We still don’t know which businesses are the real environmental game changers
This post is by Julie Hill, former Green Alliance director (1992-97), Green Alliance associate and chair of the resources organisation WRAP.
One of the early projects I led for Green Alliance, in 1990, was the book Ethics, environment and the company. Commissioned by the Institute for Business Ethics, it was written to provide a checklist of the practices that might be discerned in a company serious about its environmental performance. At a time when the environment was barely on businesses leaders’ radar, the most significant measures concerned awareness and process. So the recommendations included conducting “a comprehensive assessment of environmental impacts”, setting targets, ensuring management commitment through a designated board member, and regular auditing and reporting. The hope was that widespread adoption of these processes would bring about a sea change in environmental performance.
Has that happened? While it could be argued that both public and political concern are at an all time high, and corporate branding reflects this concern in many ways, it is surprisingly hard to assess how far the business community as a whole, whether in the UK or internationally, has risen to the challenges.
It’s still hard to assess how companies are doing on the environment
We have pockets of enlightenment. The Carbon Disclosure Project provides lists of ‘A rated’ companies, not just for their performance on carbon, but on forests and water. In England, the Environment Agency gives star ratings to potentially polluting companies, and the loss of a star is a big deal. WRAP’s voluntary agreements have hard environmental impact reduction targets that are reported on, warts and all. Many companies report on environmental indicators on an individual basis (the Global Reporting Initiative has a database of some 55,000 corporate sustainability reports), but making comparisons is hard graft for an NGO or citizen who must comb through the reports and come up with league tables.
Most of the indicators and reporting we do have are aimed at showing incremental reductions in emissions or the consumption of resources. While this is helpful, we know it is not enough. Global ecological indicators have shown drastic decline since 1990, with rising carbon emissions, species extinctions, deforestation, soil erosion, drought vulnerability and nutrient loading. The slow repair of the hole in the ozone layer is one of the exceptions. We need game changers, and we need them now. New business models are needed that explicitly aim to gain value from renewable energy in its many forms, minimal resource use, repairing the damage already done and creating social as well as economic and environmental capital.
Looking back over my time with Green Alliance, which accounts for more than 30 of its 40 years, I do have successes to celebrate in terms of my influence on businesses. Working with agrochemical companies was controversial with some of my peers, but, somewhat contrary to expectations, it did succeed in bringing the main industry body into a successful coalition to lobby for tightened pesticide legislation, A bit later, I attracted criticism for being in dialogue with companies experimenting with genetic modification, but the exposure of those company personnel to the citizen representatives in the debate helped to adapt their objectives to try to meet public concerns. Aspirations for the role of GM crops changed as a result. Working with waste companies, previously not highly regarded as a sector, resulted in some clear ‘thought leadership’ from leading players on the themes of consumption, resource efficiency and circular economy.
Some companies have politely spun us a line
But alongside productive relationships, I also know that, in some cases, I have been politely but persistently spun a line. Commitment and enthusiasm from the many wonderful business people I’ve dealt with can yield a certain level of change, but does not necessarily translate into crucial changes to a company’s business model.
So how to tell if a business is on a game changing path? This is a dilemma many of us wrestle with, not just in deciding whether to work directly with companies, as Green Alliance, WRAP and many other organisations do routinely, but in the increasingly fraught debate about where to deploy capital. As we all know, money changes everything. If a business suffers capital flight, it will take notice. The climate change divestment movement has certainly attracted attention, but will it change the investment climate irreversibly? Removing coal from pension fund portfolios looks like a no brainer, but will it spell its demise, and will that money flow instead to clean technologies? And, for oil and gas companies, how to tell which ones are genuinely diversifying towards renewables and see them as their future, or which are merely dabbling with a view to deflecting criticism? Close to home, we are preoccupied with plastics, but if oil is not used for power, will it simply result in a bigger plastics industry, and will that industry be more circular and sustainable?
How do we find out who the game changers are?
These are questions that can only be answered by exercising a huge amount of due diligence: combing through reports, questioning company boards and interpreting long term commitments. The current fossil fuel divestment movement researches the portfolios of big institutions such as churches, universities and local authority pension funds, and then exercises judgment as to whether taking those millions away or trying to influence companies from the inside is the best strategy. This is time and patience available to few actors. At a personal level, there is shockingly little to guide us on how we deploy our money, whether that is in banks, pension funds or insurance, in ways that are assuredly good rather than a bit less bad.
Developing an index of game changing corporates would be a challenging task, fraught with all kinds of subjective judgments, but at least the process of inquiry might put a few of the more cynical actors on their mettle, and help to create critical mass around what might otherwise be outlying ideas. I am only too aware that the best intentions and initiatives can be thwarted by the ‘permafrost’ of a management layer that regards business as usual as just fine, as one of Green Alliance’s business allies once described to me.
After so many years of active engagement with the corporate sector, business as usual really is no longer good enough.
This post is part of Green Alliance’s 40th anniversary blog series.