"Charming Psychopaths": The New Corporations

In this interview Joel Bakan talks about his update of his famous 2004 book The Corporation and his new film that shows how the modern corporations are co-opting social and environmental causes to serve their own pursuit of shareholder profit at the expense of the public good and environmental sustainability.

The corporation is a legal construct, indeed a legal fiction. It is not something created by God or by Nature, but rather a legally created and enforced set of relations designed to raise capital for industrialism’s large projects. Its main function is to separate the owners of an enterprise from the enterprise itself.

The latter is alchemically transformed into a ‘person’ that can bear legal rights and obligations, and therefore operate in the economy. The owners – shareholders – thus disappear as legally relevant, with the corporate ‘person’ itself (and sometimes its managers and directors) holding legal rights, and being liable when things go wrong.

It follows that shareholders’ only risk is to lose money if their share value declines. They can’t be sued for anything the corporation does. Moreover, to further sweeten the pot for their investing, the law imposes obligations on managers and directors to act only in shareholders’ best – that is, financial – interests.


No countries are doing well in preparing for a sustainable future at present as this website shows. It lists the countries in rank order of how well they are doing and includes a world map to show their locations.

Poland is 122nd and the UK 131st on the list of 163 countries included on the list. Top of the list are: Cuba; Costa Rica; Sri Lanka; Albania and Panama.

The Sustainable Development Index (SDI) measures the ecological efficiency of human development, recognizing that development must be achieved within planetary boundaries. It was created to update the Human Development Index (HDI) for the ecological realities of the Anthropocene.

The SDI starts with each nation’s human development score (life expectancy, education and income) and divides it by their ecological overshoot: the extent to which consumption-based CO2 emissions and material footprint exceed per-capita shares of planetary boundaries. Countries that achieve relatively high human development while remaining within or near planetary boundaries rise to the top.

Aviation and co2 emissions

This comprehensive article reports research on the claims that airlines are lowering CO2 emissions. As with so many claims made by large businesses, these claims do not stand up to scrutiny. Any reductions being made are far smaller than the additional emissions resulting from more air travel. Wealthy populations dominate the proportion of people who fly. The article has graphs to illustrate this as well as to provide rank orders of airlines that are the greatest emitters and also those doing best at cutting emissions .

CO2, CH4, N2O and SF6 emissions compared

This article from The Conversation compares the contribution to global heating of several of the emissions that humans create, including the gas SF6 that leaks from electrical insulation used in all forms of electrical transmission, from both renewable and non renewable sources.

SF₆ is a man-made, colourless, odourless gas and is indeed the strongest greenhouse gas in the Earth’s atmosphere. On a per molecule basis, SF₆ is approximately 23,500 times more effective at trapping heat than CO₂ and lasts in the atmosphere for about 1,300 years. SF₆ is an effective electrical insulator for circuit breakers and switches (collectively known as switchgear) and helps prevent accidents and fires. Switchgear is leaky and inevitably emits some SF₆ to the atmosphere. Renewable energy installations require more switchgear in the electricity grid than fossil fuels, because it takes more solar panels and wind turbines to produce the same electrical output as a single coal power station. So as renewable power generation grows, emissions of SF₆ to the atmosphere should grow too.

The global concentration of atmospheric CO₂ today is about 410 parts per million, whereas the global concentration of SF₆ is only about 10 parts per trillion. In other words, there is 41 million times more CO₂ in the atmosphere than SF₆. But since SF₆ is 23,500 times stronger at trapping heat than CO₂, doesn’t this still mean it’s a bigger problem than CO₂ for the climate? CO₂ is actually a very weak greenhouse gas and is much less efficient at trapping heat compared to other greenhouse gases, such as methane (CH₄) and nitrous oxide (N₂O). The reason why CO₂ has the largest impact on the climate is partly because, like SF₆, it is very long-lived. But mostly, it is because there is so much more CO₂ in the atmosphere than other greenhouse gases (except for water vapour, which is not the main driver of anthropogenic climate change because it is so short-lived).

Using co2

Five ways of using CO2 are proposed in this article from The Conversation. More technological possibilities for sequestering CO2 to contribute to controlling emissions that lead to global heating.


Jeremy Williams’ short blog addresses a common accusation about those who campaign to lower CO2 emissions:

Are all climate protestors hypocrites?by Jeremy Williams

Pick any tabloid article about climate protests, and the word ‘hypocrite’ will appear in the first two or three comments. It’s a staple of online ‘discussion’, radio phone-ins and casual conversations. You know the kind of thing I mean, but here are some examples from below the line on The Sun’s reporting of Extinction Rebellion:

“They’re all hypocrites, they enjoy the comforts and pleasure of modern living yet want to dictate that other people can’t!”
“What makes me laugh that all these people would have caused extra pollution by travelling to London for this!”
“You see these activists popping into McDonalds, drinking from plastic cups, watching TV, owning iPhones, and all the rest. If they started at home, that would be a start! But they won’t because they like their home comforts and technology. Hypocrites!”

