gas interests prove, should we say, evasive in answering? Well, investors may soon have other resources at hand to evaluate the climate risk to their portfolios.  Bloomberg News, for example, has developed for its readers the Bloomberg Carbon Risk Valuation Tool, a model which can describe the potential effect of carbon regulations on fossil fuel company earnings and share price.

Mr. President, investors and corporate executives take climate change seriously because of how they see it will hurt the bottom line.  And because of how it will affect their relationship with their customers.  They get it, Mr. President.  Big, nameplate, American corporations get it.  Unlike this building, and this institution, and the one down the hall, the Congress of the United States, the House of Representatives, which remain under the control and thrall of the polluting interests and won’t take action like these big, leadership, nameplate American corporations already have.  We can work with those big corporations, we have got to work with them to break the campaign of polluter-paid denial that has Congress barricaded.  That campaign of denial is as poisonous to our democracy as the underlying carbon pollution is to our atmosphere and oceans.  We need to clean them both up.  We need a democracy that is clean of polluter-paid denial, and we need atmosphere and oceans that are clean of polluter-emitted carbon.  It is time to push back on the misleading propaganda of the polluters.  It is time to recognize that our allies are out there to work with us.  It is time for us to wake up.

Mr. President, I thank you, and I yield the floor.