ANPED Groundwork Series No 6:
Green Business Policies. What We Can Do About it?

The following paper has recently been written by the ANPED Working Group on Changing Consumption and Production Patterns and the Netherlands Committee for IUCN. This message contains the introduction and an enumeration of the environmental principles whic h are described. The paper can be obtained at the Netherlands Committee for IUCN for 10 Dfl plus transport costs (cost-price)

GREEN BUSINESS INCENTIVES

INTRODUCTION

Everybody is green today. According to the advertisements, you can help the environment by driving your car, stuffing away pizza's, flying to destinations at the other side of the world and buying more of the same products. In the meantime, the world's he alth is guaranteed by a growing number of initiatives taken by private enterprises themselves, so-called self regulation. These initiatives have resulted in an ever increasing jungle of acronyms, which all guarantee a true commitment to a sustainable deve lopment. Green principles, guidelines, audit schemes, labels or cooperation networks vary greatly in scope, language and representation but they all aim to establish themselves as partners in the road to a sustainable development.

Some of these networks, such as the European Chemical Industry Council (CEFIC), were established immediately after the 1972 UN Conference on the Human Environment in Stockholm, but most of them are more recent. Especially during the preparations for the E arth Summit in Rio (1992), fear of tough environmental regulations boosted the number of environmental statements made by individual corporations, business sector or other networks. Stefan Schmidheiny's Business Council for Sustainable Development which r ecently merged with the World Industry Council for the Environment, became the most famous. A few years after the UNCED, the so-called "green business networks" (GBN) are still highly active. It could well be argued that the initiative in the discussion o n which - environmental - obligations should be imposed on the corporate sector, lies with business itself.

NGOs have found two ways to tackle this issue. A major stream within NGOs has taken the position that green policies or guidelines are, at best, marginal. These initiatives are generally too vague to be monitored and they cannot be enforced due to their n on-binding character. Environmental guidelines have been criticized for being nothing more than window dressing. NGOs also argued that GBN statements are a cunning effort to convince governments to refrain from command and control measures. Only measures of this last type can keep business activities within the limits of a sustainable development. Moreover, "green principles" do not question the levels of investment and activities as such. In the words of an employee of the Billiton owned Trombetas mine i n the Brazilian part of the Amazon, during a visit from the Netherlands Committee for IUCN: "We are willing to discuss every part of the operation process, but we are not going to discuss the existence of the operation itself." This attitude is typical fo r the corporate sector. Their approach does not recognize the fact that the current consumption level is the main environmental problem. We cannot solve the excessive use of natural resources by creating more efficient production methods.

On the other hand, a number of NGOs has in different ways worked with corporate guidelines or agreements to improve, on a voluntary basis, the environmental performance of industry. In the Netherlands, the Panda-symbol of the World Wide Fund for Nature ha s appeared on boxes with washing powder. Some environmental organizations have joined so-called covenants between governments and representatives of the production sector. The joint project in the United States between the quite radical Environmental Defe nse Fund and McDonalds also should be mentioned. Basically, this approach is guided by the `best practices' philosophy. If every company would adhere to the best available environmental practice, environmental problems would be reduced substantially. Furt hermore, promoting best practices stimulates the awareness of environmental issues at the workplace.

An ideal way to tackle this new face of the corporate sector has not yet been found by NGOs. One important factor is that NGOs are usually less knowledgeable about the environmental performance of the company than the employees of the company themselves. Most larger companies have hired environmental specialists with a level of knowledge on the effects of the firm's activities on soil, water and land which is hard to match by NGOs. For a balanced and democratic society, an independent party with a high l evel of knowledge of the impact of industry would be indispensable.

One of the new challenges for NGOs is to claim their position as stakeholders in the societal debate about the regulation of business. Regrettably, this is not a dialogue between equals. Genuine equity demands expert knowledge and financial resources for all parties - exactly what the NGOs often lack. Take for instance the NGO participation in decision making procedures by the International Standardization Organization (ISO) which amongst other tasks defines quality and environmental management standards for the environmental performance of the companies. In principle the NGOs can claim access to the meetings of the technical committees where the most crucial decisions are taken. In reality, the transnational corporations have resources to send their expe rts to these meetings - NGOs do not. Following the agenda as it is currently set by industry itself, therefore, puts NGOs almost inevitably in a disadvantaged position.

So, how should NGOs approach the "green business networks"? Of course, diversity in NGO strategies should be maintained but there is one approach which could have a considerable added value. First of all, we need to bring some clarity in the various green business networks, guidelines or principles which currently exist. They have to be reviewed, not only in order to identify differences, similarities, but also gaps. Rather than to ignore these eco-initiatives categorically, or to support them wholehearte dly, it is better to define exactly what to expect from the private initiatives. Apart from environmental principles developed by corporations, the role of similar initiatives from international organizations such as the UN or the OECD must be defined. So me issues are not included in these guidelines which obviously have to be, such as a commitment to continuous improvement and measurement of progress. On the other hand, some principles which are included are nevertheless questionable. It is, for instance , inappropriate if the corporate sector establishes itself as a policy-making actor in order to guarantee a sustainable development.

Careful reading of the statements and principles which are the basis of green business networks does not only give us opportunity to learn something about business initiatives, it also serves as useful guidance in a better understanding of the translation of the principles of sustainable development to concrete activities on all levels of society.

The following guidelines are being reviewed:

Return to On-line Library