In order to turn capitalism into a less destructive force, it will be necessary to move the idea of green production into the popular realm.
This article titled “Moving sustainability from the margins to the mainstream” was written by Terry Slavin for the Guardian Professional Network, for guardian.co.uk on Tuesday 20th March 2012 18.01 UTC
It is the biggest question in the battle to set capitalism on a more sustainable course: what will it take for sustainability to leap from vanguard to mainstream?
That was the subject up for debate at February’s Guardian Sustainable Business Quarterly event, chaired by Forum for the Future’s Sally Uren, who ably stepped in at late notice for Jo Confino. Also on the panel were the independent financial advisor and author Simon Zadek, Mikele Brack, director of public sector initiatives at GE, Rupert Howes, chief executive of the Marine Stewardship Council, and David Stubbs, head of sustainability for London 2012 Organising Committee of the Olympic and Paralympic Games (Locog).
Simon Zadek made the sobering assessment that London, which for a brief period led the world on corporate social responsibility and sustainability, no longer rules the waves. “There was a time when London was the glorious centre of sustainability and corporate social responsibility, but frankly, that time has passed,” Zadek said.
“It doesn’t seem to me that Europe and North America will be major drivers of structural change in the global economy in the future. We have to think about how change will emerge in places like China, India, Indonesia, Brazil; understand what the push numbers are there, rather than what the push numbers are here.”
As well as sending more “little boats” of green best practice onto the high seas of global capitalism, he said, efforts should be made to co-opt some of the “big steamers” onto a sustainability agenda. “You don’t ignore the small boats, but you look at the huge [global] trends and figure out how to surf the waves more effectively.”
Over the next five years, China will increase its outward investment by $1tn, roughly equal to entire foreign direct investment into China over the last 30 years, Zadek pointed out.
“There’s a real opportunity, having worked with the Chinese government over the last couple of years on this, to shape the extraterritorial regulations the Chinese government would impose on its own outward investment to push higher social and environmental performance.”
Another example is sovereign wealth funds. State-owned investment banks such as the China Investment Corporation and the Fundo Soberano do Brasil, valued at $4tn globally, are slated to grow in value to $12tn by 2025.
Zadek said sovereign wealth funds in Abu Dhabi, Qatar, China and Brazil are looking at how their investment policies can help shape their “soft power” positions in the world.
“Given that finance is a critical part of the green-growth transition there is a huge opportunity to influence this very large public money in how it blends finance interest on the one side and policy on the other.”
A third area is subsidies to fossil fuel industries, which amount to $1.1tn a year globally. Such subsidies effectively set a “negative carbon price”, Zadek said. If governments could be persuaded to drop these subsidies, it would have a far greater impact than a global deal to cut CO2 emissions.
A fourth area is in the greening of public procurement practices. Zadek said there was a “real appetite to approach it at a global level ahead of Rio+20”, the UN conference on sustainable development in Brazil in June.
David Stubbs, whose organisation has procured over £8bn worth of goods and services to stage this summer’s Olympic and Paralympic games, said one of the main strategies for meeting Locog’s sustainability goals has been through sourcing.
Stubbs pointed out Locog grew from a few dozen people in the bid team seven years ago to an organisation that will employ nearly 200,000 this summer.
“Everything we do we have to buy or rent. We concentrated our efforts on responsible sourcing, low embodied carbon, using recycled content materials, and got it into our tender specifications, so contractors knew about it from the beginning.”
“You have to be very clear about your procurement requirements, and set out what you are looking for.” Hundreds of thousands of companies signed up to the CompeteFor, the London 2012 procurement website, which provided a support network to help smaller companies. “We had an enormous number of small companies involved, up and down the country, not just from London.”
But Zadek was less optimistic about the role of small companies as sustainability is scaled up. “The bad news is that green public procurement will punish small businesses severely and push most of them out of the market,” he said. “Looking back over 20 or 30 years, that’s the danger we should be aware of. As the technological hurdle increases, as the level of excellence and quality conditions increase, it will become more and more difficult for any but the most innovative small businesses to play a green public procurement game.”
European public procurement rules and international trade rules through the World Trade Organisation, which are intended to level the playing field by focusing on value for money, could also serve to prevent green supply chains at a national level by pushing aside qualitative aspects.
“If you are serious about scale, you need to be careful about choosing the sorts of public private partnerships you want to be part of that will shape the rules of the game.”
One such organisation is the Marine Stewardship Council (MSC), the sustainable seafood certification agency, which has managed to sign up 10% of the global fisheries industry over the last 15 years.
Howes said: “When MSC started, people thought it wouldn’t go anywhere. Today it is proof of concept.” It was a difficult gestation and MSC has had a rough ride, he said, but with companies like McDonald’s Europe, and Wal-Mart now demanding MSC-certified fish, fisheries are being opened to meet that demand and this is driving change…”
Asked what it would take MSC to scale up from 10% to 100%, Howes said without a change to the way the world’s oceans are fished, only 15% to 20% of fisheries could meet the MSC’s standards. He said it would be a “project of decades”. “We have a proven model. We need to work more closely with governments. Though the MSC was set up because of a failure of global governance to fight over-fishing, I am increasingly finding that governments are interested in working with the FSC to create sustainable fisheries in their jurisdictions.” Other NGOs were important partners because they could help channel development aid to fisheries. But commitment by seafood businesses to paying a premium, when necessary, for MSC-certified fish is also critical.
Brack at GE said it is widely accepted that companies should be sustainable in an environmental and social sense; “It’s the economic element that still needs to be addressed. There’s probably an economic case for many sustainability initiatives, but it’s not quite as clear as the other cases. That’s what we need to work on the most.”
GE put its money where its mouth is by investing $5bn in 2005-2010 into its widely praised Eco-Imagination programme to ensure its own manufacturing processes and products are sustainable. “Not only do we think producing our products in that way is more economically sustainable for us, we believe there is a market for products that help our customers be more sustainable,” Brack said.
But she added that GE has the capital to invest. “Other public sector organisations may not have the capital. We need to overcome the investment issues for them as well.”