“Rather Than Follow Change, Business Must Lead this Transformation”: Global business’s institutional project to privatize global environmental governance, 1990–2010
Abstract
One of the striking things about the current sustainable development agenda is the extent to which it is being shaped by business. Take eco-efficiency. This was not even on the agenda until 1992, when it was first coined and promoted by the WBCSD. Now, not only is it spreading through industry as a core management philosophy, it has also been embraced by many governments, the OECD and others as a key policy tool.(Björn Stigson, WBCSD President, July 1999)
We are sleepwalking toward a climate catastrophe.(The Union of Concerned Scientists, November 2019)
Introduction
Historical Background: The Rise of Private, Market-Based Environmental Governance
Transnational Business Associations as Class Forming and Mobilizing Mechanisms
An institutional work framework for the study of business classes
Research Design
Data collection
Data analysis
Institutional work forms (First-order categories) | The three main efforts (clustered categories) | General function of the effort |
---|---|---|
1. Creating guidelines | Knowledge production | To provide professional prescription and legitimacy to the PMG logic. |
2. Theorizing | ||
3. Ideologizing | ||
4. Lobbying | Advocacy and institution building | To garner support from and facilitate partnership with governments, IGOs, NGOs, and other organizations on PMG institution building. |
5. Agenda-setting | ||
6. Partnering | ||
7. Catalyzing stakeholder initiatives | ||
8. Communication activities | ||
9. Disseminating | Global diffusion stimulation | To diffuse self-regulatory environmental practices (i.e., corporate environmentalism) throughout global corporate capitalism, thus enacting the PMG logic. |
10. Educating | ||
11. Showcasing best practice | ||
12. Creating an outer global network |
Forming a Transnational Inner Circle to Work on Sustainability
The Institutional Logic Promoted
Principle | Representative quotations from 1992, 2002, 2010* | The rival state-based logic** |
---|---|---|
Business-led change | 1992: “we can resist as long as possible, or we can join those shaping the future” (p. 13); “It is time for businesses to take the lead, because the control of change by business is less painful, more efficient, and cheaper” (p. 83) | State-led change “Industrialized countries should adopt domestic measures to limit climate change by adapting their own economies in line with future agreements to limit emissions” (p. 117) |
2002: “we in the WBCSD are a group of business people who feel we have a duty to speak frankly about the need to build a better global market. . . largely ‘free’ of entangling rules” (p. 41); business “decided to take a keen interest in what was to transpire at Rio and to make sure that it was business-friendly”; “business leaders may have an experimental understanding of sustainable development that governments and citizens’ groups lack” (p.15); | ||
2010: “Rather than follow change, business must lead this transformation”; “Vision 2050 seeks to provide a common understanding so leaders can make the decisions that deliver the best outcomes possible for human development over the next four decades” (p. iii) | ||
Unlimited growth | 1992: “Proving that [“clean, equitable economic growth”] is possible is certainly the greatest test for business and industry, which must devise strategies to maximize added value while minimizing resource and energy use” (p. 9) 2002: “In fact—and this upsets some environmentalists—eco-efficiency sets no limits to growth and no inherent restrictions on industry” (p. 87) |
Sustainable growth “It is imperative that the right balance between economic and environmental objectives be struck” (p. 117) |
2010: “In 2050, economic growth is decoupled from environmental and material consumption and re-coupled to sustainable economic development and meeting needs. (p. 18) | ||
Commercialized environmental protection | 1992: creating “a system of open, competitive markets in which prices are made to reflect the costs of environmental as well as other resources” (p.14) | Top-down environmental protection “environmental objectives can be achieved either through regulations requiring the use of a specific technology or attainment of specified goals, or economic instruments such as emissions fees, subsidies, tradeable permits or sanctions” (p. 139) |
2002: “the most effective way to achieve sustainable development is through the market” (p. 41). “Sustainable development is best achieved through open, competitive, rightly framed, international markets that honor legitimate competitive advantage” (p. 40) | ||
2010: society should “shift from thinking of climate change and resource constraints as environmental problems to economic ones” (p. iiii); “Prices [should] reflect all externalities: costs and benefits” (p. 18); “Markets reward | ||
2010: society should “shift from thinking of climate change and resource constraints as environmental problems to economic ones” (p. iiii); “Prices [should] reflect all externalities: costs and benefits” (p. 18); “Markets reward positive actions and penalize negative ones, such as pollution” (p. 19). | ||
