How Much Can Business Influence the Environment?
This is the eleventh blog and final blog for 2012 in a weekly series on how sustainability can save business. It appeared on Tuesdays, and will commence again in 2013.
Our first blog, How Sustainability Can Save Business, reframes the common purpose of traditional Corporate Social Responsibility (CSR) practitioners — that of “saving the environment.” Our premise: Given the social and economic frameworks and institutions of our society, more can be accomplished (and faster) by viewing sustainability as an economic opportunity relevant to business, compared to viewing it as an environmental initiative in isolation of business. Therefore the goal of “saving the environment” may be more appropriately framed as “saving business.”
Our perspective is pragmatic; that the worthy purpose of “saving the environment” is destined to be ineffectual, and at best immaterial, if environmental initiatives are pursued in isolation of the economic engines and structures of our society — that is, capitalism, business, government and the active participation of other organizations and individuals within this framework. It is within this framework that companies are applying a central guiding principle to their business sustainability strategies — “derive economic benefits from improved environmental and social outcomes.” Why? Because it delivers results.
We do not argue the desired outcome of healthy people and a healthy planet, and an economic framework that includes a broader social purpose. Indeed, we align on these values. After all, Jim was leader of the Green Party of Canada and Tyler used to earn his living as a conservation biologist in the forests of British Columbia, Alaska and the Northwest Territories.
It’s just that we don’t really think we have time to wait for traditional approaches to environmentalism to be successful. Similarly, we do not argue the value of traditional environmentalism and the vital role it continues to play within our society; rather, we simply note that traditional approaches to environmental objectives have failed to deliver results at the scale that’s required and in the time frame that’s required. In short, traditional environmental methods have not been successful enough, fast enough.
During the interim, some businesses have demonstrated that they can implement and scale the environmental benefits far better than traditional approaches to “saving the environment” while also delivering shareholder value. For example, Canadian Tire estimates that they have accumulated an annual benefit stream of approximately $25 million in cost avoidance since launching its Business Sustainability Strategy in 2008 and reduced its transportation and real estate greenhouse gas footprint by 9 per cent while actually growing — increasing their tonne-km of product shipped by 22.5 per cent and the amount of real estate area by 9 per cent!
This applied eco-capitalism favours free market principles to achieve environmental objectives. Which is convenient, since business will find itself in an economic context in which sustainability issues will increasingly influence financial performance and global trade.
As such, our observation is this — for profit seeking companies, sustainability is most successfully employed as a strategic framework for innovation, value creation, employee engagement and organizational improvement — while generating environmental benefits. What excites us most about this approach, is that it would appear that Canadian business also shares this view.
Companies are informed and engaged; some even track, manage and mitigate their GHG emissions with internal rates of return (IRRs) at multiples of the cost of capital. And some incorporate internal carbon pricing into management discussions and decision-making. Many have discovered that business sustainability issues are production issues, supply chain issues, marketing, sales and customer issues, and post-consumer use issues. In short, they are economic issues in addition to being environmental issues, and we say, engage them as such.
As we noted previously, the Canadian Council of Chief Executives (CCCE) has urged Canada for a “national approach to climate policy and carbon pricing” in a policy paper — Clean Growth 2.0: How Canada can be a Leader in Energy and Environmental Innovation — highlighting how Canada can build a more competitive economy and a more sustainable society while ensuring adequate public finances to fund Canadians’ way of life.
Most recently, Perrin Beatty, the president of the Canadian Chamber of Commerce, has echoed this opportunity in a policy paper on strategic partnerships among Canada and Mexico, noting that carbon pricing is an area that may be ripe for bilateral Canada-Mexico collaboration. It is interesting to note that Beatty served as a Member of Parliament for the Progressive Conservative Party of Canada for 20 years (1972-1993) and served as a Cabinet Minister.
Change is afoot. The environmental community knows it; the business community knows it. All we need is for Canada’s government to know it — to recognize the opportunity and collaborate with business and the rest of society to build the policy framework that will enable us to participate in the greatest entrepreneurial imperative of our time, the creation of economic benefits from social and environmental leadership.
Which brings us to the original question: Will business influence Canada’s approach to environmental issues? We think they already are. And perhaps the question should be: How successful will business be in influencing Canada’s approach to environmental issues?