Big Business Steps Up to Bat

By Kaitlin Mckenzie

One of the biggest disappointments of non governmental organisations at the World Summit is that calls for stricter regulation of multinational corporations have not been formalised. It also appears to be one of the biggest triumphs of big business.

Multinationals say they want to be a part of sustainable development – they just don’t want to be hounded into participating. Timetables on introducing sustainability into their operations are anathema to them.

“There has been welcome recognition of the need to regulate international business, but no timetable or tangible commitment to a new agreement," says director of the World Development Movement, Barry Coates.

Business has preferred a voluntary approach instead, setting up a Global Reporting initiative as a guideline for companies to report on environmental and social issues.

This is comprehensive, but unlikely to be implemented on a large scale any time soon, since it will probably be costly and time-consuming.

'Walking the Talk,' a book launched by the Business Council for Sustainable Development (BCSD) to showcase its improvements since Rio, says the prices of goods ought to reflect all the costs -- financial, environmental and social -- involved in making, using and disposing of, or recycling them.

Many companies will probably view these as lofty ideals, but the business community is optimistic that it will eventually become normal practice. NGOs though, are calling for a time-frame for implementation.

At the summit, much of business' focus has been on the "business case for sustainable development", showing companies that proper waste management systems and healthy relationships with neighbours can boost profits.

"It is saying that the cost of an environmental impact assessment today is an insurance policy for tomorrow," says head of the World Conservation Union Achiem Steiner. "But it should not just be a question of whether a partnership will be profitable."

Though they showcased what they have achieved in the years since Rio, business still has to do a lot to clean up its act. A project initiated by the United Nations Environment Programme to gauge the private sector’s progress toward sustainable development, in line with Agenda 21, showed most of the improvements have been offset.

"The reports found a growing gap between the efforts of business and industry to reduce their impact on the environment and the worsening state of the planet," says Jacqueline Aloisi de Larderel, UNEP's assistant executive director. "This gap is due to the fact that in most industry only a small number of companies are actively integrating social and environmental factors into business decisions."

She says improvements are being overtaken by economic growth and increasing consumption of goods and services, which rely on natural resources and systems.

"Since Rio, more than 2000 companies have issued reports on their ecological footprint, but corporate sustainability reporting is still a minority practice in most industries and countries, particularly where legal frameworks or public pressure is weak," says Aloisi de Larderel.

But business has had a major shift in attitude since the Earth Summit in 1992, where it was involved mainly to protect its own interests. Its priority during the early stages of sustainable development was mostly green issues. It is now focusing on social issues too, perhaps as a reaction to scandals during the 1990s with charges of child labour, union bashing and insensitivity to minority rights.

When polls started to show that consumers were becoming as concerned about companies' worker-rights records as their record on environment and animal welfare, companies took action. Consumer driven pressure has also led to calls for more corporate transparency.

Business' willingness to co-operate with other players on key issues bodes well for future openness, critics say. At a meeting with Greenpeace and the BCSD calling for governments to ratify the Kyoto Protocol, business encouraged environmental groups to keep a close eye on their operations.

But it is still against formal regulation.

"One of our biggest concerns is over-regulation," says chairman of Business Action for Sustainable Development, Mark Moody Stuart.

The Type 2 partnerships being encouraged here in Johannesburg are an excuse for corporations and governments not to formalise their development commitments, because there is no multi-lateral agreement at international level, say NGOs.

BCSD has helped set up partnerships with companies from the forest, mining and cement industries with NGOs.

Vice president of the World Bank, Ian Johnson says the summit is an imperfect start to achieve sustainable development, but initiatives set up at Johannesburg will gather momentum after the summit.

Ultimately, consumers and civil society will be the real judges of big business' efforts post-summit.