Notes

Recognizing Climate Change as a Moral Issue
Why is climate change a moral issue? A moral issue is any issue whereby one’s actions, when freely performed, may either harm or benefit others or infringe on another’s rights.26 Climate change, and its anthropogenic roots, poses inherent risks to human, animal, and ecological health and well-being. Global warming will affect the right to clean water, access to food, and property rights of millions of individuals who will be forced to migrate as droughts become more common and sea levels rise. Already 22.5 million people are being displaced each year due to sudden-onset weather-related hazards, with close to 175 mil- lion people from developing nations displaced since 2008.27 The continuation of
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business as usual, given our current understanding of the future consequences of climate change inaction, has been described as an “act of extraordinary witting intergenerational injustice.”28 So simply by definition, climate change and busi- nesses’ reaction (or inaction) to it is a moral issue.
We are, of course, not the first to make this argument. In 2007, Al Gore famously wrote that climate change is not a political but rather a moral issue that threatens the very survival of human civilization. A few years later, NASA’s lead- ing climatologist James Hansen also declared that climate change will be the “pre- dominant moral issue of the 21st century.”29 In fact, researchers in a plethora of other disciplines including moral philosophy, environmental and social sciences, law, public policy, moral psychology, neuroscience, and international develop- ment (to name a few) have been arguing that climate change is “fundamentally an ethical issue” for decades.30 Given the obvious harms of climate change in the future to humans and nonhumans alike, the moral principle of “do no harm” is central to many of these arguments. And yet, the moral implications of climate change inaction have not yet seriously been discussed in the business context.
Moral issues can be distinguished from other matters due to a set of specific attributes that heighten one’s sense of fairness and concern and thereby also help trigger decision-making processes that include ethical considerations. Specifically, issues that have a high level of moral intensity will elicit more sophisticated moral reasoning processes (higher levels of cognitive moral development) than issues that have low moral intensity. Moral intensity consists of the following six dimensions:
• Magnitude of consequences: The sum of the harm/benefits of the issue to those affected;
• Social consensus: The degree of social agreement that an issue is good or bad;
• Probability of effect: The probably that the issue will actually take place and
actually harm/benefit those involved;
• Temporal immediacy: The length of time between the present and the conse- quences of the issue;
• Proximity: The feeling of immediacy (both psychical and psychological) to those affected by the issue; and
• Concentration of effect: The strength of the consequences for those involved.31
Moral intensity operates at an intuitive level; it is felt immediately and viscerally upon the presentation of the moral issue itself. That is, one does not necessarily expend a great deal of cognitive effort in rationally assessing the lev- els of moral intensity related to particular issues at the moment they encounter them. Rather, issues with high moral intensity trigger our moral reflexes about what is right and wrong and/or the fairness and distribution of harms and ben- efits, and they generally motivate some sort of action or response to the eliciting event.32 Simply reading about an injustice or seeing a photograph of a suffering

Sleepwalking into Catastrophe: Cognitive Biases and Corporate Climate Change Inertia 81
child or animal heightens the moral intensity of the issue and can trigger feelings of anger, sympathy, or guilt. Because this mechanism is intuitive yet powerful, it is often used by NGOs to gain consumer support to boycott certain companies or products. For example, in a viral media campaign in 2010, Greenpeace success- fully heightened the moral intensity of palm oil production by showing a man eating a bleeding orangutan finger rather than a KitKat to trigger the sensation of disgust and guilt in the chocolate’s consumers and hoping to incite action against deforestation.
When businesses fail to recognize an issue as moral, and rely instead purely on an economic logic, there can be very real financial, legal, and social conse- quences. Business ethics courses and textbooks are filled with examples of prod- uct liability cases such as Ford Pinto’s exploding gas tanks and Toyota’s faulty accelerator pedals, where the company seemingly placed a greater weight on the economic cost/benefit analysis of the issue without much consideration to their moral obligation not to harm. Obviously, the consequences for consumers were severe in terms of loss of life. However, the legal and financial consequences for the companies were also significant including the cost of product recalls, class action suits, fines and damages, as well as changes in legislation to make products even safer. In the case of Toyota, for example, the litigation, warranty, increased marketing, and incentives campaigns to overcome the negative publicity were estimated to cost $5 billion for the fiscal year following its (delayed) recall cam- paign alone.33
In the context of climate change, not recognizing the moral intensity of the issue can also have negative consequences for organizations. For example, given the accusations of the decades-long concealment of data linking fossil fuels and climate change, Exxon is currently facing the prospect of costly lawsuits that many compare with the first trials against tobacco companies. Key players in this industry were eventually found guilty of knowingly concealing the link between cigarette smoking and cancer, clearly a moral infraction, and were charged over $200 billion in court settlements. Similarly, as of July 2016, the economic and legal costs of the Volkswagen emission scandal, which was an ethical breach involving lying, deceit, and the infringement of stakeholder rights, were approach- ing $20 billion. When the environmental and human hazards of industrial sub- stances such as chlorofluorocarbons (CFCs), polychlorinated biphenyls (PCBs), and asbestos are confirmed, a moral calculus that considers human harms and benefits often leads to legal proceedings to curb corporate action. When busi- nesses fail to view their decisions through this ethical lens, it can therefore result in strategic errors with very significant economic and human consequences.
One of the reasons that businesses do not see climate change as a moral issue lies within the cognitive biases that plague traditional decision-making mod- els in organizations. These supposedly “rational” decision-making models usually begin by identifying a problem through some external scanning mechanism, after which a series of alternative courses of action are generated, before some type of weighting criteria is developed in order to select a particular course of action, to

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ultimately make a strategic choice, and take steps to implement the decision.34 However, when strategic decisions pertaining to changes in the external environ- ment, such as climate change, are blindly entrusted to these “rational” decision- making models that favor an economic cost/benefit calculus over intuitive, moral responses, cognitive errors in the form of biases can occur.