Bezos Donates Billions to Fight Climate Change (February 22, 2020)

Bezos Donates Billions to Fight Climate Change (February 22, 2020)

Board Lens

Bezos Donates Billions to Fight Climate Change (February 22, 2020) founder and CEO Jeff Bezos this week pledged $10 billion to fight climate change through Bezos Earth Fund. The money, in the form of grants, will “fund scientists, activists, NGOs—any effort that offers a real possibility to help preserve and protect the natural world,” Bezos wrote in an Instagram post. Although the donation comes exclusively from Bezos’s own pockets, the largesse seems to answer a call for more CEO engagement in social causes: According to this year’s Edelman Trust Barometer, 73 percent of workers surveyed want their CEOs to speak up about climate change. Other large companies, including Microsoft and Google, have also recently made climate pledges, in part because they recognize that environmental initiatives are directly linked to attracting and retaining talent.

Employees are speaking up, too—and dishing out criticism to their employers. Since late 2018, Amazon Employees for Climate Justice have been pressing the company to minimize its impact on the environment, including halting support of oil and gas companies through no longer providing them with Amazon cloud services and discontinuing the funding of climate change-denying groups. Furthermore, the activist group spotlighted that order shipments and cloud data centers fuel the company’s carbon footprint of 44.4 million metric tons of carbon dioxide, as of 2018. Preempting an employee walkout in September 2019, Amazon revealed its Climate Pledge, which claims that the organization will work toward achieving the aims of the Paris climate agreement and becoming a carbon-neutral company by 2040.

Implications for Boards: While Bezos’s personal donation is aligned with Amazon’s own environmental efforts, the highly politicized—and divided—environment and culture of our country means there may be disconnects between the stance of the CEO, the company, and employees on any number of social and political issues. In addition, with rising public interest in corporations to take a stand on social issues, the decision to issue a response or stay silent each carry risks and opportunities. Boards should understand what parameters are in place to guide how the CEO represents the company—and consider adding guiderails if they aren’t already in place or offering communications coaching. Because company employees may also organize to take a stance on issues—and offer public criticisms of the company—boards may want to be aware of company policies that place parameters around employees’ freedom of speech and what behaviors might net them disciplinary action. 

Key Questions Directors Should Ask:

  • Have we established and communicated clear expectations about how the CEO should publicly conduct themselves? 
  • What issues of interest to the CEO are also in line with the company’s values and interests? In what circumstances is it appropriate for the CEO or other company spokesperson to take a stance on an issue?
  • What are the risks and upshots of the CEO or the company as a whole taking a stance on a given issue?
  • If the CEO or company is going to take a stance on an issue, are there initiatives or business relationships that might make that messaging seem disingenuous, negating any positive impact from speaking out?
  • What issues might be of most interest to the company’s employees? Are there ways in which the company’s conduct might invite employee backlash?

NACD Resources: The NACD Directorship magazine article “When CEOs Speak Up” explores the board’s role in overseeing politically active CEOs. In addition, “Political Spending Takes Center Stage” focuses on the board’s duty to encourage transparent corporate political spending practices and disclosures. Finally, NACD CEO Peter R. Gleason’s response to BlackRock’s annual letter to CEOs in “Why the New BlackRock Letter Matters for Boards” emphasizes the board’s—not just the CEO’s—responsibility to address climate change at a time when investors and CEOs are increasingly active in speaking out against those who do little to combat it.