In February, Bank of America offered its employees a notable perk: If they had worked at the bank for at least three years, and made less than $250,000, then it would give them $4,000 to buy a new electric car. (Employees interested in merely leasing an EV could claim $2,000.) The move, attached to a company-wide round of salary increases, wasn’t the first time that the bank had made the offer; it had made a similar one in 2015, and again in 2020, although those incentives had also applied to gas-electric hybrids.
Bank of America’s move isn’t going to make a major dent in climate change, but it’s also far from the worst piece of corporate climate action I’ve ever heard of. Many corporate actions to reduce global warming don’t actually help the climate—and if they involve carbon offsets, they can actually add carbon to the atmosphere. But about 15 percent of U.S. carbon pollution comes from cars and light-duty trucks, although gasoline use, and thus carbon emissions, is disproportionately concentrated among a small group of consumers who drive larger vehicles and live in rural areas (which likely doesn’t include many bank tellers or financial analysts). You’ve heard the spiel by now: Electric vehicles are cheaper to run and own than gas-burning cars in many states—but that’s provided that buyers can stomach the larger down payment. An employer-provided subsidy helps get there.
Companies pursue climate action for a number of reasons, but Bank of America’s announcement helped clarify one of the least-discussed aspects of corporate climate action: It is a job perk. When companies try to look like they’re decarbonizing—or more broadly, doing right by the climate—it isn’t only out of their fealty to anxious asset managers. In many instances, it’s also because they want to retain their employees—and their largely left-of-center employees, in turn, want to feel like they’re working at a virtuous place.
Bank of America’s offer makes this fact unusually prominent ($4,000 handouts make for good headlines), but you can see the same idea in some of the tech giants that first pursued aggressive climate action in the 2010s. When Google went “carbon neutral” in 2007, it was already sitting on a massive river of cash. It has since begun to power all of its data centers with renewable energy, slashing emissions. Apple and Microsoft have done the same. Some tech companies now aspire to go carbon negative; Frontier, an initiative housed inside the payments company Stripe, is paying early-stage to remove carbon from the atmosphere so as to help that carbon-sucking technology along. But these firms have (and had) something in common: They are competing in some of the country’s tightest labor markets, demanding highly technical talent from a relatively small pool of qualified workers. These disproportionately young, urban, and highly educated engineers and programmers skew to the left as their demographics would suggest, and so the bulk of tech workers are eager to see climate action.
Nor has the recent movement been limited to tech companies. McKinsey sponsored Frontier, and dozens of Fortune 500 companies, including McDonald’s and United, have made some kind of net-zero pledge. This has been understood as corporate do-gooderism, but it’s also a type of employee perk. In part, that’s because education has become an even stronger predictor of one’s political beliefs in recent years, aligning some segments of corporate America and its workforce more closely with the left. At the same time, the need for companies to follow their employees’ wishes might be particularly acute right now, with labor markets across the United States so tight. In other ways, too, firms are taking actions that straddle the line between political statement and job benefit: Many companies have already committed to paying for their employees to travel out of state to receive an abortion.
Yet even if labor markets slacken as surging oil prices and rising interest rates put added stress on the economy, competition in the tightest markets—for young, urban, highly educated, and (therefore) progressive talent—will remain. And those workers will continue to vote with their feet. In a way, corporate climate action at high-tech firms mirrors plummeting enrollment in petroleum-engineering programs: Young people have less interest than ever in despoiling the climate for their day job.
Still, it’s worth attaching a few asterisks to this idea. First, just because corporate climate action appeals to employees doesn’t mean that it can’t be dishonest or insufficient. Many progressives (and a good number of conservatives) tend to cast aside corporate climate action as nothing more than “greenwashing.” I’m not saying that greenwashing doesn’t exist; rather, employees, not consumers, are the prime audience for greenwashing.
I’m also not saying that the desire to look good is the only factor driving corporate climate action right now. High energy prices are clearly giving firms further incentive to look into decarbonization right now. With gasoline at about $5 a gallon in the United States (and significantly higher in Europe), companies have a further reason to investigate electrifying their vehicle fleet or buying clean power.
That’s one reason I’m skeptical that Republicans will be able to stop these efforts. As Florida Governor Ron DeSantis’s assault on Disney has shown, Republicans are now trying to make companies act less “woke.” Some of their suggested policies flow from a belief that executives and middle managers, sometimes empowered by the people in charge of large asset managers such as BlackRock, are acting outside of actual investors’ interests. But if corporate climate action is partially an epiphenomenon of the labor market, then even a widespread conservative regime is unlikely to fully undermine it.
Last year, I wrote about the “green vortex,” the set of economic, technological, and financial forces that drove a virtuous cycle of decarbonization with only minor government intervention. It’s time to think of labor pressure—and the more generic employee desire for a “good employer”—as one of those key forces.