x Abu Dhabi, UAEMonday 24 July 2017

Profits, not politics, should guide the post-Rio agenda

Environmentalists are grumpy about government failures, but meanwhile the private sector is quietly moving ahead with some truly meaningful reforms.

The more than 100 heads of state have left in a whirl of motorcades and private jets. The 50,000 delegates have gone home. The hundreds of daily seminars, talk shops and panel discussions have gone silent. The camera crews and satellite dishes have been packed up. Rio de Janeiro can breathe again.

The United Nations Conference on Sustainable Development, otherwise known as Rio+20, concluded last week, and the verdict is in: failure. From editorial pages to activist groups, to governments and even the head of the UN body that organised the summit, Rio+20 has been roundly condemned as a historic missed opportunity.

Kumi Naidoo, executive director for Greenpeace International, called the summit "a failure of epic proportions" and said "the only outcome of this summit is justifiable anger". Even the under-secretary-general of the conference, Sha Zukang, admitted frustration, saying: "This is an outcome that makes nobody happy."

The 188 gathered governments hardly moved the ball forward from the 1992 Rio conference that kicked off the global sustainable development conversation. The meeting's final communiqué was a flurry of banal reaffirmations of general principles with little substantive, specific action.

"It was hard to find a happy soul at the end of the Rio+20 environmental summit," the Associated Press reported. Activists denounced the summit's final statement as "dead on arrival", the AP wrote. "In the end, this conference was a conference to decide to have more conferences."

But not so fast.

If looked at strictly through a government policy lens, the gathering was indeed a failure. Yet this should not be surprising. Those who think it's easy getting 188 countries with vast and diverse and competing views of the world, economic growth and the environment to agree on specific action have obviously not been paying much attention to the way the world works today. European nations that share much deeper ties and outlooks can hardly agree on specific policies to rescue the euro zone, an issue with immediate pressing implications, not long-term ones.

Indeed, we might be living in what geopolitical strategist and author Ian Bremmer calls a "G-Zero World", where governments simply do not have the ability to tackle the big issues, such as long-term sustainable development, in a meaningful way.

But the key question of maintaining sustainable, equitable economic growth while maintaining the security of the environment is not solely predicated on what governments do. Perhaps even more importantly, we need to be watching what businesses do. Major global conglomerates like Wal-Mart or Unilever have enormous impacts on global supply chains. When they enact "fair trade" or environmental safety policies in their supply chains, they can have more of an effect than the statements of a government minister. These policies ripple from Chile to China, Taiwan to Texas.

In fact, Wal-Mart has been a leader in this realm of sustainable supply chains. In 2009, it began actively studying its supply chains to ensure that suppliers maintained high standards of environmental and social protection. The ripple effect on suppliers worldwide has been significant, pushing Wal-Mart's global suppliers to reduce energy use and ensure social protection.

Many of Wal-Mart's competitors followed suit and now most major global retailers and manufacturers have sustainability scorecards of some sort in their supply chains, including Procter & Gamble, Dell and Kaiser Permanente.

Wal-Mart is now upping the ante again. It will soon release sustainability requirements for 100 specific categories of goods, marking one of the most comprehensive global supply chain sustainability initiatives in history. For those hungry for an advance, this is a significant one.

But Wal-Mart is not alone. The sporting-goods retailer Puma has launched a sustainability economic profit and loss account to quantify the economic risk from environmental impact along its supply chain. Unilever has written a sustainable living platform that will be a major component of its business model. And companies and associations in the developing world are following suit, building their own sustainable brands because they understand that it is not only good for the environment, but it's also good for the bottom line.

This leads to perhaps the most important report that emerged from the literally thousands of documents flooding Rio. It's called the Business Case for the Green Economy: Sustainable Return on Investment. The report, published by the UN Environment Programme and written in collaboration with two leading sustainable development-focused think tanks, makes a very compelling case that "going green" in business is not just good for the planet and people, but also good for profits. Indeed, the three "Ps" - people, planet, profits - are becoming standard operating practice among the new generation of business executives.

Issues such as environmental protection and sustainable development have gone from a niche concern for development practitioners and environmental activists to the global mainstream in business. While politicians may not have moved much since 1992, the world of business has undergone a dramatic transformation, one that is irreversible.

The road ahead is still long and the challenge immense, but for all those who saw doom and gloom from the Rio+20 summit, take cheer from the private sector, where the movement towards green business is growing rapidly.

 

Afshin Molavi is a senior adviser at Oxford Analytica and a senior research fellow at the New America Foundation

On Twitter: @afshinmolavi