15. Working with the Private Sector

As banks fail, money markets freeze, and politicians bicker over the terms of a bailout (or buy out), more and more people are focusing on financial outcomes and economic stability for their own futures and less on perspectives such as the role of markets and business in biodiversity conservation. Yet it is becoming increasingly clear that markets and companies, once perceived as a conservation “problem” by environmentalists, will need to be an important part of the solution.

Businesses that are especially likely to have impacts on biodiversity fall within the following four categories:

Today, several approaches are being adopted by various parties, both business and non-business, in an attempt to transform business practices, commodity markets, and company and producer-association relationships, as part of efforts to achieve greater environmental sustainability.

During the Barcelona Forum, several business sectors provided a focus for discussion including fisheries (Chapter 17), energy (Chapter 7), agriculture (Chapter 20), extractive industries and tourism.

The nexus between extractive industries and conservation is highly emotive and has been the subject of intense concern on the part of IUCN Members over the years, especially with respect to the impacts on indigenous and local communities. The International Council on Mining and Minerals (ICMM) (2006) has developed Good Practice Guidance for Mining and Biodiversity which provides information across all operational stages and includes specific guidance on stakeholder consultations. Several Resolutions (WCC 4.084, 4.087, 4.088, 4.089 and 4.090) were adopted in Barcelona targeted at mining impacts on biodiversity at regional and global levels and specifically impacts on protected areas and on local and indigenous communities.

The United Nations World Tourism Organization (UNWTO) reported 924 million tourists travelled internationally in 2008 and forecast 1.6 billion international tourist arrivals by 2020 (UNWTO, 2009). The Global Sustainable Tourism Criteria (GSTC) Partnership, a coalition of 32 organizations including IUCN, has reached out to close to 100,000 tourism stakeholders, analysed more than 4,500 criteria from more than 60 existing certification and other voluntary sets of criteria, and received comments from over 1,500 individuals to develop the Global Sustainable Tourism Criteria (GSTC Partnership, 2008). These represent the minimum standards that any tourism business should aspire to reach in order to protect and sustain the world's natural and cultural resources while ensuring tourism meets its potential as a tool for poverty alleviation (http://www.sustainabletourismcriteria.org). IUCN, in cooperation with Accor Hotels and the International Hotel & Restaurant Association, has also launched Biodiversity: My Hotel in Action guidelines for the sustainable use of biological resources in this sector (IUCN, 2008a).

In addition, an emerging sector of “biodiversity businesses” – commercial enterprises that generate profits via activities which conserve biodiversity, use biological resources sustainably, and share the benefits arising from this use equitably – is also gaining attention. Bishop et al., (2008) argue that the current biodiversity challenge is to re-orient the economic incentives that drive private investment, production and consumption, and to make biodiversity conservation a viable business proposition in its own right.

The challenges that environmental degradation presents to all of these include water scarcity, climate change, habitat change, invasive species, overexploitation of oceans and nutrient overloading. The current market turmoil, alongside the urgent environmental challenges, makes it more relevant than ever to promote collaboration across the public and private sector and governments in protecting biodiversity and ecosystem services which are an integral part of many business operations (Box 15.1). Conservation organizations can help to put biodiversity action/management plans in place for large-footprint businesses, such as ongoing rehabilitation of mines. This approach not only minimizes impacts of mining on biodiversity, but also helps the company to attain a license to operate for its next development.

Box 15.1 WWF and Coca Cola – a water conservation partnership

In 2006, the Coca-Cola Company and its franchised bottlers used approximately 290 billion litres of water for beverage production, of which approximately 114 billion litres were contained in the beverages sold around the world, and another 176 billion litres were used in beverage manufacturing processes such as rinsing, cleaning, heating and cooling.

Coca Cola and WWF established a partnership in 2007 that works on both improving water efficiency and reducing the carbon emissions from the company's system-wide operations, and helps the corporation promote sustainable agricultural practices. In addition, Coca Cola and WWF will collaborate on projects to conserve freshwater basins.

Source: WWF, 2007

The primary objective of business is to make profit, but the private sector is increasingly recognizing the detrimental impacts on the environment of some of its activities and the fact that these impacts pose a risk factor to its own longer-term success. Businesses are finding that greater focus on “being green” can also enhance efficiency while smart business practices can make their operations greener and more likely to be successful. Indeed, sustainability-focused companies were found to have fared better during the recent financial crisis (AT Kearney, 2009). The potential benefits of business with a sustainable development philosophy is one of the issues being explored by the World Business Council for Sustainable Development (WBCSD – www.wbcsd.org), a CEO-led, global association of some 200 companies that is examining the role of business in sustainable development.

Both demand and supply-side rationales exist for business to develop and implement Corporate Social Responsibility (CSR) programmes. As Lyon and Maxwell (2008) note, from the demand side, environment friendly products are a growth business, investors are driving companies to adopt “green practices” and employees prefer working for companies that “make the world a better place”. From the supply side, environmental efforts often can be more cost effective than other options and also enhance longer-term access to resources needed for production. For example, convincing hotel guests to use less water as a benefit to conservation also saves on the hotel's water bill. Nevertheless, Margolis et al. (2007) reviewed the link between corporate social performance and corporate financial performance and found only a very small but still positive association.

