Why and how CEOs can make a Difference with Solving Climate Change

There is almost a unanimous consensus among the scientific community that climate change is an existential crisis for humans. Mitigating climate change is turning out to be more challenging than anyone expected because it is a problem that affects everyone, but no one is responsible for fixing it. Politicians and leaders, especially those in a democratic form of government, have so far failed as a result of the enormity of the problem and the longer time horizon of solving the problem. Democracies are better suited for solving problems with a shorter time horizon to justify their election or re-election. Thus, it begs the question who then is suited to solve this problem and how? Capitalism might offer part of the answer.

Even though not all countries are democratic, capitalism seems to have been well accepted in most countries, including in communist countries like China. People all over the world understand that the economy and jobs are better handled by a capitalistic system with limited interference by governments. Under this model there is one important decision maker in every capitalistic organization, and that happens to be the CEO.

Given the wide latitude CEOs generally have in decision making, it makes logical sense for CEOs who believe in climate change to become more engaged in solving this problem, especially when there are monetary and employee benefits. Employees generally will listen to a CEO better than they would to a politician or a government bureaucrat. Employees depend on the CEOs decision making skills for their paycheck and hence are more willing to give their CEO the benefit of doubt in support of his or her decisions. Of course, this assumes that a CEO does indeed want to play a role in solving this problem. I am sure not all the CEOs are comfortable taking a position in something like climate change, which unfortunately has become a political issue more than a scientific one.

As a Chief Executive at a Technology Company and a student of science and engineering, I started thinking about doing something with a small organization like EZLynx, which has about 350 employees, to understand how to motivate and incentivize our employees to be part of the solution. I have tried 4 different ideas so far and the results have far exceeded my expectations. I have outlined below a summary and the results of all the projects that we initiated in 2017-2018.

Before I write about the project It is important to understand that the United States emits roughly 5.5 gigatons of CO2 every year, which roughly equals 16 tons per citizen. A mind-boggling number and one of the highest per capita energy consumptions in the world. If you break this down into individual components, the 3 big contributing items are personal transportation, home energy consumption, and business or leisure travel. The projects I came up with were designed to address the big carbon footprint items in the list – car, home, and air travel.

Project GreenLeaf (Fall 2017)

This was our first project that we rolled out in mid-2017. It all started with me making a deal with a local Nissan dealer to buy the 2017 Leaf EV car for a final price (TTL inclusive) of $15K after applying $7,500 in federal tax credit. I offered employees up to a $10,000 interest free loan to buy any EV car, including used EV cars in some instances. We had to restrict to $10,000 because any amount above this would be considered by IRS as income for interest saved due to the zero percent interest deal. Although only one employee bought the Leaf, at the end several other employees bought other EV cars. As part of this program I also had 4 EV chargers installed in our parking lot, which convinced employees of my commitment to this project and further incentivized them to make the switch to EV. Today we have 12 employees driving EV cars and sometimes they wait for an open charger. In Texas, based on my calculations of energy consumed by each charger, we have saved the CO2 equivalent of roughly 30 tons annually through this program. This number can change based on the grid energy mix. More importantly this has raised awareness in the company and many employees are considering EV car for their next car purchase.

Project GreenLawn (Spring 2018)

According to the EPA, a normal gas-powered consumer lawn mower produces volatile organic compounds (VOC) and nitrogen oxides equivalent to 11 cars! This is a mind-boggling number because some VOCs and nitrogen oxides are many times more potent than CO2 in their greenhouse impact. Just before the start of the 2018 mowing season I decided to offer up to $500 per employee to buy any kind of electric lawn equipment. Response from our employees was overwhelmingly positive. Most employees were required to bring in their gas-powered lawn equipment for a lawn mower destruction party with pizza! We ended up spending $20,000 to replace 40 mowers with a total annual CO2 savings of 5 tons and other VOC emissions savings of the equivalent to 640 hours of car driving per year.

Project BlueRoof (Summer 2018)

Although EV cars are good in reducing CO2 emissions, they are not perfect because our electric grid is not fully clean yet. Thus, the logical next step was to encourage our employees to install solar panels on their homes to help clean up their electricity and save them money in the process. I was able to negotiate a price of $2,450/KW of solar panels installed with a local vendor and extend the $10,000 interest free loan for solar installation. So far, we have 4 employees who have made use of this with a few more in the works. Once again, the response has been better than expected with an estimated annual CO2 savings of roughly 17 tons.

Project GreenLight (Winter 2018)

We ended the year appropriately with light bulbs. Our company had accumulated quite bit of credit card spending points over the years, so I was able to redeem these points on something useful for the employees. As part of project Greenlight, employees were solicited to replace all their incandescent and CFL bulbs at their homes to new LED bulbs provided by the company free of cost. Again, the response surprised me, with requests for nearly 2500 total bulbs! A rough estimate of CO2 annual savings works out to 7 tons.

Project BlueSky (coming soon in 2019)

Air travel is one of the most environmentally damaging action that every business does. A 2000 mile roundtrip for one person will end up with CO2 emission of roughly 1 ton. Being a CEO and business person, I understand the importance of travel and meeting people face-to-face. I was able to review all the travel that our company did in 2018 and the total passenger miles came to a whopping 1.2 million miles with a total emission of 600 tons for a small company like ours. I would like to tackle this for 2019 by reducing the air travel where possible and/or offset the remaining miles through solar installation or some other offset program. I am also investing in state-of-the-art video conferencing system to allow for more remote meetings with the same experience as being face to face. I will follow up with an update on this once I finalize the details of this project.

It is obvious from the above projects that companies, and CEOs, have more power than they think when it comes to solving climate change problem. There is a general recognition and acceptance amongst most people that our climate is changing, and we need to do something about this. We don’t always have to come up with grand ideas that require billions of dollars to fix a problem. Sometimes simple ideas like the ones outlined above can make a bigger impact on our CO2 footprint while at the same time spread a positive message to our employees and customers. I also think it is important for companies to put a sustainability statement on their website that mentions your commitment to the environment and climate change. I urge all CEOs to do something to address the climate change problem sooner than later. We owe it to our shareholders, employees and future generation of our children.