The greening of Goliath

Tom Burke outlines how business needs to change to tackle
the environmental agenda of the new century

One of the more memorable pictures of the last part of the 20th century was of Shell tugboats shooting water cannon at a Greenpeace helicopter attempting to land environmental activists on the deck of their oil storage platform, the Brent Spar. This one striking image from 1996 captured not just the tussle over whether the platform should be disposed of at sea, but the whole protean struggle between corporate Goliaths and environmental Davids to prevent pollution.

There is a comfortable clarity to this picture of the battle for the environment as a mortal combat between the big battalions of business and green raiders – with government as a somewhat bemused referee tilting decisions sometimes to one side, sometimes to the other. But this comfort is illusory. The true picture of the politics of the environment is somewhat more complex.

It is just 30 years since the appointment of the world’s first ever environment minister. Since then, a familiar agenda of issues has become the stock-in-trade of environmental policy: air and water quality, toxic chemicals, wastes and recycling, noise and nuisances, radioactivity. These pollution issues dominated the 20th century debate between government, business and the environmental organizations and led to great battles over acid rain, vehicle emissions, hazardous wastes, sewage disposal and much else.

Politically, these issues were straightforward. With rivers catching fire or deep in foam, and children playing among drums of cyanide waste on uncontrolled dump sites, it was clear to everyone that something needed to be done. Furthermore, it was pretty obvious what should be done – the industrial activities that caused the problems should be prohibited or controlled by government regulations.

Most of this agenda was driven politically by concern over human – and especially children’s – health and the issues were frequently highly emotionally charged. Clear villains and victims guaranteed them a high media profile. Both the political and substantive rewards for action were rapid and often very visible, and there were many more winners than losers.

Initially, business responded badly to the emergence of pollution as a major issue. Its instinct was first to ignore the problems, then to minimize their seriousness, and then to exaggerate the cost of dealing with them. Only reluctantly did it begin to address them systematically, discovering, much to its surprise, that in very many cases cutting pollution also cut costs.

During the last quarter of the century the efforts of business to deal with pollution and waste issues gradually accelerated. Companies saw them as essentially technical issues and linked them to health and safety, often developing integrated management systems to pursue continuous improvement in their environmental performance. By the century’s end, managers in many companies in the developed world – and growing numbers in the developing world – accepted the need to manage the environment effectively as a core competence.

Trust deficit
But the initial reluctance to act cost the corporate world dear, legitimizing the widely held view that business is anti-environmental and creating a growing deficit of trust with the public. This, in turn, has weakened industry’s response to increasing challenges to its licence to operate and to greater difficulty in gaining access to resources and markets. Despite consistent recent improvements in performance, the public everywhere does not trust business with the environment. This will matter even more in the coming century.

As we enter the 21st century a different agenda is coming to dominate the environmental debate – not instead of the familiar one, but in addition to it. Its issues are climate change, biodiversity, soil erosion, fish stocks, forest loss, biotechnology. Water is still on this agenda but now as more of an issue of quantity than quality. These environmental resource issues are both much more serious than the old pollution ones and much more difficult to address.
Companies must learn to treat the environment as a business issue, not just as a technical one

For a start, the need for action is not so obvious. Even though there are now fewer critical challenges to the underlying science of climate change, the major impacts of global warming are not yet unambiguously visible. Fishermen consistently argue that fears for fish stocks are unfounded. And the real significance of the ever faster loss of forests or biodiversity is not immediately apparent to everyone.

It is also much less obvious what should be done: you cannot simply ban people from driving cars or cutting down trees. This limits the scope of what government regulations can do. It is clear that, at least initially, almost anything done will create more losers than winners. The political drive to act is also weaker. Resource issues are far less highly charged than health ones, and much less media friendly. Clear villains and victims are far harder to find. Multinational corporations make convenient scapegoats, but they only exist because we all continue to buy their products. In any case, many of the most destructive uses of resources are by people so poor they have no alternative.

For the business world, the emergence of the sustainable development agenda presents new challenges. As governments adopt policies to address these issues, the impacts on business will affect much more than the cost of getting goods and services into markets. If you set out, as the British Government has done, to break the link between increasing real incomes and rising vehicle use, you will alter the structure of the market for fuels and vehicles. If you decide to de-intensify agriculture in Europe or North America, you will similarly alter the structure of the markets for agricultural chemicals and machinery. Even the early efforts to combat climate change are already having a profound effect on the structure of energy markets.

Key strategy
This will require companies to learn to treat the environment as a business issue, not just as a technical one. Many of the better companies have now developed systems to incorporate the environment into the way they manage their operations day by day. But very few have yet developed methods to incorporate the environment into the development and implementation of their business strategy. The ability to do so will be a key source of strategic competitive advantage for 21st century businesses.

In the 20th century, the business case to society was simply that what it did was legal and profitable. At the time that was adequate, if hardly inspirational. It will not be so for the 21st century. At a minimum, the case will have to be that what it does is legal, profitable, and socially and environmentally responsible. It will be better for a business to have the ability to make a well thought-out case for its contribution to the transition we must all make to sustainable development

Tom Burke is Environmental Policy Advisor to Rio Tinto plc and BP Amoco plc and Visiting Professor at Imperial College, London.

PHOTOGRAPH: Thomas Raupach/Still Pictures

This issue:
Contents | Editorial K. Toepfer | Time to act | A climate of change | Melding heart and head | Looking through green glasses | Multi-local business | World Environment Day 2000 |
At a glance | Competition | The greening of Goliath | Unfair trade | No sleeping after Seattle | Disproportionate effects | Liberal rations | New millennium, new regulation | Secretary-General’s Report | Pachamama: Our Earth, Our Future


Complementary articles in other issues:
Ralf Corsten: Where the buck stops (Tourism) 1999
Claude Fussler: Clean = competitive (Hazardous Wastes) 1999
Mark Moody-Stuart: Picking up the gauntlet (Climate & Action) 1998
Tony Blair: Opportunity, not obstacle (Climate & Action) 1998
John Browne: A new partnership to make a difference (Climate Change) 1997
Margaret G. Kerr: Profits with honour (The Way Ahead) 1997
Maurice F. Strong: Remaking industrial civilization (The Way Ahead) 1997