For-profit action | 1992: Eco-efficiency is achieved “by profound changes in the goals and assumptions that drive corporate activities and change in the daily practices and tools used to reach them” (p. 10) | Extra-market action Nations to pursue “fundamental changes in attitudinal and social factors (e.g., preferences for smaller and higher efficiency vehicles)” (p. 131) |
2002: Companies move “from seeing only costs and difficulties in the concept of sustainable development to seeing savings and opportunities” (p. 26); “The business case for sustainable development” (p.12) | ||
2010: The transformation ahead represents vast opportunities in a broad range of business segments as the global challenges of growth, urbanization, scarcity and environmental change become the key strategic drivers for business in the coming decade (p. ii); sustainable development is “opportunistic business strategy at its best” (p. iiii). | ||
Market-based governance | 1992: “economic actors need the right signals to steer them toward the new objective. The nature of such signals should be as compatible as possible with the nature of the market system” (p. 32) | Public policy Nations to deploy “policy instruments, which may include public information, standards, taxes and incentives, tradeable permits, and environmental impact assessments, which will induce sustainable energy choices by producers and consumers” (p. 131) |
2002: governments should constitute “right frameworks to sustainability through the market,” which “ensure that environmental values were efficiently and cost-effectively integrated into the market” but “without cluttering the market with rules and regulations that hamper efficiency” (p. 61); “Voluntary initiatives should be preferred, since these often provide the most flexible and, ultimately, overall most cost-effective way to achieve a desired result” (p. 63) | ||
2010: Governance “enables and guides markets by clarifying limits and establishing frameworks that promote transparency, inclusiveness, internalized externalities, and other characteristics of sustainability” (p. 6) |
The Institutional Project: Class-Wide Resource Mobilization and Three Work Efforts
1. The knowledge production effort
we first have to be clear about the policies we are advocating. Achieving that clarity of vision and purpose involves strategic thinking, thorough research, and careful consultation. . . Our credibility as a leader of business thinking. . . depends on. . . the ideas and policies we put forward. ([5], p. 3)
In general this report steers clear of value judgments about the consequences of different states or regions setting different priorities with respect to mobility-related issues. An exception is made where these choices significantly limit the freedom of other states or regions to express their own priorities. ([8], p. 17)
Title of report and year | Issue | Industry sector | Size | Location |
---|---|---|---|---|
Signals of Change: Business progress toward sustainable development, 1997 | General | General | Large | Global |
Sustainability Through the Market: Seven keys to success, 2001 | ||||
Tomorrow’s Markets: Global Trends and Their Implications for Business, 2002 | ||||
Industry, Fresh Water and Sustainable Development, 2001 | Specific | General | Large | Global |
Engaging the private sector in the Clean Development Mechanism, 2004 | ||||
Strategic challenges for business in the use of corporate responsibility codes, standards, and frameworks, 2004 | ||||
Breaking New Ground: Mining, Minerals and Sustainable Development, 2002 | Specific | Specific | Large | Global |
Toward a Sustainable Cement Industry, 2002 | ||||
Intellectual Property Rights in biotechnology and health care, 2003 | ||||
Promoting Small and Medium Enterprises for Sustainable Development, 2007 | General | General | SME | Global |
Investing in a Low-Carbon Energy Future in the Developing World, 2007 | General | General | Large | Regional |
Buenos Aires Dialogue – Regional perspective, 2008 |
2. The global diffusion stimulation effort
3. The advocacy and institution-building effort
the leading business voice on sustainable development. Our views are regularly sought, and listened to, by governments, international governmental and non-governmental organizations and special-interest groups, as well as by the business community itself. ([5], p. 2)
Discussion
Contributions to business power research
Contributions to the study of large-scale institutional work
Conclusion
Acknowledgments
Funding
Footnotes
Appendices
Number | Reference | Type of document |
---|---|---|
1 | Schmidheiny, S. (2006). My path—my perspective. VIVA Trust. | Autobiography |
2 | World Business Council for Sustainable Development (Lloyd Timberlake). (2006). Catalyzing change: A short history of the WBCSD. Geneva. | Authorized history |
3 | World Business Council for Sustainable Development. (2011). Annual review 2010/2011. Geneva. | Annual report |
4 | World Business Council for Sustainable Development. (2018). WBCSD membership conditions. Retrieved from www.wbcsd.org, May 15, 2020 | Statutes |
