The World Summit on
Sustainable Development in September 2002 was an anti-climactic
conclusion to three decades of global environmental activism. Delegates
agreed few new targets for governmental action, save a welcome pledge to
halve the number of people without access to sanitation and safe drinking
water by the year 2015.
What did emerge from Johannesburg was a new debate. Many governments
and some non-governmental organisations (NGOs) argued that voluntary
partnerships between business, governments, and NGOs were the best way to
make concrete progress on sustainable development
Ten years earlier the 1992 Earth Summit in Rio de Janeiro generated a
long list of official commitments and optimism that governments could
protect the environment and reduce poverty. Johannesburg symbolised the
extent to which Globalisation has scrambled the interests and capabilities
of governments, corporations, and activists. Now former antagonists are
drawn to work together in ways that are uncomfortable, controversial, and
yet often highly effective. It is an era of strange bedfellows.
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The New Global Context for Environmental Action
Thirty years of effort to restore and protect the environment has left
a mixed record. While many local environments are on the mend key global
trends are worsening
The Kyoto Protocol, which
will likely enter into force after 2002, will not solve the problem of
global warming. Leaving aside the intransigence of the U.S. (the largest
single source of greenhouse gases) the Protocol does not commit the
developing countries (collectively the world's largest source of future
greenhouse gasses) to reduce emissions.
There are good reasons for omitting developing countries from the Kyoto
mandate. The developed nations are responsible for the current high levels
of greenhouse gases in the atmosphere, and they have greater financial and
technological capabilities to reduce emissions. Ultimately, however, the
solution to climate change and other global environmental problems will
depend on the active participation of the developing world.
Globalisation has proved a two-edged sword for business and the
environment. As the political will and capabilities of governments to
address environmental issues has waned, private capital has become the
main source of foreign investment in many developing countries. The
multinational companies whose investments have helped to create economic
gains and environmental stresses in the developing world now face pressure
to improve their environmental performance. Similarly in the United
States, a trickle of voluntary initiatives has become a flood.
The contrast between Johannesburg and Rio illustrates the extent to
which the institutional context for addressing environmental problems has
changed. Broadly speaking, governments came to Johannesburg with less
interest and fewer resources than they brought to Rio. Business, on the
other hand came ready to do business and enter into partnerships with
environmental organisations and governments.
Some NGOs want government to reassume a strong hand in regulating the
growing influence of global corporations. Others are trying to surf the
new waves; aligning with the corporations who seem more motivated than
governments to take action on environmental issues.
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STRANGE BEDFELLOWS
In one sense, partnerships between corporations and environmental
organisations are not new. Companies have provided charitable grants for
the programs of environmental organisations for decades. The controversy
in Johannesburg surrounded a new type of partnership in which the common
interest of the company and the NGO has grown beyond philanthropy. Now
both organisations seek to solve an environmental problem associated with
the company's core business without waiting for a government mandate.
These partnerships are a significant departure from the ways in which NGOs
and businesses have typically behaved.
The Pioneers: Environmental Defense and McDonald's
Two of the first organisations to break this tradition were
Environmental Defense (formerly known as the Environmental Defense Fund or
EDF) and McDonald's, who launched a landmark partnership in 1990 to reduce
waste in McDonald's restaurants and supply chain. This reduced more
than 150,000 tons of packaging, recycled more than two million tons of
corrugated cardboard, and purchased more than $4 billion worth of products
made from recycled
materials. It has been followed by similar
initiatives to reduce water and energy consumption and a new
partnership with the Center for Environmental Leadership in Business at
Conservation International to promote conservation and sustainable
agricultural practices among suppliers of commodities, such as fish, beef,
potatoes, and oils.
While difficult to prove, it is likely that the
McDonald's-Environmental Defense initiative spurred other companies and
NGOs to partner on voluntary environmental action. EDF in 1994 launched
the Alliance for Environmental Innovation, which has undertaken similar waste-reduction
initiatives. The U.S. Environmental Protection Agency has launched
more than 30 voluntary programs to encourage the private sector to act
above and beyond regulatory
requirements (pdf 139Kb). EPA's Project XL grants companies the
flexibility to test alternative approaches that achieve better
environmental results more efficiently than existing regulatory
requirements. Other EPA
voluntary programs promote pollution prevention, energy efficiency,
water efficiency, waste minimisation, mass transit, watershed
conservation, sustainable agriculture, and more.
Addressing the New Global Agenda
In the 1990s NGOs sought to engage leading companies in combatting two
key issues: global climate change and biodiversity loss. The EU embraced
the 1997 Kyoto Protocol, which called for a five per cent cut in
industrialised nations' greenhouse gas emissions, but other developed
countries, most notably the US, and some developing countries resisted it,
fearing negative impacts on their economies. With governments slow to act,
NGOs turned their sights to the private sector, hoping to demonstrate that
the costs of reducing emissions and protecting biodiversity were lower
than many critics argued.
Global Climate Change
In 1998, as US resistance slowed ratification of the Kyoto Protocol,
the Pew Center on Global Climate Change was established to seek innovative
policy solutions, creating a Business Environmental Leadership Council
to bring the weight of Fortune 500 corporations into the policy debate.
