Can Large Companies Lead the Low-Carbon Revolution?

The dismissal of a green advocate at a major energy corporation and other recent developments raise a critical question: Are big companies too invested in the status quo to be trailblazers in the quest to wean the global economy off fossil fuels?

Not long ago, David Crane and David Steiner were among a handful of Fortune 500 CEOs admired by environmentalists.  A climate hawk and the chief executive of NRG Energy, Crane led the company as it invested $1 billion in solar power, wind energy, and electric-car charging.  Steiner, chief executive of Waste Management, was an evangelist for recycling.  “Picking up and disposing of people’s waste is not going to be the way this company survives long term,” Steiner told me back in 2009.  “Our opportunities all arise from the sustainability movement.”

That was then, and this is now:  Crane was abruptly fired last fall just before he was planning to leave for the Paris global climate talks.  (He went anyway.)  “The market was irritated with me over the green strategy,” he says.  Steiner has turned bearish on recycling because of low commodity and energy prices, among other issues. “Momentum has been up, up, up for the last 20 years, and now, it’s stalling — it’s down, down, down,” he said recently.  Waste Management has abandoned or closed 30 recycling facilities, 21 percent of the company’s total, since 2014. 

Crane’s firing, which he has attributed to his green initiatives, and Steiner’s retreat raise important questions about the ability of big companies to manage — let alone lead — the transition to a low-carbon economy that scientists say is required to avert the worst impacts of climate change.  “I think the problem was transformation,” Crane has written.  “We were attempting to transform NRG from brown to green, and from centralized to distributed.  Investors didn’t like it.”

Who, then, will lead the way to a low-carbon future?  Startups like Tesla and Solar City may be best positioned to do so, just as Google, Amazon, and Facebook came out of nowhere to become three of the most valuable companies in the world.  Peter Boyd — who has worked closely with big corporations as the launch director of the nonprofit Carbon War Room and an adviser to the B Team, a network of high-profile CEOs dedicated to fighting climate change — says the culture of startups gives them an edge.

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