5 | World Business Council for Sustainable Development. (1997). Annual review 1996. Geneva. | Annual report |
6 | World Business Council for Sustainable Development. (2001). Annual review 2000. Geneva. | Annual report |
7 | World Business Council for Sustainable Development. (2000). Annual review 1999. Geneva. | Annual report |
8 | World Business Council for Sustainable Development. (2004). Mobility 2030: Meeting the challenges to sustainability. Geneva. | Issue specific report / guide |
9 | World Business Council for Sustainable Development. (2002). Annual review 2001. Geneva. | Annual report |
10 | World Business Council for Sustainable Development. (2003). Annual review 2002. Geneva. | Annual report |
11 | Business Action for Sustainable Development. (2002). Business events calendar for the world summit. Retrieved from: http://basd.free.fr/resources/business.htm, May 22, 2020 | Website content |
12 | Business Action for Sustainable Development. (2001). Protesters bang the drum for BASD. Retrieved from: http://basd.free.fr/docs/releases/9-1oct2001.html, May 22, 2020 | Press release |
13 | World Business Council for Sustainable Development. (2016). Unlocking more value with fewer resources: A practical guide to the circular economy. Geneva. | Report |
14 | Business Council for Sustainable Development. (1993). Getting eco-efficient: How can business contribute to sustainable development? Report of the BCSD First Antwerp Eco-Efficiency Workshop. Geneva. | Conference proceedings |
15 | World Business Council for Sustainable Development. (1995). Eco-efficient leadership for improved economic and environmental performance. Retrieved from: http://wbcsdservers.org/wbcsdpublications/cd_files/datas/wbcsd/business_role/pdf/EELeadershipForImprovedEconomic&EnviPerformance.pdf, April 6, 2020 | Guide |
16 | World Business Council for Sustainable Development. (2000). Projects and activities. Retrieved from: https://web.archive.org/web/20000819011120/http://www.foundation.no:80/projects.htm | Website content |
17 | World Business Council for Sustainable Development. (2000). WBCSD and World Bank pioneer joint Internet educational initiative. Retrieved from: https://web.archive.org/web/20010422180401/http://www.wbcsd.org:80/publications/prmedia/press26.htm, April 6, 2020 | Press release |
18 | World Business Council for Sustainable Development. (2005). Annual review 2004. Geneva. | Annual report |
19 | World Business Council for Sustainable Development. (1997). The Global Network. Retrieved from: https://web.archive.org/web/20010423143410/http://www.wbcsd.org/publications/prmedia/iht3.htm, April 7, 2020 | Website content |
20 | World Business Council for Sustainable Development. (2006). Annual review 2005. Geneva. | Annual report |
21 | Stigson, B. November (1999). The business agenda for sustainability in developing and emerging countries. Retrieved from: https://web.archive.org/web/20000819012634/http://www.wbcsd.ch/Speech/s68.htm, May 13, 2020 | Speech by WBCSD president |
22 | World Business Council for Sustainable Development. (2000). Stakeholder dialogue. Retrieved from: https://web.archive.org/web/20010421002007/http://www.wbcsd.org:80/sustain1.htm, June 7, 2020 | Website content |
23 | World Business Council for Sustainable Development. (2001). Stakeholder dialogue: The WBCSD’s approach to engagement. Geneva. | Report |
24 | World Business Council for Sustainable Development. (2005). WBCSD’s 10 messages by which to operate. Retrieved from: https://web.archive.org/web/20071220124536/http://www.wbcsd.org:80/templates/TemplateWBCSD5/layout.asp?type=p&MenuId=MTAyMQ&doOpen=1&ClickMe, April 9, 2020 | Guide |
25 | Stigson, Björn. (1997). Partnerships for sustainable development. Retrieved from: https://web.archive.org/web/20010423142706/http://www.wbcsd.org:80/publications/prmedia/tomorrow4.htm#top April 7, 2020 | Statement by WBCSD President |
26 | World Business Council for Sustainable Development. (2008). Annual review 2007. Geneva. | Annual report |
27 | United Nations. (1999). Business leaders advocate a stronger United Nations and take up challenge of Secretary-General’s Global Compact. Retrieved from: https://web.archive.org/web/20010108153700/http://www.un.org/partners/business/iccun1.htm March 20, 2020 | United Nations press release |
28 | World Business Council for Sustainable Development. (2000). The WBCSD and the Global Compact. Retrieved from: https://web.archive.org/web/20010405121745/http://www.wbcsd.ch:80/globalcompact/index.htm May 7, 2020 | WBCSD Report |
29 | World Business Council for Sustainable Development. (2004). Annual Review 2003. Geneva. | Annual report |
30 | World Business Council for Sustainable Development. (2000). European Eco-Efficiency Initiative. Retrieved from: https://web.archive.org/web/20010414085052/http://www.wbcsd.org:80/ecoeff1.htm, June 1, 2020 | Website content |
31 | Stigson, Björn. (1999). The Business agenda for sustainability in developing and emerging countries. Retrieved from: https://web.archive.org/web/20000819012634/http://www.wbcsd.ch/Speech/s68.htm, July 25, 2020 | Speech by WBCSD President |
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