Everyone Talks About Climate Change, No One Does Anything

As the old joke goes, everyone talks about the weather, but no one does anything about it. The same appears to be true about corporations. A new study from consultancy Accenture "surveyed more than 500 business leaders from China, Germany, India, Japan, the United Kingdom and the United States" about climate change. Of those, 45 percent thought that change was "current a major business issue" for their companies. That number jumped to 59 percent when given up to five years for climate change to have an impact on their businesses. However, climate change isn't quite so high on strategic priorities:

Only 5 percent of survey respondents named climate change as their top strategic priority. In no region of the world did that number rise above 8 percent. Just 11 percent of businesses stated that climate change figures as their second or third strategic priority.

Some of the additional findings are interesting. Although two-thirds of the respondents felt a responsibility to manage the impact of climate change, only 42 percent felt "well positioned" to do so. Maybe that has to do with the lack of nuanced understanding of the topic, or it could be the result of concern over shareholder displeasure. And then there are all the other things that executives have to do:

Competing strategic priorities mean that climate change may receive less attention than other business imperatives. Climate change ranked as only the eighth strategic priority for businesses, named by only 16 percent of respondents—lagging behind sales growth (47 percent), cost reduction (46 percent), developing new products and services (45 percent), the war for talent (39 percent), growth in emerging markets (29 percent), innovation (28 percent) and technology (18 percent).

And then there is the triple threat of paying for new technology, trying to get employees and management to act differently, and managing the response to new regulations. In short, companies are highly sympathetic to the problems, but for various reasons cannot or will not make the issue a strategic priority. That suggests calls to let the private sector deal with climate change are effectively the same as suggesting that we all stick our heads in the sand.

Executives Do Favors for Wall Street Analysts, Get Better Ratings

The Finanical Times had a story on Friday about a new study that proved mutual back scratching to be alive and well on Wall Street. Researchers from the University of Texas in Austin and the University of Michigan spoke with 1,800 analysts and hundreds of corporate executives. They then tied back admissions of favors given to nearly two-thirds of all analysts they interviewed.

The study found that by offering analysts favours, ranging from recommending them for a job to agreeing to speak to their clients, executives sharply reduced the chances of a downgrade in the aftermath of poor results or a controversial deal.

More specifically, an analyst who took two favors was 50 percent less likely to downgrade the company's rating after poor results. According to the CFA Institute, yes, this is unethical behavior.

The sad thing? I sent a copy of the story to some colleagues, one of whom used to work in investor relations and the other a former investment banking type. Their take was, "Ho-hum." They had found that corruption was systematic in their experience.

And what happens to the individual investor trying to make intelligent decisions? They have a good chance of effectively underwriting, with their own money, these backroom relationships because they may keep putting money in a poor investment based on biased advice.