This is the familiar riposte to anyone who wants to speak up for something good. Only perfect people will be allowed to speak – and since no perfect person exists, nobody will be allowed to speak. Any kind of moral discussion of climate change is stifled by this knee jerk reaction.Read on through the comment stream, and there will inevitably be someone saying “we’re all hypocrites” in response.

Some of the more high profile supporters of XR said it of themselves in an open letter last year: “Dear journalists who have called us hypocrites. You’re right. We live high carbon lives and the industries that we are part of have huge carbon footprints”.

Though it would be futile to point this out to those throwing the word around, I’m not sure this is actually hypocrisy. Hypocrisy isn’t about being imperfect or morally compromised. It’s about pretence. The Greek origins of the word are in play-acting, wearing a mask. Failing to live up to your own moral standard doesn’t make you a hypocrite. A hypocrite is someone who pretends to have virtues that they don’t. There may be some climate protesters who only pretend to care about the climate, but I’m pretty sure I’ve never met one.

I believe we should all eat less meat and dairy, but if I’m at a barbecue and there are good burgers, I’m having one. That doesn’t make me a hypocrite. If I told everyone I was a vegan and then had the burger when nobody was looking, then I’d be a hypocrite. It’s the pretending that makes it, technically, hypocrisy.I realise this is literally arguing semantics, but it’s worth examining.

So if climate protesters aren’t quite hypocrites, what are we when we fall short? The philosopher Brian Henning addresses this in his book Riders in the Storm: Ethics in an age of climate change. He argues that “those who earnestly pursue but fail to fully achieve their moral ideals are morally finite”. Moral finitude recognises that we live in a real world, with structures that may prevent us from living up to our ideals. We cannot be perfect. It is impossible, and so perfection is the wrong standard to judge by.Instead, it is the intent that matters. It is the pursuit.

That reminds me of an older moral teaching. In his most famous message, the Beatitudes, Jesus said “blessed are those who hunger and thirst for righteousness.” God’s approval isn’t reserved for the blameless and perfect. It’s for those who aspire to do the right thing.

To summarise for our climate change context, we live in a fossil fuel powered economy. We’re embedded in infrastructure, culture, and patterns of behaviour that make us all complicit in environmental destruction. But we’re not content with that. We long for it to be different. We call for change. When we can act meaningfully in our own lives, we do so, knowing that there is always more to do.We are not perfect. We are compromised, and morally finite. But let’s not be too quick to say we’re hypocrites.

Corporate capitalism to the rescue?


Green fortunes will be made as the economy is forced to decarbonise

By Ambrose Evans-Pritchard

14 JANUARY 2020 • 7:44 PM GMT

What issues are currently keeping the world’s economists awake at night? A new Telegraph series reveals just that. Here, Ambrose Evans-Pritchard expounds the rapidly-changing investor sentiment on climate change – and the winners and losers it will create.

Two powerful shocks have hit the fossil industry and its financial ecosystem at the same moment: the more obvious one is Australia’s six million hectare inferno and all it implies for shifting global opinion and future carbon curbs: the other is a watershed court case in The Netherlands that may have equally far-reaching consequences.

Five days before Christmas the Dutch supreme court ruled that the country’s climate targets were not stringent enough. It ordered the government to slash CO2 emissions much more deeply than it had planned – or is capable of doing without radical measures – and to do so by the end of this year.

The Hague is casting about trying to find ways to cut emissions by 25pc from 1990 levels, not 20pc as supposed, though that lesser target was already in doubt. Never before has a complex industrialised economy been forced to decarbonise so drastically.

The activist group Urgenda – victor in the long legal battle – is demanding the closure of three new coal plants built defiantly in 2015-16 for RWE, Engie, and Uniper without carbon capture; as well as Vattenfall’s Hemweg plant in Amsterdam, already facing the chop four years early. Some €3bn (£2.5bn) of sunk costs are exposed.

The decision to sink €3bn into those plants just as the Paris Climate Summit was reaching its historic breakthrough must go down as one of the most myopic acts of financial self-harm in the modern energy age. “They needed their heads examined,” said Mark Lewis, head of sustainability at BNP Paribas Asset Management.

Urgenda has prepared a ‘50 point plan’ of cuts – backed by the Dutch parliament – with some low-hanging fruit: a faster switch to LED lighting; a cut in the 24-hour speed limit to 100 km/h; getting drivers to raise the tire pressure in their cars, therefore reducing fuel use: a day without meat each week.

