Forget About Doing the Right Thing

Is Climate Action in Your Self-Interest?

“Climate action for companies is not about doing ‘the right thing.’”

That’s one of the most controversial things I tell general audiences. (Imagine the reaction I get when I’m talking to the Enviro 101 class at the University of Colorado at Boulder.) It makes good lefties crazy.

But today I want to look at why you, the oil and gas leader, should keep sustainability—including climate action—near the top of your company’s strategic priorities. Not because it’s “doing the right thing,” but because climate action is the right thing to do for your business.

I know that this advice sounds crazy right now, when company leaders from banking to tech are falling all over themselves to disavow anything that might look like a left-leaning agenda. But that’s not leadership—it’s a reaction to vibes, and therefore shortsighted. Instead, you chart a sensible, consistent course that includes real sustainability—a climate strategy to advance material business interests—as one of its parameters. Not because it’s the “right” thing to do, but because ignoring what makes business sense because it’s suddenly unfashionable is foolhardy.

And you’re no fool.

Both of these things are true:

• Everywhere you look, industry titans are disavowing their recent strategic priorities, from net zero to social media content policing to DEI priorities.

• Overcommitting on climate or diversity or content moderation was as foolish a year ago as swearing off those priorities is now.

Successful leaders chart a real sustainability course—one that cannot be knocked off track by political pendulum swings. That was true a year ago, and it’s still true today. Making the same mistakes that woke made—interpreting political pendulum swings as epochal shifts—will leave your company without a solid strategy.

The situation

With President Trump back in office, has The Moment arrived all at once? I’ve thought hard about whether we’re seeing the end of decarbonization or just a slowing energy transition. Lots of industry leaders I’ve talked to over the last year have agreed that The Moment was on its way, with oppositional forces converging to make clear that the energy transition is neither simple nor immediate. But why stop there? Why not just assume that the decarbonization train has been derailed?

Because there are myriad reasons why your company strategy should stay the course on all the things that were fashionable a year ago and wildly out of fashion today. To name a few:

• The middle way is a hedge. Sensible risk management is central to maximizing opportunities and mitigating downsides.

• Climate change poses material risks that you can do something about. There are known science- and data-driven material risks of extreme and changing weather. Everything from our current infrastructure to your future beach retirement is subject to these risks. So, duh, we should engage in reducing the emissions within our purview to mitigate the damages of the changing climate.

• Political winds will shift. Remember how you felt after the Biden administration took office in 2021? What you thought mattered then? The only thing you can be certain about is that the political dynamic of today has all the staying power of a newborn’s sleep schedule. Acting as if today’s changes are permanent is myopic.

• There are novel opportunities ahead. What will you miss if you are bouncing around like a pinball? The subtle shifts that signal emerging business opportunities.

Novel opportunities will result from managing two things today that you will need tomorrow: relationships and reputation. You don’t have to look back far (Trump 1, for example) to remember that companies that spoke out on behalf on leaving methane regulations in place and putting communities at the center of the project-siting strategies were well-positioned for the Biden era. When it came time to build partnerships to put forward sensible, new methane regulations or hub teams, those companies had an array of eNGO, academic, and community partners to work with. More on this in an upcoming Both True, about how to speak to your climate-centric stakeholders.

Seize the day

You can’t build a sound strategy on the shifting sands of vibes. Company leaders who keep a five-year-plus horizon can consistently tie their sustainability strategies to material business interests. That doesn’t mean just putting bets down on every real sustainability opportunity! Be selective through these three rules of thumb:

• Tie any action to a clear vision of the future and the company’s role in it. Strategic sustainability actions always fit into your well-articulated vision of the future. (Ruthlessly eliminate the wobbly ones.) My Both True “The Antidote to the Apocalypse” offers tips on crafting a vision that both is compelling to your suite of stakeholders and can provide a North Star to your strategy.

• Tie your actions to durable objectives. Company strategic priorities are non-political when articulated in the context of material business interests. Not every company needs to have net-zero aspirations nor significant investments in decarbonization tech. Whether or not your company does depends on your unique set of geographic location, stakeholder pressures, and customer preferences.

• Nod to, but don’t prostate yourself before, today’s politics. Although your business is conducted in a political context, you will succeed by keeping political pressures in context. They should be just one of many considerations that go into your strategic calculus.

Now what?

Adamantine is now offering scenario-planning workshops to our clients. These efficient, engaging meetings will help you assess and right-size your initiatives to ensure that you resist overcorrection.

• Reach out to schedule a virtual or in-person scenario workshop.

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To good sense,

Tisha