Can businesses influence global development and help alleviate world poverty? Björn Stigson, President of the World Business Council for Sustainable Development (WBCSD) is intentionally blunt in his assessment of the situation: "Businesses can make a difference, but it requires support from governments who play a critical part in creating the framework conditions in which business serves society."
The media coverage of sustainable development issues in general and energy and climate issues in particular has been unprecedented through much of 2007. Not only have there been record amounts of it, but the stories suggest huge changes in the ways in which governments, companies and individuals approach energy issues.
"Climate issues are of real concern in all parts of the world, and there is still much to be done," says Björn Stigson. As president of the WBCSD for the past 12 years, he is well-qualified to comment on the role of businesses in global development. "Business is now seen as a necessary part of the sustainable development equation. However, business cannot succeed without a basic framework of law and trade regulation, infrastructure, services and education and healthcare. Governments play a critical part in creating such framework conditions but there is often a lack of political will."
Makes good business sense
The WBCSD, a unique, CEO-led, global association of some 200 companies dealing exclusively with business and sustainable development, argues that they must address major social and environmental issues as part of their business strategies because ultimately it makes good business sense. "A business's long term competitiveness - its license to operate, innovate, and grow - will increasingly depend on how it embraces societal challenges," says mr Stigson.
Call for long-term framework conditions
"The year 2007 has been something of a watershed for issues of sustainability, especially climate and ecosystems and the wider impacts for human activity," says mr Stigson.
"Today, no one should be in any doubt that climate change is upon us. Climate change has made its way on the agendas of global conferences; the media publish climate-related stories daily, and the progressive business is becoming a leading advocate for action," he adds.
"The big question now," says mr Stigson "is how are we going to respond. If globalisation has taught us anything over the past decades, it should be that we are all inextricably linked and that our actions all impact upon one another. Nowhere is this truer than with climate change. Rising to the challenge therefore will require coordinated policies by global society as a whole. This will be a huge task. Long-term framework conditions are needed now."
A sense of urgency and opportunity
"Without thoughtful policy shifts we may be heading towards both energy insecurity and climate change," says mr Stigson. "The macroeconomic picture is becoming increasingly focused: investment in prevention now will, in all likelihood cost less than trying to adapt later." Mr Stigson also points out: "Some companies see opportunities in developing products and services to both mitigate and adapt to climate change."
At the WBC's recent meeting in Brussels, mr Stigson warned delegates that "the stakes are going up on sustainable development issues. In fact, sustainable development is becoming a competitive issue and creating growing tensions inside of the business community".
Sustainable development has reached a "tipping point" noted mr Stigson. "There has been an emergence of new economies. Media interest in sustainable development has never been so high. The financial markets are beginning to act and reflect this. All in all, there is a growing sense of urgency. However, general consensus seems to indicate that we are not moving fast enough. So the question is: where is the power of change going to come from and who is in charge of creating a sustainable world?"
Noting the difference between the "hard power" (such as military force) and "soft power" (such as the influence of business), mr Stigson called upon the corporate leaders to work together to "use the WBCSD as a soft power tool to contribute to a sustainable world that is a good place for doing business." Mr Stigson elaborated, "you cannot solve climate change with hard military power".
He firmly believes that "we are all in this together; no one part of society can create a sustainable future on its own. For its part, the WBCSD has to become sharper at advocacy. There is a real need to educate different sectors of society about the role of business. We need to define and explain the role of business in sustainable development. We need to educate both society and governments about how business works," he adds.
A trilogy of reports on energy and climate
As part of its efforts to reach this goal, the WBCSD recently published three reports which highlight the scale and complexity of the challenges ahead. This work is based largely on the experience that WBCSD member companies have had in addressing global challenges.
He comments, "We are publishing the Trilogy at a time of intense debate. Directions set in the next few years will have profound consequences for future generations - we believe business should be clear about its purpose and candid about its dilemmas".
The next industrial revolution
So is this a good time for companies to think about greening their businesses?
"It's definitely a good time to look at all the issues around sustainability, it is about the future," believes mr Stigson. "The expression people are using is that itÕs the new, or the next, industrial revolution. People used to see sustainability only as a constraint, an additional cost, but they're able to increasingly see that there are real opportunities associated with sustainability".
At the same time mr Stigson acknowledges that evidence is mounting that the climate is already warming, and even if greenhouse gas emissions were halted, global temperatures would still rise as UN and other reports indicate. So what can businesses do?
"Our members accept that they must work with governments and NGOs to limit climate change. Further, we believe climate change effects will alter existing business models and change current risk structures. In the business arena, we accept there will be both winners and losers," says mr Stigson.
He thinks the current discussions on adaptation should focus on raising awareness and highlight the challenges. "Adaptation describes a set of responses (to the actual or potential impacts of climate change) to reduce the harm that climate change may bring," he explains and adds "business also must show leadership on the issue by examining the short-term and medium-term risk factors worldwide."
Turning to the subject of how businesses are currently combating greenhouse gas emissions, mr Stigson says that "an increasing number of companies are responding to this challenge by completing greenhouse gas inventories, quantifying their emissions, reporting emissions and setting emissions reductions goals."
He continues, "We also believe a changing climate is likely to have significant ramifications on operations, strategic decisions, market development, investor relations and also on communications and policy. Indeed, experience from multinational companies indicates that management commitment is important to steering businesses through the new environmental landscape."
Need for independent verification services
Commenting on DNV's role in climate change issues, mr Stigson believes companies stand to benefit from working with independent organisations when verifying and reporting their emissions. "I believe such services will become even more important in the future because there is a growing understanding among companies that they have to be recognised as being environmentally friendly if they want to operate. There is indeed evidence that some businesses and, in particular government departments, are demanding that suppliers and partners adhere to responsible environmental practices."
Mr Stigson attended the recent United Nations Climate Change Conference in Bali, Indonesia. After some tense negotiations that spilled over into an unplanned extra day, participants finally agreed on a "Bali Roadmap".
"This presents a unique opportunity for us in business and one that we now need to build on," says mr Stigson and concludes, "but it will require increased involvement from business leaders and WBCSD member companies. We will continue to position WBCSD as a key resource for business input into the intergovernmental arena so that we continue to be seen as a credible and constructive force."
Outcome of the United Nations climate change conference (COP 13)
After some tense negotiations that spilled over into an unplanned extra day, participants finally agreed on a "Bali Roadmap". This document charts the course for a new negotiating process to be concluded by 2009 which will lead to a post-2012 international agreement on climate change.
While this was a very significant achievement according to Mr Stigson, COP13 also resulted in other important breakthroughs. First, it shifted the focus from a discussion about "if we need global action on climate change" to "what do we have to do as a global community?".
It also made clear that climate change and developement are inextricably linked; put adaption to climate change strongly on the agenda; identified deforestation and forest degradation in developing countries as a key source of carbon emissions; and raised the interest for industry sectoral approaches as a policy tool. But perhaps very significantly, it put business at the center of the development of the content for the "Bali Roadmap".
Photo: Nina Eirin Rangøy