Corporate climate action is an advantage for employees

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In February, Bank of America offered its employees a notable advantage: If they worked at the bank for at least three years, and made less than $250,000, it would give them $4,000 to buy a new electric car. (Employees interested in simply renting an electric car can claim $2,000.) The move, linked to a round of company-wide salary increases, was not the first time the bank had made the offer; It made a similar one in 2015, and again in 2020, though those incentives also apply to gas-electric hybrids.

The Bank of America move won’t make a huge impact on climate change, but it’s also far from the worst climate action I’ve ever heard. Many corporate actions to reduce global warming don’t actually help the climate — and if they involve carbon offsets, they can. Add carbon in the atmosphere. But about 15 percent of carbon pollution in the United States comes from cars and light trucks, even though gasoline use, and thus carbon emissions, are disproportionately concentrated among the small group of consumers who drive larger cars and live in rural areas (which is intolerable be so). include many bank tellers or financial analysts). Now you’ve heard the talk: electric cars are cheaper to run and own than gas-powered cars in many states — but that’s if buyers can afford the bigger down payment. Support from your employer helps get you there.

Companies follow climate action for a number of reasons, but the Bank of America announcement helped explain one of the less discussed aspects of corporate climate action: it’s a functional advantage. When companies try to appear to be decarbonizing — or, more broadly, doing right by the climate — it’s not just their loyalty to anxious asset managers. In many cases, it’s also because they want to keep their employees – and their center-left employees, in turn, want to feel like they’re working in a virtuous place.

Bank of America’s offering makes this fact extraordinarily prominent (donate $4,000 to good news headlines), but you can see the same idea in some of the tech giants who first pursued aggressive climate action in the 2010s. When Google became “carbon neutral” in 2007, it was already sitting on a massive river of cash. It has since started running all of its data centers with renewable energy, cutting emissions. Apple and Microsoft did the same. Some technology companies are now aspiring to decarbonize; Frontier, an initiative based within payments company Stripe, is pushing to remove carbon from the atmosphere to help this carbon capture technology. But these companies have (and had) one thing in common: they compete in some of the nation’s tightest labor markets, and demand high-tech talent from a relatively small pool of qualified workers. These young, urban, and highly educated engineers and programmers are skewed disproportionately to the left as demographics suggest, so most tech workers are keen to see climate action.

Nor was the recent movement limited to tech companies. Frontier was sponsored by McKinsey, and dozens of Fortune 500 companies, including McDonald’s and United, made a kind of zero net pledge. This has been understood as corporate philanthropy, but it is also a kind of employee benefit. This is partly because education has become a stronger predictor of an individual’s political beliefs in recent years, bringing some sectors of America’s corporate and workforce closer to the left. At the same time, the need for companies to follow the wishes of their employees may be particularly acute at the moment, with labor markets tight across the United States. In other ways, too, companies are taking action that crosses the line between a political statement and job benefits: Many companies have already committed to paying their employees to travel out of state to receive an abortion.

However, even if labor markets slow as higher oil prices and higher interest rates put more pressure on the economy, competition in the tightest markets—young, urban, highly educated, and thus (and thus) progressive talent—will remain. These workers will continue to vote with their feet. In a way, corporate climate action at high-tech companies reflects the steep drop in enrollments in petroleum engineering programs: Young people are less interested than ever in spoiling the climate for their day-to-day jobs.

However, it is worth attaching some asterisks to this idea. First, just because corporate climate action appeals to employees doesn’t mean it can’t be dishonest or inadequate. Many progressives (and many conservatives) tend to set aside corporate climate action as nothing more than “greenwashing.” I am not saying that green washing does not exist; Instead, it is the employees, not the consumers, who are the main audience for the green wash.

Nor am I saying that the desire to look good is the only factor driving corporate climate action at the moment. Clearly, higher energy prices give companies an extra incentive to consider decarbonization right now. With gasoline priced at around $5 a gallon in the US (and much higher in Europe), companies have another reason to investigate electrification of their fleet or buy clean energy.

This is one reason why I doubt the Republicans’ ability to stop these efforts. As Florida Governor Ron DeSantis’ attack on Disney demonstrated, Republicans are now trying to get companies to behave in a less “vigilant” manner. Some of their proposed policies stem from the belief that CEOs and middle managers, sometimes empowered by the people in charge of big asset managers like BlackRock, operate outside the interests of actual investors. But if corporate climate action is partly a secondary phenomenon in the labor market, even a pervasive conservative system is unlikely to undermine it.

Last year, I wrote about the “green vortex,” a conglomeration of economic, technological and financial forces that have led a virtuous cycle of decarbonization with little government intervention. It’s time to think of work pressure – and the employee’s general desire for a “good employer” – as one of those major forces.

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