Environmental Defense organised the Partnership
for Climate Action in 2000 with Alcan, BP, Dupont, Entergy, Ontario
Power Generation, Pechiney, Shell International, and Suncor Energy. If
these companies were a country, they would rank 12th in emissions of
greenhouse gases. Dupont made the most ambitious pledge: to reduce
emissions 65 per cent below 1990 levels by 2010. The company had already
achieved a 60 per cent reduction by 2000. BP achieved its goal of reducing
emissions 10 per cent below 1990 levels eight years ahead of schedule in
2002.
World Wildlife Fund and the Center for Energy and Climate Solutions
established the Climate
Savers Program to help corporations develop innovative greenhouse gas
reduction strategies and to gain public recognition for their
accomplishments.
Chicago's Environmental Financial Products, LLC and the Kellogg
Graduate School of Management at Northwestern University are working to
establish the Chicago
Climate Exchange (CCX), the world's first private trading market for
greenhouse gases.
The success of these initial partnerships is spurring other companies
to take voluntary action. In the US, the Business
Roundtable encourages its members to measure their emissions and to
adopt voluntary targets for reducing them.
A national policy of incentives for these types of strategies could
result in substantial emissions reductions at minimal economic cost. Such
a policy should include incentives for commercialisation of low-emission
energy technologies, which will be essential for dramatic emissions
reductions in the future.
To reduce costs to the economy, the policy should also provide
mechanisms for emissions trading and carbon offset investments, both
domestically and internationally, structured to ensure biodiversity
conservation. For example, conservation and restoration of threatened
forests should be encouraged, while conversion of natural habitat to
forest plantations or cropland should be discouraged.
Biodiversity
An even greater number of partnerships have formed to promote
conservation of biodiversity, which is a more urgent problem.
The world faces an extinction crisis unparalleled since the age
of the dinosaurs, brought on by conversion of natural habitats for
human use, pollution of air and water, hunting and fishing of threatened
species, and the introduction of non-native species into natural
habitats. Particularly at risk are the global biodiversity hotspots,
25 regions that harbour nearly half of the world's plant species
and over a third of all vertebrate animal species. A number of key
industries both contribute to biodiversity loss and offer the potential
to deliver conservation solutions. Among these forestry, agriculture,
fisheries, energy development, mining, and tourism are especially
important.
Forestry
The world's forests are home to most of its terrestrial biodiversity
and logging is the most visible threat, although the impact of agriculture
is actually more extensive. As a result of campaigns major retailers such
as Home Depot, Ikea, Lowes Home Improvement Warehouse, and Staples have
pledged to replace wood products from threatened forests with products
from forests certified as sustainably managed.
The first forest certification program, SmartWood,
was established by the Rainforest Alliance in 1989 and the Forest
Stewardship Council (FSC) was launched in 1993 to provide a credible
system for certifying "well managed forests". FSC 's global
principles and criteria address environmental, social, and economic
aspects of forestry. To date, FSC certification has been awarded to 453
forestry operations in 56 countries with a total area of more than 72
million acres. A Global
Forest and Trade Network (GFTN) of more than 700 companies has been
established to promote FSC certification among producers, traders, and
retailers of forest products.
The major forest and paper companies in the United States did not join
the FSC or the GFTN. Instead, the American Forest and Paper Association
(AF&PA) in 1994 established the Sustainable
Forestry Initiative (SFI). More than 113 million acres are enrolled in
the SFI program. In June 2000, the AF&PA organised an independent
Sustainable Forestry Board (SFB) to oversee the SFI's standards and
certification procedures. The chief executives of Conservation
International, The Nature Conservancy, and Resources for the Future sit on
the SFB.
Forest certification programs have improved the environmental
management of hundreds of millions of acres of forest worldwide.
Agriculture
While logging may be the most visible threat to forests, expansion and
destructive farming practices have had an even greater impact on
biodiversity. Each year since 1980, some 35 million acres of the world's
tropical forests have been converted for crop production and livestock
grazing. The doubling of the world's food requirements over the next
several decades will place increasing stress on many of the Earth's
ecosystems.
In 1991, based on the success of its SmartWood program, the Rainforest
Alliance established a Sustainable
Agriculture Network with other conservation NGOs in Latin America to
develop guidelines for responsible management of key export crops. It has
certified over 130,000 acres of farms in Central and South America.
Coffee, the largest legally traded agricultural commodity, has been the
conservation community's strongest focus. The world's key coffee-growing
regions - Brazil, Central America, the Andes, East Africa, and Southeast
Asia - are also some of the world's most threatened hotspots of
biodiversity. Millions of acres of rainforest have been converted to
coffee plantations. Conservation organisations are encouraging coffee
producers to maintain traditional shade coffee farms and to end conversion
of natural forests for new coffee plantations.
In the 1990s, a number of specialty coffee roasters such as
Thanksgiving and Equal Exchange embraced conservation principles. In 1998,
Starbucks signed an agreement with Conservation International to support
small farmer coops in Mexico's El
Triunfo Biosphere Reserve. Starbucks has since worked with CI's Center
for Environmental Leadership in Business to create environmental
and social guidelines (pdf, 143 Kb) for its suppliers.
The Starbucks guidelines were among the first applications of a set of Conservation
Principles for Coffee Production (pdf, 38Kb) developed by a coalition
of environmental organisations, including the Consumers Choice Council,
Conservation International, the Rainforest Alliance, and the Smithsonian
Migratory Bird Center. These organisations are now seeking to engage other
major coffee roasters in similar efforts.
This is part one of a two part series. Part two is available here.
This is an edited version of a paper given to the New America Foundation on 20 November 2002.