Sustainability Inc.: Politics of Sustainability!

Last week in Sustainability Inc., we listed the skills sets and areas of knowledge needed for sustainability professional, with a brief explanation of why the skills sets were important. This week I am going to start looking into the areas of knowledge and why they are important. The first to be unpacked will be politics and policy, which in my view are very important areas for sustainability professionals to have an understanding of. In this blog I will attempt to explain not only why it has become important, but I will also highlight some relevant areas of policy.

But first a quote that saliently illustrates the political link between Corporations, Society and Government: -

“The important thing for business and society at large to understand is the limit to voluntary action, which is the point where government need to intervene. If we are to live within the earth’s capacity and share its resources equitably, economies must be transformed. That cannot be done by business alone” (Cowe R and Porritt J, 2002)

Since this was written the politics have sharpened, with the global economy boom and spectacular crash in 2008, which has created mistrust with the financial sector and big business. Companies have also started to move into markets in the developing world, to create new revenue streams and increase their profits, which brings with it a new political dimension. The growing global populations and the industrialisation of developing countries is adding to pressures on natural resources which is increasing the cost to consumers, as the search for new reserves goes to new parts of the globe, creating more political tension and corporate disasters. Lastly, and by no means least is the increase in natural disasters and extreme weather incidences, which fuels the environment and climate change debate.

The effect this is having on society is dramatic, people are more aware of the environmental impact they are having on the world and want to do something about it, they are concerned about human rights and how people are treated across the globe. It has created much cynicism about the corporate world and in the information age it is possible to find information on a company’s environmental record and working practices and if these are deemed unacceptable a company’s reputation can be damaged through the use of social media. The knock on effect has been that consumers want to buy products from companies that operate in a responsible way and shun those that do not.

This has lead to business and politics becoming ever more interconnected and because society is more engaged, so have politician. Which in turn brings new white papers, policy ideas and ultimately Government to intervene and facilitate the necessary shifts in behaviour to start answering the big questions around use of natural resources, the environment, energy generation and ethics.

Governments and International organisations have set to work creating a raft of policies and codes of practice for companies to follow. So of which are actions such as health and safety and others being the disclosure of information, creating a carrot and stick.

Policy makes are aware of the power the consumer has over companies now, so they rely on public opinion as a stick and an increase in revenue as the carrot. An example of this type of policy is in the UK, where a new regulation came in in 2012 to help with carbon emission targets as set out in the Kyoto Protocol. Companies must publish their carbon emissions on an annual basis, not reduce them. Politicians are then able to say that they are not overly legislating business, with the aim being that companies reduce their carbon footprints voluntarily. The last, two voluntary codes of practice I shall highlight is the UN’s Global Compact, (2000) and Guiding Principles on Business and Human Rights (2011); these are voluntary guidelines for companies to follow with some of the largest Corporations already registered.

There are also policies in the development stage in renewable energy field, which when implemented could offer could encourage business down a more renewable path through the use of incentives and grants and more aggressive fines if targets are not met.

This is a brief outline of the politic to sustainability and a description of the types of policies and codes of practices, which are currently being drafted. The amount of legislation that will follow on sustainability will only increase. It will be up to the Sustainability Professional to not only interpret these rather opaque documents for the company they serve, but then be able to implement an action plan to ensure the company is compliant. With a view to saving the business revenue, ensuring all potential grants and incentives are gained and working within the supply chain to ensure reduction in energy.

I hope that this goes some way to explain the complexities of sustainability and why it is important for the professional to have a grasp of politics and policy if they are going to add value to a business.