NEW YORK (Reuters) - Leading climate science institute Woods Hole Research Center is taking its first run at directly influencing corporate behavior on climate change through a collaboration with global consulting powerhouse McKinsey & Co, Woods Hole told Reuters.
To fight global warming, the Woods Hole Research Center historically has worked with governments, the United Nations and investor groups concerned about climate change. But the rolling back of environmental regulations by the Trump administration, and investor-led campaigns to change how companies behave, have had mixed success.
To further its aim, the Falmouth, Mass.-based research center has paired up with the consulting firm and its think tank, McKinsey Global Institute, to take the fight straight to the C-suite.
“We’ve got to find new partners because the government is insufficient,” said Spencer Glendon, senior fellow at Woods Hole and the liaison with McKinsey.
Terms of the deal are not yet public, but it calls for Woods Hole to examine the effects of climate change on companies. That would afford Woods Hole access to McKinsey’s network of corporate leaders, and Glendon said they hope to use that access to convince companies to advocate for environmental regulation and to regulate themselves.
In return, Woods Hole’s research could give McKinsey a lead into the business of helping companies adapt to a new reality ushered in by climate change - whether it be moving headquarters, planning for a heavy carbon tax or reaching a limit on the amount of insurance the U.S. government can offer.
“This year, the McKinsey Global Institute launched a major initiative to better understand the specific risks and costs of physical climate change,” a McKinsey spokesperson said. “The Woods Hole Research Center is contributing its expertise and geospatial data to this endeavor.”
Woods Hole still advocates for governmental regulation. It continues to work with international organizations, which has included contributing to the five primary U.N. climate assessment reports.
Some experts expressed doubts that company-led change would prove sufficient.
“Private voluntary governance initiatives tend to work in very narrow circumstances. They work when you’ve got a market actor that’s very susceptible to direct consumer perceptions,” said Douglas Kysar, professor at Yale Law School, citing companies with educated, affluent customers who make decisions based on things like fair-trade certification.
That criticism has also been leveled at investor campaigns that push companies to meet standards known as ESG - environmental, social and governance criteria. Not only are standards often inadequate, but pressure from investors does not always produce results.
Groups like Climate Action 100+, a consortium of investors with over $33 trillion under management, last year successfully pushed Royal Dutch Shell to set carbon emissions targets. But their efforts to persuade shareholders at Exxon Mobil Corp to accept a series of green proposals recently failed, as did a similar slate of proposals at Chevron Corp.
Investor pressure remains a useful way to influence corporate behavior, said Glendon, who has worked as an adviser to Wellington Management and the California Public Employees’ Retirement System on incorporating climate concerns into their investment strategies. Approaching chief executives directly is simply another tool in their arsenal.
Reporting by Kate Duguid; Editing by Dan Burns and Diane Craft