Transnational Corporations & Climate Governance | Faculty News | Spring 2020 | NEXUS Magazine | The Faculty of Law | UNB

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Examining the role of Transnational Corporations in Climate Governance

Professor Jason MacLean’s latest paper, Transnational Corporations and Climate Governance, is set to be published this winter in the Dalhousie Law Journal. MacLean’s paper comes on the heels of the five-year anniversary of the adoption of the United Nations Paris Agreement, which saw nearly every country commit to stabilizing the Earth's climate by holding global warming to well below two degrees Celsius above the pre-industrial norm. At the time, the Paris Agreement was hailed as historic and greeted with much optimism. Now, just five years after its adoption, there is a growing concern in the scholarly literature and among climate activists that countries are not acting ambitiously enough to achieve these goals.

Academics and activists are therefore paying greater attention to the role of non-state actors—e.g., civil society groups, international organizations, and corporations—in reducing global greenhouse gas (GHG) emissions.

MacLean’s new paper critically examines the role that large and powerful transnational corporations (TNCs) in particular might play in closing the emissions-reduction gap left by countries, especially large industrial emitters.

“Global climate change is transnational by its very nature. You have these non-state actors that—through their logistics, supply chains, and operational reach—are also transnational. They are not States, but in some cases, they are as powerful, if not more powerful, than States. TNC’s have an enormous impact on our climate and are increasingly considered as both a cause of climate change and a necessary part of the solution to climate change.”

What role should TNCs play in mitigating climate change?

According to MacLean, the predominant approach in the literature is the idea of collaboration—climate activists, environmental non-governmental organizations (ENGOs), provinces, cities, countries, citizens, and researchers should partner with TNCs to catalyze climate action. This argument urging cooperative collaboration coincides with the emerging trend of large corporations being very public and vocal about their climate pledges. Companies like Amazon, Microsoft, Walmart, BlackRock, and many others are releasing their own climate plans. Similar to countries’ pledges under the Paris Agreement, these TNCs are making commitments to reach net zero carbon emissions by 2050 or earlier.

Some of these plans, if implemented, will certainly help matters. This, in turn, has encouraged a number of climate policy scholars to argue that non-state actors, and TNC’s in particular, can play a leading role in reducing GHG emissions.

MacLean views corporate climate commitments with skepticism but acknowledges their potential. Amazon.com’s GHG emissions in 2018, after all, were roughly equivalent to Norway’s. If Amazon can reduce its carbon footprint, it can make an important contribution to climate action, both by reducing its own emissions and by demonstrating how other large GHG emitters can transition towards greater sustainability.   

“One group of researchers at MIT put this well. Because global climate change is a problem measured at the gigaton scale, we need to think about solutions that can be scaled up to the same level. At the moment, the actors best able to operate at that scale are TNCs—they have the greatest reach and power.”

At the same time, MacLean argues that climate policy scholars have to carefully scrutinize the fine print of corporate climate pledges to determine whether they line up with the level of ambition counseled by climate science.

MacLean’s paper dissects Amazon.com’s sustainability plan and climate pledge—a bold public commitment to become carbon neutral by the year 2040, ten years ahead of the Paris Agreement’s 2050 deadline.

“Everybody—countries and corporations alike—is falling all over themselves to make these commitments to be net-zero by 2050. But committing to specific targets by specific dates doesn't magically get you any closer to accomplishing anything—if the Paris Agreement and the related UN Sustainable Development Goals (whose 2030 deadline will not be met) have taught us anything, it’s that setting deadlines alone accomplishes nothing. Targets and deadlines are not credible unless they are accompanied by detailed plans. Forget 2050. Climate change is an existential crisis. What are you going to do next month? Where are you going to do next year? The 2050 net-zero deadline is only useful if we set interim milestones and create real plans to meet them, beginning right now. Anything less is just the latest form of misleading greenwashing.”

MacLean argues that Amazon.com’s sustainability and climate pledge is a case in point. It is fundamentally flawed and misleading.

Amazon, like Microsoft and Google, has a very profitable cloud-computing division called Amazon Web Services (AWS). AWS, like these other companies, works very closely with the fossil fuel industry by using cloud computing technology to expedite the location and extraction of fossil fuels. According to MacLean, this is just one of the ways that Amazon's climate pledge fails to live up to the policy implications of climate science. While Amazon’s pledge states that it will cut GHG emissions in certain parts of its operations, it does not account for the emissions that its business lines indirectly produce, including increased fossil fuel production as well as the emissions arising from the production and transport of non-Amazon-branded products shipped to and from Amazon’s distribution centres.   

MacLean also highlights Amazon’s promise of a completely electrified fleet by 2030.

“On paper, that looks amazing. But the problem is that those fleet vehicles include only the vehicles—and in some cases drones—delivering packages to consumers’ doorsteps. Hence the name: “Amazon’s last-mile delivery fleet.” Amazon has no plan to electrify the rest of its fleet vehicles, let alone its extensive global supply chain.”

Along with a growing number of critical climate policy scholars, MacLean considers pledges like Amazon’s as the second wave of corporate greenwashing—conveying false or misleading information to satisfy customers who increasingly want to see corporations act more sustainably. These pledges also work to stave off more stringent government regulation, as regulators take these pledges at face value, and in some cases even point to them as evidence of progress on climate change.

MacLean’s paper proceeds by examining the advocacy of a group of Amazon employees—who call themselves “Amazon Employees for Climate Justice”—who have begun to launch protests and walk-outs demanding that the company act more ambitiously on climate change, including the promotion of climate justice for vulnerable communities.

“They are Amazon employees, so they know the company extremely well. They did some excellent critical work when Amazon launched its initial climate plan, questioning it and determining that it was not as ambitious as it sounded—this is very courageous, and it’s not just Amazon’s employees that are beginning to step up like this. We are beginning to see more and more employees showing up to work at several large companies, including Google and Facebook, demanding that their employers begin to act more ethically, respect human rights, and act ambitiously on climate change.”

MacLean sees the potential for progress in these employee protests, highlighting a group of unionized Amazon employees in France who, at the beginning of the COVID-19 pandemic, successfully challenged their employer in court, demanding that Amazon suspend shipping all non-essential goods until it conducted a comprehensive health and safety audit of its distribution centres.

“We will continue to see these battles between corporations and their employees who are willing to risk their jobs to advocate for the public good. We should applaud their courage and follow their lead. I certainly intend to do so here at UNB.”

Ultimately, MacLean concludes that if TNCs are going to make a meaningful contribution to climate governance, they’re going to have to be forced to do so. The business model of TNCs—relentless growth premised on continual resource extraction—is, by its very nature, ecologically and socially unsustainable. Rather than cooperative collaboration, it's going to be a matter of conflict and coercion—at least in the initial stages. Groups like Amazon Employees for Climate Justice need to team up with other actors and regulators to even the scales against such large and powerful actors.

MacLean urges readers to avoid two common and counter-productive tendencies: (1) arguing that positive change is unlikely or even impossible, which breeds fatalism, and (2) uncritical cheerleading of corporate climate commitments, which breeds complacency—we don’t need to act, Amazon.com will save us!

“So, the question becomes, 'what's left in between uncritical cheerleading and hopeless fatalism?' We need to think about the kinds of strategic conflict that climate advocates will have to engage in, with both TNCs and public regulators. Ultimately, climate change is too important to be left either to governments or TNCs. Citizens must band together to demand more ambitious climate action and justice. No one is coming to save us.”

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