Six Ways That Businesses Are Prodding And Dragging Government Toward Sustainability

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I had the opportunity to speak last week about the relationship of sustainability to public policy in Washington's chandeliered, blue-carpeted Senate Caucus Room where, I was informed, John Fitzgerald Kennedy announced his candidacy for President of the United States 48 years ago.

That was only one of the day’s many humbling moments. Another was that I was addressing an awesome group of CEOs from Massachusetts who have formed the Progressive Business Leaders Network, dedicated to creating sustainable companies and pushing for public policy that will advance sustainable business development.

(Sometimes, despite the weather, the traffic, and the persistent but badly outdated attitude that Boston is the "Hub of the Universe," I love living here. This is one of those times.)

I'm blogging today because I saved the public policy part of the presentation for last, and ended up being severely time-constrained because an annoyingly tall, tanned, and dapper senator, also from Massachusetts, showed up and took most of my air time, which everyone present, I am sure, felt was a good trade. But here is what I was going to say . . .

Companies have a mind-boggling number of ways to advance public policy in favor of sustainability. The following are some proven approaches, presented in order from least to most obvious.

Regulating government: Here I am referring to businesses applying pressure to governments to do the right thing. Over the years, a public expectation has developed (at least in some quarters) that businesses with use their influence in this way. For example, most people expect Google to stand up to the Chinese government on censorship. The big precedent, of course, is the battle against apartheid. South Africa's racist regime finally fell apart when enough businesses threatened to leave the country over the issue.

The Extractive Industries Transparency Initiative, a voluntary agreement by the oil and gas companies to publish details on bogus extraction fees or facilitation payments they must pay in certain countries, is another example of businesses working to regulate government practices--in this case bribery demanded by corrupt officials. The companies are acting in concert since they cannot hope to win by acting individually. I believe the verdict is still out on whether this is working, and I would welcome any update.

Leading government: Many companies in the U.S. are leading the administration and Congress on climate change by participating in the Chicago Climate Exchange or other voluntary mechanisms for addressing the crisis. The Wall Street Journal (subscription required) recently reported:

Mr. Bush has opposed comprehensive legislation to curb emissions. But like an increasing number of utilities and manufacturers, he is aiming to join the discussions in the hopes of shaping the debate and creating a system that won't be too costly to industry or consumers.

Well, hello, Mr. President! This breathtaking piece of reportage by the nation's leading business newspaper underscores the fact that that proactive companies have already framed the debate to the point that this administration is and forever will be on the outside looking in at one of the most important public policy issues of its time.

Partnering with government (and with NGOs): This approach is considered the holy grail by many people--the only way to get the needed traction and speed to climb out of the all the holes we are digging--and it was the basis for any progress made at the World Summit on Sustainable Development in 2002. No treaties were signed there (as compared to the five or six multi-national treaties signed the Rio Earth Summit in 1992), but 300 or so voluntary partnerships were created before, during, and afterwards. (Does anyone know how those have worked out?)

Another example: Wal-Mart met with a coalition of mayors last week, including NYC's Mayor Bloomberg and Boston's Mayor Menno, and reached (per the New York Times) a "ten-point agreement with Wal-Mart, the country's largest seller of guns, to track the sale of firearms more closely."

This is likely an important and hopefully effective partnership and I thought it was telling that the mayors, not Wal-Mart, announced the agreement. Governments now need the active participation and, in many cases, the leadership of private companies to provide even basic goods and services like public safety. Our public agencies are increasingly dwarfed in stature and effectiveness by the world's largest companies. (Remember how FEMA's ineptitude during Katrina was emphasized by the fact that some of the nation's largest companies got private rescue operations going days before the federal group of bozos figured out where New Orleans was.)

Forming your own government: Many industries are, or at least purport to be, self-regulating with various certification schemes sponsored by entire industries, including Responsible Care, established by the chemical companies in the aftermath of Bhopal, the Sustainable Forestry Initiative by the American Forestry and Paper Association, and the recent proliferation of Fair Trade certification programs. Many of these schemes have real teeth: a company cannot belong to its industry's primary trade association unless it is on the program.

Regulate as if you are government: Wal-Mart again. The behemoth has such enormous purchasing power that almost anything it says has the force and effect of law with its 60,000 suppliers. The company's recent packaging guidelines are but one example of the way in which large companies now regulate their suppliers.

Even small companies are now working with their suppliers on environmental or social issues, creating supplier codes of conduct that supplement standard contract language.

Influence the real government: This is good old fashioned lobbying, and many companies have banded together to push Congress or state legislatures for changes in law or regulation that advance the cause of sustainability, usually with their own economic self-interest in mind. (There is nothing wrong with finding that sweet spot.) US CAP consists of corporate climate leaders like DuPont and GE pushing for climate change legislation which will be good for the planet and good for business.

I like to call this "sustainability ju-jitsu": taking the sustainable side of an issue, like investing in clean coal technology and then pushing to make it more expensive for your competitors who are lagging--turning your responsibility into an opportunity and making the other guy pay.

All in all, it's a pretty amazing assortment of strategies (some of them quite new) that businesses are using to pursue sustainability--and their own corporate interests--through governmental and quasi-governmental action.

And that's more or less what I would have said in Washington last week had I not been big-footed by an actual policy maker. But it's my blog, and nobody can pull rank on me here . . .

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