Trust me, I'm a corporation: Can business drive green growth?

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SPECIAL REPORT / Nearly six months after the Rio+20 global environment summit, the jury is still out on whether greener growth can truly happen. In the absence of major commitments by participating countries, EU officials were left placing their hopes on voluntary agreements by industry sectors, including plastics and PVC. But can those deliver?

In the months leading to the UN Conference on Sustainable Development in Rio de Janeiro, EU officials were promising to fight for binding commitments on green growth, resource conservation and global environmental governance despite the economic slump in most advanced countries.

"We cannot wait until the economic crisis is over before we tackle the resources, environmental and climate crises,” Connie Hedegaard, the climate action commissioner, said.

Little of that happened and nearly six months later, the jury is still out on how whether the conference will lead to change in the absence of major commitments.

“Although many expected and wanted more from Rio, including myself, we did achieve some notable advances,” Janez Potočnik, the EU environment commissioner, said recently.

Business groups and multinational corporations contend there were notable advances at Rio, including voluntary action for an economic re-boot towards more sustainable production, consumption and purchasing.

Linda J. Fisher, vice president and chief sustainability officer at the US chemical company DuPont, recently said that “sustainability has become a market-driven business priority throughout our value chains.”

Since Rio, the multinational chemicals, food and energy companies have added an energy conservation initiative to its other sustainability targets, Fisher said in a statement marking the company’s 20th year of corporate reporting on sustainability.

Dozens of corporations pledged in Brazil to become more planet-friendly and transparent in their reporting on sustainability measures.

For example, Europe’s vinyl industry, for its part, agreed to a replace lead additives, cut energy use and boost the recycling of polyvinyl chloride plastics (PVC) that are commonly used in urban water pipes as well as household plumbing, windows and doors.

Still others, like DuPont, bulked up targets they had already set.

‘It’s not 1992 any more’

Some corporations and businesses groups – primarily from Europe – pressed for more action at Rio. The World Business Council on Sustainable Development and its Rio partner Business Action for Sustainable Development also called for government leaders to set global development targets in part to level the regulatory playing field between companies in advanced and emerging countries.

The World Economic Forum – representing 1,000 of the worlds biggest companies – urged government leaders to develop “ambitious, universal and equitable goals for sustainable development” and to vest more in public-private solutions to development and ecological challenges.

Dominic Waughray, senior director of environmental initiatives at the World Economic Forum, acknowledged that Rio 2012 was not like Rio 1992, when in the spirit of post-Cold War internationalism the conference declaration, or Agenda 21, outlined plans for eradicating poverty and improving the environment.

But Waughray says this year’s outcome was not necessarily a setback. The world is no longer dominated by the victors of the Cold War, with emerging countries – including host Brazil – playing a lead role at last June’s conference in defending their own interests.

“Rather than the usual perspective that Rio was somehow a failure, or didn’t work or was a disappointment, I think that most people were not surprised that it was difficult for the intergovernmental process to come up with a coherent new agenda for sustainability given the multiple governmental demands now in the international space,” Waughray told EurActiv. “It’s not 1992 any more.”

Another change was the role civil society and businesses played in shaping the outcome document, 'The Future we Want', and in launching voluntary action.

In the past, that level of involvement was unknown – reserved for government negotiators, Waughray said. “You weren’t necessarily part of the DNA of the solution set … Here we saw that kind of tilt and a dawning realisation of the multidimensional world that we live in and that these types of partnerships can really get things done.”

Absent from Rio: Government action

Yet some campaign groups that had hoped for much more out of the Rio conference say that corporate initiatives and voluntary actions can never replace government oversight and regulation.

Olivier Hoedeman, campaign coordinator for the Corporate Europe Observatory, sees a growing shift to voluntary commitments in environmental matters, “and that means there is an essential factor that’s being left out – and that’s simply that of government action.”

“It’s a standard industry strategy to propose voluntary agreements to avoid regulation,” Hoedeman told EurActiv. “We’ve seen in with cars and CO2 emissions in the EU, where the Commission in the ‘90s agreed to a voluntary plan of action by the car industry and then later had to conclude that it was not delivering and something else was needed.

“In the meantime you’ve lost five to 10 years and that’s the general problem if there is a non-realistic set of expectations.”

Waughray of the World Economic Forum, however, says the Rio partnerships were not just corporations but involved civil organisations and environmental groups. He also says they put pressure on government leaders to be more ambitious than they were at the Rio gathering, which prominent leaders like Barack Obama, Angela Merkel and David Cameron skipped altogether.

“The desire and demand from leading corporations to suggest that we need these sorts of things is hugely important because it creates a sense of urgency and crispness for the decision-makers,” he said.

The next couple of years, with the poverty-fighting Millennium Development Goals due to expire in 2015, offer an important time for work on developing targets, Waughray said.

“If we have this conservation in 2015 and you asked the same questions,” Waughray said, “I would say that yes I would be disappointed if we hadn’t managed to craft something by then.”

Positions: 

Janez Potočnik, who called for sweeping global commitments on resource conservation and stronger global environmental governance, said in a recent speech in Brussels that “although many expected and wanted more from Rio, including myself, we did achieve some notable advances.”

“The most important advance remains a broad buy-in of the concept of green economy, with the recognition that our natural resource base underpins the economic and social development of the globe,” the EU environment commissioner said. “This has opened the door to stronger global commitment on key issues such as land and soil, but also on water, oceans, biodiversity, ecosystems, forests.”

Olivier Hoedeman, campaign coordinator for the Corporate Europe Observatory, said: “Of course it’s hard to be against a voluntary initiative – that in itself can be very good. But it happens in a context where UN agencies and also governments are pointing to those voluntary agreements as a key part of the solution to the sustainability problems of the world, and I think that’s really a fundamental problem. If you would have a strong agenda of binding intergovernmental agreements and UN agencies with sufficient powers and budgets to have their own very pro-active set of policies, and then combined with some voluntary initiatives, then the context would be quite different.”

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