The corporate scorpion and the climate frog
Don’t blame companies for the climate crisis – it’s in their nature.
Trust me, I’m a company. Photo by Andrey Tikhonovskiy on Unsplash
A scorpion comes to a riverbank and asks a frog to carry it across on its back. The frog hesitates: “How do I know you won’t sting me?” The scorpion replies, “Why would I? If I sting you, I drown.” Convinced by the logic, the frog agrees. But halfway across, the scorpion stings. As they both begin to sink, the frog gasps, “Why?” The scorpion replies, “I can’t help it. It’s in my nature.”
This parable, bleak as it is, captures a paradox at the heart of today’s climate crisis: why do corporations, even when faced with increasingly apparent existential risk and growing economic incentives to change, still fail so often to respond? Why, despite public commitments and internal concern, do they retreat from climate action when the stakes are highest?
The answer lies in the nature of the corporate scorpion. Businesses, especially publicly traded ones, are bound by a fiduciary duty to maximize shareholder value—now. This short-term imperative often overrides long-term sustainability, even when the latter is clearly in their financial interest. Call it the sting of short-termism.
Oil companies like BP and Shell, for instance, responded in the 2010s to pressure from the public and shareholders by making bold climate pledges. As oil prices rebounded and geopolitical tensions shifted, however, they scaled back those commitments. Similarly, major banks that joined the Net-Zero Banking Alliance when the pressure was on have begun to withdraw or dilute their participation, citing competitive pressures and regulatory uncertainty. More broadly, many companies have made substantial progress taking the relatively easiest measures toward decarbonising their operations. But as they reach more difficult and costly emissions, for example the so-called Scope 3 emissions in their supply chains, or aspects of their operations that don’t have immediately available clean alternatives, their ambitious targets get harder to meet.
These reversals aren’t anomalies; they’re symptoms of a deeper problem. The financialization of business has transformed corporate decision-making into a short-term performance game. Boeing offers a cautionary tale: once revered for its engineering excellence, the company spent years prioritizing stock buybacks and executive bonuses over safety and innovation. The tragic consequences of this shift –claimed to be a contributor to the 737 MAX disasters – underscore how short-term financial logic can erode long-term resilience.
Despite increasingly frequent and severe weather events, climate change remains a relatively long-tail risk. Its most severe impacts, such as rising sea levels and resource scarcity, unfold over decades. Yet the corporate time horizon is measured in months. Even when leadership is personally committed to sustainability, the system it operates in, one where executive compensation is often linked to short term financial metrics, punishes long-term thinking.
This is the scorpion’s nature. It’s not that corporations are malicious or indifferent, as many activists seem to believe. It’s that their design compels them to act in ways that may ultimately be self-destructive. They sting not because they want to drown, but because they’re built to.
This doesn’t mean corporations have no role to play. On the contrary, they are essential actors in the climate transition.
Businesses excel at risk-taking, innovation, collaboration and efficiency: They can deploy capital quickly and experiment with new technologies. From battery breakthroughs to direct air capture, many climate solutions will emerge from corporate labs. With their global scale, larger companies and international supply chains enable international collaboration at speeds that governments usually can’t hope to match. Meanwhile, when the incentives are right, companies can allocate resources with speed and precision.
But to get across the river, we must be clear-eyed about their limitations. That’s where pragmatic public policy comes in. When activists cry “we must change the narrative,” we need to focus on specific objectives. Rather than rail against the nature of scorpions, we should advocate for more ambitious policy in at least three areas: data, infrastructure, and correcting market failures.
Fund public science and data: Climate models, satellite monitoring, and open-access research empower businesses to make informed decisions and innovate responsibly. The US has traditionally provided funding and programmes that the entire world benefits from. In the (hopefully temporary) absence of its leadership, other governments need to step up.
Invest – smartly – in enabling infrastructure: Just as the internet was born from public investment, the clean-energy transition requires grids, charging networks, and resilient systems that =private enterprises can build on. Smart governments will do so in a way that gives these enterprises skin in the game, so that at least a portion of resulting profits come back to the public purse.
Correct market failures: Markets often fail to account for environmental externalities – costs like pollution, ecosystem degradation, and carbon emissions – that aren’t reflected in prices. To correct these failures, governments must implement mechanisms that internalize these hidden costs. Carbon pricing, emissions caps, and robust regulatory standards are essential to ensure that environmental harm carries a financial consequence. This not only levels the playing field for sustainable innovation but also steers private investment toward clean energy and technologies, aligning market behaviour with long-term planetary health.
Public sector action like this doesn’t crowd out private enterprise: it catalyses it. By providing clear information, setting the rules and levelling the playing field, governments can harness the strengths of the corporate sector without relying on it to lead.
The parable of the scorpion and the frog is tragic because it reveals a truth about nature, both biological and institutional. Blaming corporations for the climate crisis, like expecting them to solve it, represents a failure to understand their nature.
Effective climate action requires both corporate dynamism and public direction. Climate communications, therefore, must be similarly holistic: advocating for one without the other will leave us stranded midstream, stung by our own assumptions.