I wanted to share some thoughts around the recent Gitcoin+Shell controversy. This sparked a nontrivial amount of outrage among many thought leaders within the crypto space, mainly from individuals who were concerned about greenwashing, and about Gitcoin lending their good brand to an evil company.
And at a surface level, the outrage makes sense. Shell has at points in time been the largest oil company in the world, and the activities of the Shell corporation have indisputably been a major contributor to the damage that has been dealt to Earth’s ecosystem.
Furthermore, $500,000 is completely invisible on the Shell balance sheet. In the past year, Shell has made more than $350 billion in revenue and booked more than $80 billion in profits. In the time it took you to read this far into the article, Shell has made more money than they donated to Gitcoin.
At the same time, $500,000 is more money than any of the other oil giants contributed to Gitcoin. Where are the donations from Exxon, Marathon, Chevron, BP, and Valero? And now that they’ve seen Shell’s attempts to greenwash get swatted down, are they likely to even try in the future?
One fact that the climate space struggles with is acknowledging that all large corporations are pure psychopaths. If you successfully take out Shell for its psycopathic behavior, Conoco will rise up to take their place. Or Sinopec, or Equinor, or PetroChina, or Aramco, or Duke Energy, or Enbridge, or Occidental, or Pioneer, or Philips 66, or Suncor, or Imperial Oil, and so on and so on. There are more than 200 oil companies in the world worth over a billion dollars. You can’t guilt trip the oil industry into being a good actor. You can’t guilt trip any large corporation into being a good actor.
The business world is a fundamentally Darwinian place. Every business in the world is vulernable to losing their customers and revenue to another business that has a more attractive product or better economics. Any business that prioritizes ethics over profit has fundamentally less fitness in the marketplace than a business that is intentionally unscrupulous.
At the top of the business world, where corporations are each booking literally a billion dollars in revenue every day, the only path to success is to be psychopathically optimized around growth and profit. Any top corporation that de-empahizes profit in the name of doing the right thing will quickly be outcompeted and cease to a top corporation. We don’t live in a world where all of the top corporations decided to be greedy. We live in a world where the top corporations are at the top because they are greedy. Asking top corporations to not be greedy is like asking a stream to not flow downhill; the physics of our economy simply don’t allow it.
At the same time, something has to change. The psychopathic actions of the world’s largest economic actors are destroying our future. We, somehow, have to get from the world as it exists today to a world where corporations are held accountable for the external damages of their operations. And though we can’t change the physics of greed[1], we can use those physics to our advantage, and make it so that the most profitable action of a corporation is actually to be responsible for their actions.
As far as I can tell, there are really two effective tools available to us for making that happen. The first is legal; if we levy hefty fines and jailtime to punish environmental damage caused by a corporation, corporations will shift their behavior because fines and jailtime both substantially impact profits. The second is reputational; we can make use of media and public relations to shift consumer behavior based on the perceived good or evil actions of a corporation.
Gitcoin doesn’t have any legal authority to levy fines or throw people in jail. Which means the best Gitcoin can do is leverage its own brand and thought leadership to drive consumer behavior.
Big Oil isn’t going to go away. People are going to fill up their cars with gasoline every week regardless of whether Gitcoin accepts money from Shell or not. But if Gitcoin lends its brand to Shell in exchange for $500,000, people may start to prefer Shell over Marathon or BP. And if Marathon and BP notice that they are losing market share because Shell has a climate budget, they may become inclined to carve out a climate budget of their own. We can start a bidding war that turns $500,000 per year into $50,000,000 per month.
The one thing we need to be careful of is net regression. The behvior we want to control is whether consumers prefer Shell over BP when they go to fill up their gasoline cars. What we don’t want is consumers starting to prefer gasoline cars over electric cars on account of Shell’s contributions to Gitcoin. But I don’t think that’s a risk here. Everybody knows that oil is bad, and everybody knows that Shell’s $500,000 contribution is not balancing the scales.
But that $500,000 is giving us a wedge that we can use to drive further change, and it’s a $500,000 gift that we should embrace. The world needs to change, and the proponents of that change need to use every advantage that’s available to them.
