Patagonia CEO rightly calls out the Business Roundtable on climate

As the climate, tax, and healthcare package now known as the Inflation Reduction Act of 2022 has made its way closer to passage than at any time previously thought possible in its 18-month existence, both the U.S. Chamber of Commerce and the Business Roundtable—a group of almost 200 CEOs from companies such as Apple, Walmart, and GM who back in 2019 pledged to address societal concerns alongside shareholder interests—have voiced opposition to it.

The bill, though significantly pared back from previous iterations, still includes hundreds of billions in funding for climate and energy programs, making it a historic investment in addressing climate change.

In response, Patagonia CEO Ryan Gellert asked corporate members of those groups to put up or shut up when it comes to climate action.

“Many companies that belong to these organizations talk a big game on climate—just look at their websites,” Gellert wrote in a LinkedIn post on Wednesday. “They should no longer remain silent while the Chamber and Business Roundtable do their dirty work. If you talk about how your company is going to protect the planet, you need to pay your fair share to help scale solutions for things like clean power, transportation, and manufacturing.”

BRT strongly opposes tax proposals that would discourage investment in the U.S. We call on Congress to reject the proposed book minimum tax that would undermine proven bipartisan incentives that encourage capital investment.

— Business Roundtable (@BizRoundtable) July 29, 2022

The sticking points in the legislation that created this dissonance are the corporate tax increases contained in the bill, such as ones that would have seen rates for those companies with $1 billion or more in profits pay at least 15%. Members of the Business Roundtable, like Google, Pepsi, and Chipotle, have invested tens of millions in making their own operations more sustainable—and creating stylish marketing materials to promote their efforts—yet they stop short of publicly advocating for pro-climate policy and substantial, broader change.

The compromised version that now seems to have the support of all Senate Democrats removes a lot of money the government could have had if the carried interest “loophole” had been closed, resulting in fewer resources to address the issues that individual members of these groups purport to support—which feels a lot like wanting change to happen, just not bad enough to help pay for it.

According to a 2021 report by Democratic Massachusetts Senator Elizabeth Warren (and verified by the Institute on Taxation and Economic Policy), a 15% effective tax rate would have generated $22 billion in 2020 alone from the 70 companies that made more than $1 billion in global profits outlined in the report. Yet the Business Roundtable has been demonizing it in its own ads all year, always somehow failing to mention the part about it impacting only companies with $1 billion in profits.

Gellert is not alone in his lament. Democratic Rhode Island Senator Sheldon Whitehouse has been beating this drum for years, that while corporate lobbying in Congress happens around almost every industry and issue, climate remains largely untouched.

Back in 2020, he said, “There is no company that shows up in Congress on climate, except maybe Patagonia. . . . I am involved in a number of secret climate conversations with some of my Republican colleagues, but they can’t find a single corporation that will come out and say ‘I’ve got your back.’ It should not be too much to ask corporate America to align their lobbying with their stated values.”

Those stated values are most often expressed in brand marketing. Just throw a dart at the list of Business Roundtable members and anywhere it lands, you’ll likely find a climate hype video. Let’s toss a few, shall we?

Coca-Cola has an entire library of content dedicated to its sustainability efforts, all revolving around the company’s mission to reduce greenhouse gas emissions 25% by 2030. Since 2018, Levi’s has had a 2025 Climate Action Strategy that outlines the company’s plans for reducing its footprint, yet none of that includes lobbying the federal government to initiate or fund programs that will collectively reduce our country’s emissions.

However, it did make this stylish ad with climate activist Xiye Bastida.

I reached out to Roundtable members Google, Apple, Pepsi, Netflix, Chipotle, and Nike for comment, and as of press time, have received no responses. I don’t entirely doubt the intention of this work, but like Gellert, I am frustrated to see so much hype—and money—spent, without enough real, tangible, collective action.

It’s all well and good to make changes to your own house, but if your efforts are in isolation while you actively hold back impactful legislation, what’s the point? Regardless of intention, it all looks a whole lot like greenwashing.

Last year, Gellert essentially told me the same thing. “The [corporate] sector has historically been full of shit, and the sector is still full of shit,” he told me.

“They all say they’re all in on climate to their customers and to their employees,” he continued, “[but] the members of those two groups [the U.S. Chamber of Commerce and the Business Roundtable]—and I’ve seen the strategy docs, so this isn’t rumor or innuendo—are actively seeking to undermine the current package from the Biden administration, which includes really ambitious climate commitments.”

Climate scientist Mark Trexler told The Realignment podcast this week about the limitations of individual corporate action: “Businesses are still almost entirely focused on their individual carbon footprint on the individual company level, and saying, ‘Yeah, that’s how we’re going to make progress on climate change.’ Unfortunately, even if 20% of businesses reduce their carbon footprint, that doesn’t solve climate change.”

Taking the futility of individual company action a step further, an investigation by the New York Times revealed on Friday, are the two dozen Republican state treasurers who are coordinating efforts to punish companies that operate in their states and want to reduce greenhouse gas emissions.

Last week, West Virginia Treasurer Riley Moore announced that banks like Goldman Sachs, JPMorgan, and Wells Fargo couldn’t do business with the state because they’d reduced their investments in coal.

Thankfully, by Friday, Roundtable members—including chairperson and GM CEO Mary Barra—decided to break ranks and endorse the legislation. Barra signed a letter released by sustainability nonprofit Ceres that states, “The investments in the Inflation Reduction Act of 2022 would reduce climate-related risks across the economy while combatting inflation, reducing costs for families, and improving energy security. While these investments must be paid for, the economic benefits outweigh the costs. This package promises to unleash American innovation and ingenuity—and to foster the creation of millions of jobs as a result.”

Other Roundtable members, including Carrier, Walmart, and Salesforce, have also put out statements in support of the act. These not-so-spontaneous changes of heart are likely more the result of Democratic Arizona Senator Kyrsten Sinema getting the carried interest loophole restored rather than Gellert’s callout. The Patagonia CEO is 100% right, but his public excoriation would have packed more heat if he’d named and shamed those specific brands that “talk a big game on climate.”

The struggle behind this legislation over the past two years shows how corporations—and their public-facing brands—need to turn their powers of persuasion toward actively pushing for legislation that matches their own sustainability ambitions, so everyone is held to the same standards and we get to a place where government and business are rowing in the same direction.

Imagine what a great ad that could be.