Roughly one year ago, I wrote an article for GreenBiz in which I argued for greater corporate sector engagement on the pressing economic challenges in coal mining communities. In particular, I argued for a more inclusive form of corporate climate change activism that would aim to create more shared opportunity and address some of the unintended social externalities resulting from the shift away from coal.
Since then, I've had conversations on the subject with numerous colleagues working in CSR and in the energy sector and came away both encouraged and discouraged. On the one hand, there is a growing recognition that more needs to be done to make this transition more just and equitable. Interestingly, for some companies, particularly in the tech sector, it aligns with a heightened awareness that social inequity, discord and division represent a threat to their businesses.
On the other hand, there remains a fair amount of reluctance to take some responsibility for how we've gotten to this point. So, let me try an analogy to move things forward.
Imagine for a moment that you're a 12-year-old and you've spent the day hanging out with your friends at your house. Your room is now a mess and your friends have gone home. Your mom and dad make you clean it up, even though most of the mess isn't your doing and you'd rather spend the evening doing something else. Shouldn't your friends pitch in to clean up? Yes, but they're already gone, hanging out somewhere else and leaving you to clean it up all on your own.
It's not unlike what's happening today in coal country.
For most of the 20th century, we took advantage of cheap coal to power the development of a modern, prosperous economy. We did this by building a system of coal production and combustion across the continent, even subsidizing coal-based energy to the tune of over $100 billion in the last 60 years alone. Who benefited? We all did.
It was an economic development strategy that seemed quite sensible at the time. We were fighting numerous major wars. Economies around the world were racing to get ahead, too. The ground under our feet had a seemingly infinite amount of cheap fuel that could power the American dream.
Whole communities were built to support the coal mining industry — not just in Appalachia, but everywhere coal could be mined — 25 states in all. Immigrants arrived by the thousands to do the dirty, often thankless work. In some places, such as Montana, Native American communities also benefited. Local economies emerged to support the people and the companies that we hired, albeit indirectly, to power our increasingly electrified and now digitally connected society.
It turns out it was a bit of an illusion. The social and environmental consequences have proven to be enormous and are entirely unsustainable. So we are in the process of moving on, and it's happening fairly rapidly.
As a result, coal mining and the communities that grew up around the industry are in serious decline. There remains a debate about what, if anything to do about it. On one side, there is a belief that this is all about creative economic disruption and that little can or should be done to help. It's like the friends who made the mess and left you to clean up your room all by yourself. The arguments often devolve into a series of whataboutisms, as in "What about Eastman Kodak?" or "What about the horse and buggy?" They generally fail to recognize the historical significance of coal mining's role in building our modern economy as well as the emotional power of coal mining iconography and its role in the American identity.
On the other side are those who believe that government and civil society have a role to play in addressing the deferred environmental and social costs of coal mining. The Appalachian Regional Commission, a federally funded effort to redevelop communities in the 13 Appalachian states, has been around since 1965 and has had occasional success. Nonprofits such as the Coalfield Development Corporation are pioneering efforts to help people learn new skills, start businesses and find new prosperity away from the coal mines.
Unfortunately, the loudest voices are from people who claim coal is not dying and that bringing the industry back should be our highest priority. Even coal miners will tell you this is fool's gold. Automation and cheap natural gas are not going away and they are the biggest causes of job loss and overall decline in the industry. Renewable energy has become a cheaper alternative to fossil fuels and that's unlikely to change, even in the face of a more hostile policy environment.
Nevertheless, in the absence of a more promising alternative, people in coal-producing regions will continue to be drawn to these policy arguments, particularly if they feel they are being neglected and their place in our nation's history discounted, which is all too often the case.
According to a report from the Brookings Institution (PDF), the projected total cost of economic redevelopment in coal country is likely in the tens of billions of dollars over a decade. Trying to bring back coal won't change that number. Existing economic redevelopment efforts won't be enough and the political will to substantially increase public investment just isn't there.
That brings us to the private sector. The big question is, why should we care? Companies in just about every sector of the economy are cleaning up their proverbial rooms by moving on from coal. Isn't that enough? Perhaps not. The more relevant question is whether the private sector has any responsibility at all for cleaning up the messes of the past and, if so, to what degree. In other words, as we celebrate new wind farms, should we also be looking back over our shoulders and doing something about the legacy problems we had a part in creating?
Back in the 1980s, the federal government confronted a similar problem with the Superfund program. Those who contributed to improper hazardous waste disposal in the past, even if it was legal at the time, were held liable for cleaning up the messes left behind. That won't happen here — the political will doesn't exist for new legislation and Superfund hasn't exactly been a model of efficiency. Yet, the underlying ethical construct is the same.
To truly fulfill the vision of corporate social and environmental responsibility regarding climate change, the private sector should consider expanding beyond its current thinking to fulfill that ethical obligation. Companies should engage more directly in rebuilding the communities that powered their paths to great wealth. Several of the U.N. Sustainable Development Goals practically demand it.
Furthermore, the private sector can do something about this problem in a way that aligns with shareholder interests. Mom and Dad, in the form of Larry Fink, CEO of BlackRock, and Bill McNabb, chairman of Vanguard, have put the investing world on notice by taking a more assertive stand on corporate responsibility. They seem to understand that companies that perform better on social and environment metrics also make better investments. With over $10 trillion in their portfolios, companies increasingly are listening.
Whether it's locating data centers and new facilities in coal country, investing a portion of well over $2 trillion of potentially repatriated profits in redevelopment projects and job retraining, or direct philanthropy — there are many opportunities to help these communities in need while also creating business value. That should please investors such as Fink and McNabb. Growth and innovation should be the result of this type of investment, even if the underlying imperative arises from a sense of ethical obligation.
In the end, it also should result in a greater sense of shared purpose between communities that don't talk to each other enough these days. That way, we'll do a better job of making sure that nobody gets left behind on the road to a cleaner energy future.
Leo Raudys is President of Raudys Strategies, LLC. He has worked in sustainability for over 25 years as a government regulator, corporate environmental leader for a Fortune 100 multinational retailer, and as a business development executive for a non-governmental organization. This article first appeared on February 23, 2018 in GreenBiz and is reprinted with permission.
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