Bain's Sustainability Contrasts With Romney's Rhetoric
Bain & Company, the global consulting firm where Governor Mitt Romney started his career and returned in the 1990s, yesterday announced it has effectively reduced its global carbon dioxide emissions to zero. A Bain press release cites Steven Tallman, a partner and head of global operations: “This accomplishment is a major step in our commitment to sustainability.” The announcement, unremarkable were it not for the company’s profile in U.S. presidential election coverage, contrasts with Bain’s most famous alumnus’s political statements about climate change and policy stances on government support for emerging renewable energy technologies.
Search for “climate change” on www.mittromney.com and you’ll mostly find material quoting President Barack Obama’s statements on the need for climate policy. Nowhere that we found is Romney’s position on the two fundamentals of the U.S. energy-and-climate debate: (a) the reality of manmade climate change, and (b) what, if anything, to do about it. Romney said last fall: “My view is that we don’t know what’s causing climate change on this planet. And the idea of spending trillions and trillions of dollars to try to reduce CO2 emissions is not the right course for us.” Never mind that the phrase "trillions and trillions of dollars" is an inapt characterization of reasonable studies of the costs and benefits of climate policy. As the Yale climate change economist William Nordhaus recently wrote about the current cost of inaction on climate change, "the loss from waiting is $4.1 trillion. Wars have been started over smaller sums."
Perusing the quoted Obama statements on the Romney campaign site, one might come to the conclusion that all manmade climate change amounts to is a Democratic plot to expand government and raise taxes. If that were true, many global businesses, global institutional investors, global asset managers, national governments, municipalities foreign and domestic, houses of worship across every known faith, and much more, could be assumed to belong unambiguously to the U.S. Democratic Party. That doesn’t make any sense. There must be something else going on.
What’s going on is this: Global companies and investors driven by market trends, and ambivalent to Washington rhetoric, are changing their long-term strategies to accommodate the reality and scale of global change. Most U.S. political leaders are running in place. Multiple calls to a Romney spokesperson found a full voicemail box, and an email was not returned.
Sustainability is hard and takes time. Every company must ask itself new questions about long-term strategy. Smart companies are already identifying their long-term risks and opportunities, including Bain. The company describes making its operations carbon neutral as "comprehensive" and "multi-faceted" and "deeply embedded throughout the firm.” Bain says that sustainability is "an important priority for our employees and our recruits" -- but also, "increasingly important to our clients as well." For Bain, it’s meant investing in projects spanning wind power, biomass, forestry, geothermal and methane capture. The company's efforts were certified by the Carbon Neutral Company, a consultancy.
Five years ago, it was probably true that the most compelling sustainability ideas were coming from outside the executive suite. Today, most compelling sustainability ideas are coming from business executives who have wrapped their heads around the most influential megatrends for the foreseeable future -- global middle-class expansion and consequent consumption growth, resource scarcity and climate change. They have an eye towards their legacies and want to be on the right side of history.
Perhaps another way to say it is: Politics is short; sustainability is long. When will the pressures that are dramatically reshaping business modernize the U.S. political debate?
The original version of this post described Bain & Company as a private-equity firm. Bain & Company, where Romney worked from 1977-1985 and again in the early 1990s, is a consultancy that works with many industries, including private equity. It is a separate company from Bain Capital, the private equity firm Romney helped found in the mid-1980s, and returned to in 1992.
Bullard is global content director for Bloomberg New Energy Finance. Roston is sustainability editor of Bloomberg.com.
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