“I was the Master of Ceremonies at a two-day corporate off-site: here is what I learned…”
Note: Comedians around the world are emerging as one of the most important and new voices on climate change right now. The following story is by one of the earliest and best, Australian Dan Ilic. Climate & Capital Media will be running stories by and about climate comedians who are bringing their unique perspectives — usually hilarious — on climate change.
Corporate sustainability sucks. It’s not a funny matter. What is funny is being the Master of Ceremony at a sales event celebrating ESG and “customer success” when some of the customers are the world’s biggest polluters, coal companies, fossil fuel extractors and exporters.
Environmental, Social and Governance, or ESG, is a self gratifying accounting process that’s designed to make the board, stakeholders and customers climax.
But the thing is, corporations have the power to have a huge impact, if they could understand how to wield their power in smart ways. But they don’t.
As MC for a huge two-day Australian corporate off-site, I had an inside look at how it all works. These are essentially large events designed to celebrate a company’s best sales efforts.
The company that hired me is a Software as a Service Enterprise Resource Planning platform (SaaS ERP) — you know, the huge software companies that grease the wheels of commerce around the world.
What is funny is being the Master of Ceremonies at a sales event celebrating ESG and “customer success” when some of the customers are the world’s biggest polluters, coal companies, fossil fuel extractors and exporters.
Straight-faced about ESG
During this event, on one hand they celebrated servicing customers’ cloud products to some of the world’s biggest polluters. The next minute they showed their green credentials to their staff by having a big “meaningful” conversation about corporate sustainability, not about how they are dealing with ESG themselves, but by bringing in a Big Five consultant to talk about sustainability in general. No joke.
There was also a spectacular gaffe at the start of each day where the president of the company gave an energetic video address in which he said, “We will continue to work with our customers to accelerate climate change.”
It’s unkind to bring up the gaffe. It was unfortunate. Yet truer words have never been said. This company proudly counts Woodside Petroleum, Rio Tinto, Yancoal, and South32 as their case studies in success.
ESG metrics double down on nothing
I learned a few things over these two days (and, yes, I know, I’m biting the hand that’s been feeding me) and I’d like to share them with the world:
- First, big corporations are doubling down on reporting for all things climate in order to be compliant with current and potential future regulations, and to appease stakeholders, not necessarily to reduce the greenhouse gas emissions of their companies or their clients’ operations.
- Corporations are furiously busy creating, confusing, and frustrating “busy work” in “sustainability” and are not educating their staff on the fundamentals of the need to have conversations with their clients. The conversation that is: We need to stop burning shit to make power and other things.
- That’s it.
It strikes me that staff at these big companies don’t have climate in mind when they’re selling cloud products to the biggest polluters in the world. They have their job security in mind.
And to some degree, fair enough.
With the most generous definition, the reality is the Scope 3 emissions of your shiny clean green tech company — that is the emissions that are created with your product after it leaves you — include the emissions created by your clients.
And, in case you didn’t know, the Scope 3 emissions of Australian fossil fuel exporters are the second largest IN THE WORLD!
After ruminating on it for a few days I had a thought about how these huge SaaS ERPs can exert power in meaningful ways to apply pressure to the climate-trashing Woodsides, Yancoals, and Rios of the world to do more.
Something easy, and something harder
The easy: ask the hard questions.
When sitting down with the fossil fuel extractors and refiners, ask the hard questions:
- When are you folks getting out of fossil fuels?
- What are you doing to pivot your business away from fossil fuel extraction and production?
- When are you going to pivot to cleaner green energy and green hydrogen and start to build the green infrastructure we will need for the next 200 years?
- So, do you folks have a sunset timeline for this world-terminating business?
It doesn’t matter that they don’t have answers for this — it matters that the questions — although uncomfortable — are asked.
This is soft power — to have one of your biggest vendors with millions and billions in customer lifetime value on the line asking you to do better is powerful.
The hard part: create your own carbon premium.
Enterprise Resource Planning software (ERP) is a life-long relationship for businesses to manage day-to-day business activities such as accounting, procurement, project management, risk management and compliance, and supply chain operations. The software is hard to implement, hard to maintain, and hard to extricate and move to another platform product. It infects every dollar spent.
This chokehold should be used for good.
Make the dirty clients pay
It seems obvious to me, if a bit more challenging at the start for ERPs to make polluting clients pay a premium. Why not? It would mean real money.
It could be as low as 5%.
But 5% is millions of dollars.
If you prefer, the conversation could be flipped the other way. You could use more carrot than stick for the same effect.
“We give a 15% discount for our customers who have a 2030 emissions reduction target and are beating it without carbon offsets.”
This is REAL power
Make them pay, then use that premium to offset the discount you give to carbon-neutral or negative companies.
This is your new BIG revenue generator! After all, many of these fossil fuel multinationals don’t pay tax so you may as well charge them…A LOT!
We need to stop burning shit to make power and other things.
This is not just for ERP companies, this can be for any company that deals with fossil fuel extractors and there are a lot of companies.
For businesses here in Australia where I work, the opportunities are huge to pivot out of fossil fuels first.
The next trillion dollars aren’t going to be made selling sunlight trapped in rocks underground.
They’re going to be in critical minerals, renewables, green hydrogen, and processing metals into green steel and aluminum right here in my home country.
It’s in your business’s long-term interest to move the market faster, you can do that with a Carbon Premium.
The risk is you lose a fossil fuel company as a client.
Your company isn’t: “working with our customers to accelerate climate change.”
Because whether you have a consultant from a Big Five consultancy speak at an event — or you have an app to track your staff’s CO2e — or you procure renewable energy to power your sovereign data center — it’s all for naught if the tools that you develop, that you sell and service are being used to rapidly extract, refine, export, and burn fossil fuels at scale to rapidly make life untenable on Earth.
We need to stop burning shit to make power and other things.
Creating a world where businesses can still do business — that’s the business all businesses should be in right now.
All it requires is leadership.
At your next board meeting — have the conversation — “When are we going to implement a carbon premium on X fossil fuel company?” You could find yourself leading an ERP revolution and becoming the favorite of fast-emerging climate solution companies while helping to ensure we actually have a world you can live and work in.