On the eco-ethical indifference of business leaders – The example of Glencore

At times, one has to study the newspaper very closely to learn about insightful statements by top business executivesproviding a deeper insightsinto what our economic leaders think about pressing questions in our world than any journalist’s editorial or comment. Often one then stumbles over phrases and statements that at first sound rather harmless and do not even present any direct distortions of the truth, but upon closer inspection have to fear no comparison in their insolence and self-righteousness. Attentive readers were recently able to witness a particularly blatant example of the ethical indifference of a corporate leader. In the businesssection of the daily papers one was able to read about a statement by the CEO of the highly controversial trading and mining company Glencore from the tranquil Baar in the Swiss canton of Zug. At an investor conference, Ivan Glasenberg had commented on the business prospects of his company, which in recent years has by no means been lacking scandals and highly unethical forms of behavior. Allegations of corruption, environmental violations, exploitation of land and population in Third World countries, controversial business in Congo or Venezuela, related investigations by the US Department of Justice and Canadian authorities, lawsuits by shareholders – the list of offenses Glasenberg’scompany sees itself accused of appears unmanageably long. At the same time, Glencore’s business model relies heavily on the promotion and distribution of coal, which is highly controversial due to the global warming this causes. A growing number of investors and asset managers committed to sustainability and environmental awareness thus are no longer investing in Glencore’s stock. But Glasenberg sticks to its course. “I am still in favor of coal,” he says. When told by a journalist about the inglorious context of Glencore’s activities and possible consequences for our climate, he simply answers, “I am not a scientist and I am not talking about climate change.”

One has to reflect on this sentence for a few seconds. For only with a certain time delay, the whole extent of the audacity and cynicism of a manager, which has become a multi-billionairewith his dirty business, becomes clear.At the same time the phrase “I’m not a scientist” has often been often used by politicians, primarily American Republicans, when asked about global warming (or any other scientific subject like the age of the Earth) and what to do about it, thus justifying their skepticism on climate change and excusing their unwillingness to act despite its increasing scientific evidence.

Glencore Glasenberg’s statement reflects on yet another long dirty tradition within Glencore. His predecessor and company founder Marc Rich, who had beenwas accused of massive tax evasion and the trailing of numerous international trade embargoes, among others of forbidden trade with Iran, the apartheid regime in South Africa and Chile under Pinochet, thus facingthe prospect of hundreds of years behind bars (and escaping this penalty only because Switzerland refused to extradite him until his death), had excused his activities again and again with the statement: “I am a businessman, not a politician”. Until the end of his life Rich stressed that it was perfectly alright to do business with corrupt, violent and racist governments.

Glasenberg now implies that climate change is a sole matter of science and nobody but scientists should deal with it. This reflects the complete ethical indifference on his part. At the same time, Glasenberg’s statement is probably the most perfidious way to deny human-induced climate change. Scientists should analyze climate change and express themselves. That is their business. For any economic activities, this plays no role. Good managers, who only want to optimize returns for their shareholders (and often their own), as according to the economics textbooks it is their duty, do not bear any responsibility in this regard.

However, scientists have long since done their job. 99.4% of scientific publications on climate change stand clearly behind the realization that climate change 1. is actually taking place, and 2. is man-made. This view is a) empirically well-validated b) offers a clear and convincing causal explanation, namely: CO₂ causes a greenhouse effect, and c) this is based on a relatively simple and easily comprehensible theory. This does not mean that the relationship between CO₂ emissions and global warming is the ultimate, 100% accurate and exclusive explanation of current climate evolution. Such a claim would run counter to the nature of science, which by its very method must always be open to corrections of its theories. But it is the theory that is most likelyto be correct. What Glasenberg and others need to know is: It is now their turn to act. The attitude that scientists should first check to 100%, before oneconsiders oneself responsible and before that it is completely legitimate to generate profits for oneself at the most likely expense of the general public by externalizing the costs (environmental damage, climate change, etc.)lacks intellectual as well as ethical integrity. It is time for business leaders to realize this, and if they do not or want to do so, they will have to be forced by society to do so.

Ivan Glasenberg’s statement is a typical example of how shamelessly companies externalize costs. Again and again, the economic activities of one person or group of people (and their commercial profits deriving from them) affect others, and possibly even all other people, without the beneficiaries having to bear the costs. Polluting the environment or the harmful emissions of CO₂continues to cost little to nothing for the polluter, with the costs being borne by the general public. This is one of the fundamental problem of our economic system which must be remedied by political measures. To assume that the economy is taking care of this on its own is completely insane, as one can see in the thinking and acting of people like Ivan Glasenberg.