Misguided social responsibility at General Electric
By Paul Driessen
Companies should always be honest, ethical and devoted to the well-being of our environment and the publics they serve: employees, investors, customers and communities alike. It's good business. It's socially responsible.
Unfortunately, many companies have succumbed to a siren's song that takes them far beyond these basic truths – into the dangerous shoals of "corporate social responsibility."
CSR could be a useful guide for businesses. Instead, it's been perverted into a huge multinational business – but without the laws and mores that help guide the behavior of for-profit companies. More often than not, special interest social and environmental groups employ CSR, disingenuous claims and horror-movie scripts as high-pressure tactics to promote their narrow agendas.
CSR activists call themselves stakeholders, and demand a controlling voice in all matters corporate. But they weren't elected. They have little or no ownership interest in the company. And their only real "stake" is a desire to advance their ideologies.
Their agendas typically oppose energy development and emphasize distant, minor, conjectural or exaggerated risks like global warming and "endocrine disruption." They pay scant attention to real, immediate, even life-threatening risks that their policies perpetrate or perpetuate in US and overseas communities that lack political and financial clout. Those stakeholders – the real ones, who will be severely impacted by the activists' policies – rarely get an opportunity to be heard.
Even worse, some companies don't just go along with these ethical travesties. They actively aid and abet them. A recent example, sadly, is one of America's most venerable and successful companies: General Electric.
GE's new "Ecomagination" marketing initiative describes and promotes its efforts to develop more fuel-efficient, lower-pollution technologies. We all hope it will take us as far this century as Thomas Edison's company and other innovators took us during the previous hundred years.
However, GE has coupled Ecomagination with a misguided campaign to "safeguard" the planet from "catastrophic" global warming – by lobbying for new laws that would impose mandatory greenhouse gas controls on consumers and manufacturers. Even more incredibly, the company has joined with the alarmist Pew Center on Global Climate Change, to support its lobbying campaign and promote its New Age "ethical" principles.
Gasoline is again hitting $3 a gallon. Natural gas and electricity prices are in the stratosphere. Consumers are screaming. Editorialists and legislators are railing about "obscene" prices and profits. Scientists are poking new holes in climate change theory and theology. Britain, Canada and other signatory nations are colliding with the granite-hard reality that complying with the Kyoto Protocol will hammer their economies, for no detectable environmental benefits.
And GE has teamed up with Pew to demand Kyoto clones that will send energy prices soaring even higher, destroy jobs, batter families, and further damage the US and global economies. What is CEO Jeff Immelt thinking?
Mr. Immelt is too bright a businessman, too familiar with science and engineering, to have become a true believer in climate chaos. Perhaps he hopes this "bold initiative" will mute CSRist criticism for a time. Or maybe he "ecomagines" the expensive new regulatory schemes will produce new customers, give GE an edge over competitors, and position his company to reap the rewards of massive new federal spending programs. None of this equates with ethics or social responsibility, however.
Time magazine, alarmist astronomer James Hansen, and Hollywood climate "experts" George Clooney and Julia Roberts are working overtime to convince Americans that global warming is already devastating our planet. But few scientists buy their apocalyptic theories, no real evidence backs them up, Earth's turbulent climate history belies the claim that something new is afoot, and the scary "scenarios" shouted by headlines and alarmist literature are the product of only superheated rhetoric and a couple of "outlier" computer models.
As genuine atmospheric scientist Richard Lindzen has observed, the political/federal funding process rewards alarmism, punishes skepticism and boosts spending on "alternative" energy technologies. Meanwhile, news stories and calls for action emphasize the impacts of theoretical catastrophic warming – "not whether it would actually happen," which is highly doubtful.
Moreover, even perfect compliance with Kyoto by all signatory nations would keep global temperatures from rising a barely detectable 0.2 degrees less by 2050 than if we do nothing. Unilateral US or statewide schemes would accomplish a tiny fraction of that.
But Kyoto compliance would cost $1 trillion a year – five times the price tag for providing sanitation and safe water for everyone on the planet – says Danish analyst Bjorn Lomborg. The annual economic impact of Kyoto on the United States could be several hundred billion dollars and over $2,000 per minority family, according to government and private studies.
None of this has kept the Pew Center from spending upwards of $5 million a year to insist that "climate change is a serious issue that demands immediate action." Nor has it prevented Mr. Immelt from saying, "It is time for the private sector to assume its rightful place as a major catalyst for environmental change."
This augurs ill for sound science and informed public policy. The effects are likely to be much worse for the poorest people on our planet.
The GE-Pew axis would exacerbate fear and loathing against traditional electricity generation that is urgently needed in the Third World, where 2 billion people still struggle to survive without electricity: for lights and refrigeration, hospitals and schools, shops and factories. As a result, 4 million people die annually from lung infections caused by breathing polluted smoke from wood and dung fires; another 6 million perish from intestinal diseases caused by unsafe water and spoiled food.
But radical CSR and environmental activists oppose fossil fuel electrical generation (global warming), hydroelectric power (damming rivers) and nuclear plants (too dangerous). Poor people in developing countries should be content with a few wind turbines or little solar panels "on their huts," says actor Ed Begley, Jr.
Has Mr. Immelt granted full stakeholder status to Third World communities and legitimate representatives of America's minorities and poor? Has he discussed his proposed policies and alliances with them? Now that China has become the world's second-largest oil consumer and third-largest oil importer, does he plan to lobby for drilling in Alaska, the Rockies and coastal USA, to ease supply-demand pressure on energy prices?
Prudence, ethics, social responsibility and plain good business sense suggest that he should do so, before casting his lot – and that of his company, its shareholders and customers, and the world's poor – with alarmist special interests like the Pew Center on Climate Change Anxiety and Disinformation.
Paul Driessen is senior policy advisor for the Congress of Racial Equality and Center for the Defense of Free Enterprise, and author of Eco-Imperialism: Green power ∙ Black death.
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