Categories
Anthropocene

I blame the companies

ecocide — total destruction of an area of the natural environment, esp by human agency

All companies have ecocidal tendencies.

Some are ecocidal.

And a few are wrecking the planet on an unprecedented scale.

Does that mean those people that work in or for such companies are complicit?

It sure looks that way.

In other words, we’ve all got blood on our hands. If we haven’t then we’re very lucky or have made a conscious decision to own or work for a company that is restorative of the world and not destructive — i.e. we’re continuing to add to our anthropocentric woes. (I should add that I’m deeply suspicious of what Net-zero means, and even if you or your company has made a commitment to it, what does it mean in the overall scheme of things?)

I realise this is a complex picture, but it’s about time we opened a proper and meaningful conversation about the sine qua non of the company or company structure, given its historical significance, being birthed to take advantage of the flow of money into the Industrial Revolution and the exploitation of the Earth’s resources to fuel our unhesitantly, one-sided consumptive proclivities.

The question writ large is:

given the enormity of the Anthropocene (i.e. human extinction), is the company still fit for purpose?

I don’t think so.

Let me revert to the legal framework in England and Wales to make my point a little clearer.

Section 172 of the Companies Act 2006 (“CA”) describes the duties of directors (those with their mitts on the levers of control). It states:

172 Duty to promote the success of the company
(1) A director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to —
(a) the likely consequences of any decision in the long term,
(b) the interests of the company’s employees,
(c) the need to foster the company’s business relationships with suppliers, customers and others,
(d) the impact of the company’s operations on the community and the environment,
(e) the desirability of the company maintaining a reputation for high standards of business conduct, and
(f) the need to act fairly as between members of the company.
(2) Where or to the extent that the purposes of the company consist of or include purposes other than the benefit of its members, subsection (1) has effect as if the reference to promoting the success of the company for the benefit of its members were to achieving those purposes.
(3) The duty imposed by this section has effect subject to any enactment or rule of law requiring directors, in certain circumstances, to consider or act in the interests of creditors of the company. (my emphasis)

Now you could look at this section of the CA as some sort of hierarchy, with those duties at the top taking precedence over those that follow. Alternatively, you could say that they’re all equally important. Or, you could say that it depends a lot on the company size and its business operations. But it would be hard to say that the Company has any duty to consider if it’s adding to the climate catastrophe (which we know is the case right now), mitigating its operations or trying to completely re-engineer its business so that it no longer causes any or any measurable harm.

The truth is, despite attempts to improve this section, it’s simply (as a piece of moribund legislation) not fit for purpose. Arguably it never was.

I realise that there are strict reporting requirements and companies are in a desperate rush to outdo one another as to how quickly and how innovatively they can get to Net Zero but let’s be quite clear if you, qua director, had any semblance of a conscience apropos the earth and its beauty, you wouldn’t need to be told to do any of this.

Don’t be silly, Jules. 

Money talks and whilst shareholder value, profit, pensions and being the best in class is the moral order, the environment can, if not wait, play second, third or 10th fiddle to all the other competing demands.

Actually, I think this line of enquiry is a distraction, as is the law of ecocide — such that it exists and is enforceable.

What really concerns me is that companies are responsible for the climate catastrophe either by commission or omission and there’s no way of getting round this point. Thereafter, the question is whether they should be operating at all.

To illustrate my point, here’s an article from a few years ago which I’m doubtful would be much different to this day.

The Guardian today reveals the 20 fossil fuel companies whose relentless exploitation of the world’s oil, gas and coal reserves can be directly linked to more than one-third of all greenhouse gas emissions in the modern era.

Sure, I’ve no doubt that a few of them might be trying to steer the company in a different direction but when I read that China is building new coal-fired power stations and Russia intends to exploit oil reserves in the Arctic, you know we’ve got a massive problem. I realise that the companies involved are more than likely State entities and I’m not comparing like with like but nevertheless, my point still holds good that it’s the company that’s the problem and no other (legal) entity.

Like I said, this is a complex problem, not least because millions and millions of people depend for their livelihood on working for or in support of these ecocidal companies but at what point do we say:

This has to stop!

Of all things, we’ve (at least) movement in the banking and finance sector, driven in no small part by investor and consumer pressure. I’ve not got under the hood of how genuine this is but let’s just say, if there isn’t cheap or easily accessible money to fund projects or companies that can’t or won’t wean themselves off their destructive ways, then it will, I’m sure, make it harder for some of the worst excesses of ecocidal behaviour to be supported.

One last thing.

I accept that a lot of companies are in transition and are doing something to clean up their act, but no business is neutral of the natural world. Electric cars would be a good example. The raw materials still cause major environmental issues, and I’m thinking now of the battery technology and the whole life-cycle of the vehicle. What will become of all the old vehicles in the years to come?

I recognise that I’m missing out a lot of detail in this post and I’m skirting over some of the wider societal and cultural issues but it’s high time we started to question if the company is still fit for purpose and, if not, what should replace it in the years to come? Something more akin to a publicly-owned business or one more heavily regulated or one evincing better standards? All of these for sure but something has to give surely as otherwise, much like the ongoing litigation that’s beginning to gather pace around the world, I can see a lot companies being caught up in a hail of lawsuits and not all of these will be insurable.

As to the law of ecocide, which I’m aware of, sadly I don’t think it will have much effect on the day to day operation of the majority of companies which, at least in the UK, are SME businesses. It’s a brilliant start and I’m in awe of how far things have come from when the late Polly Higgins took up the cudgels but my view is that we have to get national governments on board, Trade bodies, directors, shareholders and lenders to look at the whole edifice of the company and really bear down on the causative issues apropos the company structure and operation and not simply to deal with the after-effects by dint of another (in my case) meaningless target or exhortation.

Anyhow, I’d love to know what you think about the established company order?

Take care.

— Julian