An Inconvenient Exposure

Posted: Oct 20, 2007 12:01 AM
An Inconvenient Exposure

Last week, a UK judge ruled that “An Inconvenient Truth” - Al Gore’s Oscar winning documentary – was packed with so many errors and exaggerations that it can only be shown in schools if it is accompanied with guidance notes that will allow teachers to balance Gore’s “one-sided” analysis.

In the ruling, Justice Michael Burton of the High Court in London listed nine specific instances where Gore’s claims were wrong and were presented in “the context of alarmism and exaggeration.”

The ruling was a result of an effort to block the Government’s attempt to include the film in the British school system curriculum.

Assigning a motivation for the distortion, a BBC report concluded Gore made the movie one-sided to deny skeptics any opportunity to challenge the relationship between human activity and global warming.

Even though the political agenda behind “An Inconvenient Truth” is now exposed, it’s hard to estimate the damage caused by Gore’s alarmism. To what degree has public opinion been molded by the film’s shock and awe deception and exaggeration? How many individuals were motivated to take political and social action because of the films false claims of impending doom?

Fear not only sells newspapers and contributes to movie sales but it also affects those in positions of power – especially those who are concerned with public image. Among the most susceptible to these fears are CEOs who don’t want to be held responsible for climatic catastrophe.

This is particularly true for CEOs who are under the corporate social responsibility (CSR) spell. Because CSR requires companies to take responsibility for their environmental footprint – direct and indirect consequences of its business practices beyond legal requirements – global warming policies are a litmus test for a “responsible” company.

Unfortunately for shareholders and advocates of limited government, frightened CEOs make bad business decisions, many of which also contribute to the growth of government. Take for example the consequences of PepsiCo’s global warming strategy.

Under the leadership of Indra K. Nooyi, President and CEO of PepsiCo, the company has gone over the CSR deep end. “Performance with a Purpose” is PepsiCo’s sound bite to describe its role in society. According to Ms. Nooyi, this means, “delivering superior financial performance at the same time we improve the world.”

Playing its part to save the planet from “impending doom”, PepsiCo is leading the charge in promoting global warming fears. Just this year, the company sponsored Al Gore’s Live Earth concerts and it joined the United States Climate Action Partnership (USCAP) – a group of corporations and environmental special interest groups that are “calling for the federal government to enact national legislation to achieve significant reductions in greenhouse gas emissions.”

The problem for PepsiCo is social pressure from global warming fears is harming Aquafina – the nation’s top selling brand of bottled water.

Responding to the populist theme of combating global warming, elected officials are pursuing efforts to reduce the environmental footprint of bottled water.

The mayor of San Francisco justified a ban on the purchase of bottled water by the city government stating, “As the city advances its Local Climate Action Plan to combat global warming, it is paramount that we initiate policies that limit the most significant contributions to climate change.”

The mayor said that the annual use of plastic water bottles by U.S. consumers “required about 47 million gallons of oil, the equivalent of one billion pounds of carbon dioxide that is released into the atmosphere.”

San Francisco is not an isolated case. Salt Lake City Mayor Ross (Rocky) Anderson prompted the U.S. Conference of Mayors to adopt a resolution to promote tap water as a way to limit greenhouse gas emissions.

Special interest groups are also targeting bottled water. Corporate Accountability International recently launched ‘‘Think Outside the Bottle” – a nationwide campaign to discourage bottled water consumption.

Ironically, the Natural Resources Defense Council (NRDC), one of PepsiCo’s “partners” in USCAP, is a leading critic of bottled water. A NRDC water specialist recently said, “No one should be drinking bottled water and thinking they're doing something good for the planet.”

Most disturbingly, Ms. Nooyi is keeping her shareholders in the dark about the impact of global warming regulation on PepsiCo.

For example, in its 10-K filing with the Securities and Exchange Commission (SEC), PepsiCo acknowledges high-energy prices are a business risk but it fails to disclose that global warming regulation will bring about a significant increase in energy prices. PepsiCo also fails to mention that global warming alarmism is a threat to its brands.

Not only is PepsiCo’s global warming strategy hurting its business, it also threatens to undermine the public policy goal of limited government. In addition to harming the economy, a Kyoto Protocol type cap-and-trade regulatory scheme would create a massive growth in government.

Politically, onerous legislation can only pass Congress with lobbying support from business – special interest groups alone don’t have the muscle to get laws passed. By participating in USCAP, PepsiCo is increasing the likelihood of regulation.

Fueled by a distortion of reality we are witnessing the gradual destruction of capitalism at the hands of CEOs, social activists, power hungry politicians and Hollywood. On the 50th anniversary of “Atlas Shrugged”, the real inconvenient truth is watching Ayn Rand’s words become reality.