What is unique about the case is the reliance on human rights law: the UN Convention and the European Convention on Human Rights. This sets a precedent and variants are spreading like wildfire.

A parallel case in Poland aims to shut down PGE’s Belchatow coal plant, a 5 GW lignite monster with emissions to match New Zealand. The Philippines has already ruled that oil majors such as Shell and BP can be pursued for past damages based on rights law.

The dam broke on climate litigation cases in 2019. There are now 1,380 known lawsuits worldwide. “My advice to companies is that you had better have a 2050 net-zero strategy or you risk losing your societal licence to operate,” said Michael Liebreich, founder of Bloomberg New Energy Finance and head of Liebreich Associates.

Litigation risk brings forward a perfect storm for the fossil industry – and not just for them – already on the ropes as the political vice tightens, renewable costs plummet to parity or below, and investors start to discount anything brown. Big Oil’s 6pc dividend is a red flag, not a sign of health. “Nobody wants to be the last one holding a stranded asset so there is a rush for the exits,” said Mr Liebreich.

Markets are neuralgic about long-tail legal liabilities and are quickly becoming the green enforcers. Some $120 trillion of investment funds, pension funds, and wealth under management are formally linked in groups pushing for decarbonisation. Superficial “greenwashing” no longer cuts any ice. Company boards must give chapter and verse.

BNP’s Mr Lewis says investors’ first priority is to protect themselves against “obvious catastrophic risks” as the energy switch accelerates from a slow Waltz to a fast Tarantella, but it does not stop there. His bank has geared its whole €440bn portfolio to a Paris-compliant model, starting with an exclusion of thermal coal starting from January.

We’ll be looking at the carbon intensity of every company across our investable universe, and that includes steel, cement, and manufacturing. The fashion industry is going to get a lot of attention over the next year because it has a horrendous environmental footprint,” he said.

The investor activist network includes Climate Action 100, the UN-backed Principles for Responsible Investment (PRI), and the City-based Institutional Investors Group on Climate Change.

The PRI – a $90 trillion alliance – says societies will act to stop their leaders “sleep-walking” into an unliveable world and therefore that a regulatory sledgehammer is about to come crashing down. This is not in the distant future. It will hit before 2025 and then gather force. “People won’t be allowed to drive a car with an internal combustion engine, and it’s coming a lot earlier than many think,” says Fiona Reynolds, the chief executive.

“The question for investors now is not if governments will act, but when they will do so, and what policies they will use,” said PRI’s latest report. The rapidly tightening deadlines of Ursula von Der Leyen’s Green Deal in Europe must make very uncomfortable reading for Old Fossils and Old Autos.

The group tells its members to brace for “forceful, abrupt, and disorderly” action, all the more ferocious because it comes so late. It expects electric vehicles to sweep the market as soon as life-time costs plunge demonstrably below petrol and diesel, leading to peak global oil demand as soon as 2026-28.

Almost 70pc of the world’s car fleet will be EVs by 2040 (not 15pc as suggested by BP and others). Oil use in road transport will collapse.

Carbon taxes/prices will rise rapidly to levels then asphyxiate high emitters. Thermal coal will go into free fall this decade and be “virtually non-existent” anywhere in the world by 2040. Asia will not come to the rescue as presumed in OPEC models.

The speed of change is staggering. “Three years ago the consensus view was that EVs were an interesting niche that wouldn’t become mainstream for a couple of decades,” said Mr Lewis from BNP Paribas.

“That has completely changed. The European car companies are betting the farm on them. Daimler says they will not invest a single dollar ever again in a new internal combustion engine,” he said.

Equity brokers Redburn have de-rated the entire oil sector, with a double downgrade for ExxonMobil. They are starting to price in “existential risk”, warning that establishment forecasts for crude demand are wildly wrong. They expect global oil use to decline by 2pc a year from 2025 onwards.

It is another universe from that inhabited by BP’s outgoing chief executive, Bob Dudley, who insists that oil, gas, and coal will still make up 73pc of global energy in 2040, almost unchanged from today. That is broadly the view of OPEC and the International Energy Agency. But it cannot be squared with the stated policies of the world’s governments and faces a forensic attack from high quarters.

Mark Carney, the Bank of England’s Governor, says those betting on business-as-usual – implying a 3.7-8 degree world by 2050 – will be in for a rude awakening. A big chunk of their assets will be rendered “worthless”.

“A question for every company, every financial institution, every asset manager, pension fund or insurer: what’s your plan?” he told the BBC last week.

