At the Convention for Biological Diversity’s Conference of the Parties 10 that is ongoing in Nagoya, Japan, opinions are divided on whether business has a role to play in biodiversity. Strange though that may sound, at the same Conference some businesses are justifying that opinion by their actions. Major pharmaceutical companies in several Western nations blocked the adoption of important international conventions that would govern the principle of payment for environmental services. Their actions notwithstanding, business is the problem, but business is also the solution.
Degradation of the environment through destruction of natural habitats began the day the first human settlement was established – 150-200,000 years ago. Man’s impact on Nature has increased and recently entered a particularly intense phase with demand for biofuels, food production creating a several unsustainable relationship between man and nature. All this comes at a cost though, for the over exploitation of nature has already had remarkable costs. The European Commission’s Biodiversity Unit revealed this morning that the contribution of world fisheries to the global economy fell by Euro 50 billion due to environmental degradation. That is set to increase, and business led environmental damage like the recent BP oil spill will only intensify opinion that business is the problem.
What are the options? Governments have been mixed in their response to environmental issues. A few, like Japan, have established guidelines and made definite strides in the right direction, but most “…continue to engage constructively to contribute to an agreed outcome on a post-2012 arrangement that is both environmentally effective and economically sustainable.” As the GRI’s Sean Gilbert pointed out at COP10, the problem with continuing on a journey, is that you might never reach the destination.
That leaves us with business. The bad guy and also the good guy. There are two types of business – the large Corporation and the Small and Medium Enterprises. As opined several times at the International Business and Ecosystems Dialogue at COP10, all depend on consumers for their existence. Consumer pressure should therefore be an effective inducement to business at all levels, to be more environmentally responsible. That though is complicated by an important consideration – relying on the consumer to drive environmental sensitivity amongst businesses risks forcing a consumer, or marketing, alignment to conservation strategies. The rush to secure various forms of certification and broadcast the fact in the media is an example of this. It means that the more charismatic animal species and the areas most in the public eye will have much more likelihood of adoption by businesses for conservation, whilst those less visible, although equally critical to biodiversity, may not.
Yet, business is very much a part of the solution to achieving sustainability. Being largely the culprit as well, engagement of business at a more focused and broader level and forcing fundamental change in the behaviour of business, can achieve significant progress towards sustainability. Achieving an equilibrium between human use of resources and those available or renewable on our planet is achievable, but it demands urgent and comprehensive action. That action is not being taken by governments, and cannot be undertaken by conservation NGOs alone, or by individuals – however great their goodwill might be. No single sector or group has the resources and reach that business commands. Failing to engage business would be an irrevocable and fatal error.
We need to go beyond what is being advocated generally on engaging business in environmental issues. Most companies exist specifically to make profit, and they, and their shareholders, logically emphasise profit. There are exceptions of course but generally a CEO who strongly advocated sustainability and modified corporate policy with the usual short term costs of more responsible behaviour, would almost surely risk his or her job at the next quarterly performance review. The pressure for a greater environmental conscience needs to be applied therefore, not only on consumers, but also on shareholders. Every business will respond to the demands of its customers, but shareholders can make sure that response is ethical, transparent and achieves a tangible environmental outcome.
‘Pressure’ may be a harsh word, because pressure should not be required in encouraging sustainable behaviour. The arguments are clear and even in spite of the tenuous arguments of doubters, it only takes 10 minutes of watching the World News to demonstrate to any sceptic that we are facing a gathering storm of environmental consequences. The only ‘pressure’ that is required is education, for with the knowledge of the vulnerability of marine and terrestrial habitats, species already extinct and highly vulnerable, will surely bring a desire to act.
Governments and Non Governmental organisations have a wealth of information on environmental issues, hidden in Congress papers, and Reports of various sorts. This information needs to shared proactively with businesses (and individuals) who need help in acheiving their potential as partners in addressing environmental issues. Empowered with information, and ideally also encouraged by good guidelines, business will respond. The UK Government’s Stern report ominously stated that
analyses that take into account the full ranges of both impacts and possible outcomes – that is, that employ the basic economics of risk – suggest that BAU climate change will reduce welfare by an amount equivalent to a reduction in consumption per head of between 5 and 20%.
Sir. Nicholas Stern also stated in his exhaustive review,
The additional costs of making new infrastructure and buildings resilient to climate change in OECD countries could be $15 – 150 billion each year (0.05 – 0.5% of GDP).
That was in 2006, and the Stern Report is so old that it is now in the National Archives of the UK. It clearly outlines why sustainability and the self interest of businesses are aligned. A Price Waterhouse Coopers representative at COP 10 mentioned that in a 2009 survey, 44% of business leaders thought their governments should be doing more about the environment. The situation may not be as bad as it seems, and there are some wonderful examples of business protecting and enhancing biodiversity. These few though are not enough for the scale of our environmental problem is such that an unequivocal and universal response is required. Companies are a product of their environment – they will respond to customer demands and are subject to shareholder will. With a little help from both, and an effective framework from government, even business could become a force for good in the environment. The alternatives? There are none. A lack of concerted action means that irrevocable damage has already been done.
Dilmah Conservation is a part of the fulfillment of Merrill J. Fernando’s wish to make his business a matter of human service. Together with the MJF Charitable Foundation which has a humanitarian objective, Dilmah Conservation utilises revenue from the global sales of Dilmah to address urgent environmental issues in Sri Lanka. Dilmah Conservation is represented at CBD COP 10, Nagoya. Its programmes in the areas of ecosystems rehabilitation and protection, protection of indigenous communities, environmental education, promotion of biodiversity and sustainable agriculture are recognised as a ground breaking initiatives in Sri Lanka. Dilmah Conservation advocates a partnership amongst private sector organisations, consumers, the state, NGOs and the environment. Its Ethical Tea Society is an example of this principle.