He has flagged potential “losses” above $20 trillion if companies drag their feet, although this should not be confused with economic loss – an entirely different concept.

Carney thinks the green switch can put excess global capital to work and act as a net growth accelerant for the world. But within that framework there will be winners and losers: those ahead of the curve may reap fat rewards: those that stall will undoubtedly be “punished”.

The nexus of investor groups is aligned with the ever-more stringent demands of the G20’s Task Force on Climate-related Financial Disclosures (TCFD) – Carney’s baby. For now TCFD rules are voluntary. Britain aims to go first and make them mandatory by 2022. This is already concentrating the mind.

Tom Greenberg, climate chief for Credit Suisse, says clients are looking at both the raw numbers and at their own reputational exposure. “They worry that some of these industries are running off cash flow and could potentially have no terminal value. And they don’t want to be on the wrong side of history,” he says.

The oil majors support a global carbon tax. They fear a disorderly populist backlash and disruptive taxes, where individual countries take their own action. It is better the devil you know,” he adds.

Elizabeth Warren has called for a US fracking ban in the Democratic primaries, which would in theory shut down 8pc of global oil supply and most of America’s natural gas. The pledge is gesture politics since it would not pass Congress and would trigger an economic crisis if attempted. But a President Warren could ban drilling on federal land.

More plausible is something akin to HR 763, a bipartisan bill backed by the US economic fraternity from Left to Right for a “carbon fee and dividend” scheme that rotates the revenue back to households. The tax rises by $10 (£7.62) a tonne each year until emissions plunge. This would be a torture rack for the old order.

The oil majors know that a Pigovian carbon tax is coming in one form or another and many see it – surprisingly – as self-protection. Companies are pencilling in a rising scale to $40-60. Internal documents show that ConocoPhillips, for example, now requires that all future projects must be viable at a carbon tax of $40 as soon as 2024.

Big Oil’s main thrust is to crack down on emissions and methane leaks from their own operations (scope 1) and from their power supply (scope 2). What happens to their oil once it goes to consumers (scope 3) is a responsibility shared with the whole of society.

Investors want to know how we are going to be viable in a low-carbon world. They want an inventory of all greenhouse emissions,” says Michael Rubio, climate chief for Chevron. His company is switching to solar and wind for its operations in the Texas Permian Basin.

In August it opened the world’s largest carbon capture and storage facility, a $2.5bn plant in Australia’s Gorgon gas field. The CO2 is pumped into a rock formation 2km below ground. This cuts emissions from Chevron’s liquefied natural gas (LNG) operations by 40pc. The company has teamed up with Bill Gates to snatch CO2 out of the air in “direct carbon capture” for use in synthetic fuels.

Shell and Repsol are going radical with plans for net-zero by 2050, including scope 3. They will have to offset all the emissions of the actual oil and gas they sell. Global reforestation is one potential route.

These companies are going a long way to inoculate themselves against opprobrium as climate science tightens and Greta Thunberg captures the Zeitgeist, but how far can such steps shield their business models? A tidal wave of rival technologies is smashing into them whatever else happens.

BNEF estimates that new wind and solar are already cheaper today than new coal for two-thirds of the world’s population. The records for both have reached $17 per megawatt/hour, with $10 in sight by 2030. This is tantamount to free renewable power. Digging up coal – or indeed producing LNG for oceanic shipment – may become a cost absurdity.

The final tipping point arrives when “dispatchable” renewables (combined with quick storage back-up) undercut even the marginal cost of running natural gas plants. Carbon Tracker expects that to be fully achieved worldwide by the mid-2030s. That sets off the culminating cascade.

Attention is already shifting to whether – or how soon – green hydrogen from electrolysis will be cheap enough to start displacing fossil fuels in steel and cement (13pc of CO2), shipping and trucking, heating for buildings, and – up to a point – in chemicals and fertilisers. Decarbonisation then hits another great chunk of human activity.

Kingsmill Bond, a former Deutsche Bank strategist now at Carbon Tracker, says paper losses will be eye-watering for those who linger on the losing side, and they do not have long to wait. “We are near the beginning of write-downs on a huge scale. What people are talking about now is just the tip of the iceberg,” he says.

“The fossil sector is the biggest system in the world. There is $25 trillion of stuff above ground in pipelines, wells, refineries, or power plants that will have to be written off if we are going to get anywhere near Paris,” he says.

The technology is no longer a futuristic hope. It is already at hand. Carbon Tracker’s assumption is that market forces will sweep away the incumbents because they can no longer compete, much as canals gave way to railroads, or fixed telecoms to digital.

Brown fortunes will be lost. Bigger green fortunes will be made. It is the time-honoured brutality of technological disruption.