Another measure businesses can take is engaging in voluntary environmental programmes, Depending on whether these programmes are self-monitored or externally evaluated, their impact on business is highly variable (Darnall and Sides, 2008).

Larger multinational corporations may have stronger incentives for “going green” because of the influence of the public spotlight on their activities and associated reputational risks but also because they have the capacity to make changes. A large company with poor environmental practices may be publicly criticized. Multinational companies have global standards to which they have to adhere. It is in this capacity as sector leaders that large companies have a positive role to play. They can offer procedures and guidelines, training and awareness.

A challenge for conservation organizations is how to get small and medium-sized enterprises (SMEs) involved. Often SMEs do not have the resources or capacity to undertake conservation efforts, or lack the international, or even national, reputation to make it worthwhile or politically necessary to do so.

New tools and mechanisms to help business engage constructively in conservation include both engagement in mitigation actions as well as proactive support for conservation. More discussion on tools for a green economy including offsets, payments for ecosystem services (PES), incentives and subsidies can be found in Chapter 12.

BUILDING RELATIONSHIPS WITH BUSINESS

IUCN has developed operational guidelines for working with the private sector (IUCN, 2009a) and has a history of such engagement. Conservation organizations cannot ignore or forget the private sector and its huge impact on biodiversity and ecosystem services. While advocacy has a role for awareness-raising and creating pressure for change, constructive engagement is another, complementary strategy. IUCN and other conservation organizations can influence, encourage and assist in improving business practices, with the objective of improving the policies and practices of entire industries. IUCN and many of its Members do this by working with industry players to improve environmental standards, and eventually government regulations. By engaging with one company, IUCN can create an entry point into an entire sector.

When contemplating whether to engage with corporations, conservationists must first understand that businesses operate differently from non-governmental organizations (NGOs) and from governments. To build a relationship requires understanding of how it will create mutual benefit for both parties. The questions businesses face when considering working with a conservation organization are what are green partnerships, why be greener and how to be greener.

“A “green” partner needs to be professional, objective and transparent in its dealings with private sector partners.”

As with any other conservation organization that enters into a relationship with a business, IUCN must be a critical friend and not a rubber stamp. IUCN as a membership organization is governed by its membership, which is comprised of governments and NGOs. Many Members have voiced concern over such partnerships because of a perceived lack of transparency. Such relationships can also risk an NGO deviating from its mission and purpose. The main apprehension conservationists feel toward such arrangements is that they will be part of “green washing”, where a company uses the conservation organization to imply positive conservation actions by the company that do not reflect reality. To avoid this from happening, it is essential that the “green” partner be professional, objective, and transparent in its dealings with private sector partners. Seen from the private sector viewpoint, this is vital as well, as it ensures the credibility of its partner; if the “green” partner is not credible then the relationship loses its value.

Working with the private sector can be controversial and caution is needed, but many of IUCN's NGO Members have already entered into productive relationships with the private sector, in all parts of the world. IUCN's government Members typically are supportive of NGO-business collaboration because they believe both parties can benefit, thereby delivering better conservation and better business practices. The initial benefit NGOs feel when engaging in these types of agreements is the power businesses have to influence stakeholders and thus contribute to conservation on a vast scale. This power and influence can be seductive and the relationship can easily devolve if both the NGO and the business do not maintain rigorous guidelines. If they do not do so, the long-term benefits of the engagement will be long-term benefits of the engagement will be lost, devaluing the reputations of both parties.

The easiest type of relationships that conservation organizations can undertake with businesses are often related to sponsorship arrangements, including logos, but engaging in such relationships leaves organizations vulnerable to “green washing”. Similarly, conservation organization support for CSR programmes of businesses (meaning self-generated actions above and beyond legal requirements for social and environmental safeguards), has been criticized as those organizations aiding in “green washing” the corporation because CSR is a voluntary programme focused on sustainable practices and does not necessarily mean integrating conservation into the business, nor is it necessarily integrated into overall business practices or business decisions.

More involved relationships can range from joint venture conservation projects to technical support and reviews of companies' activities. For example, since 2004 IUCN has worked with Sakhalin Energy of Russia, a consortium of Gazprom, Shell, Mitsui and Mitsubishi, to provide advice and recommendations on how to minimize risk with oil and gas development to whales and at least part of their habitat. A major part of this work has been the creation in 2006 of the Western Gray Whale Advisory Panel (WGWAP), a panel of independent scientists that provide scientific advice on the company's operational plans. The panel was a successful partnership, convincing the company to re-route underwater pipelines to avoid whale feeding areas based on IUCN advice. More recently, the recommendations of the WGWAP regarding seismic activity disturbing whale populations have resulted in the seismic surveys in the area being stopped (IUCN Press release 24 April 2009 – http://www.iucn.org/about/work/programmes/marine/marine_news/?3069/Stop-all-oil-and-gasactivities-that-could-harm-Western-Gray-Whalessays-panel.

BENEFITS OF A CONSERVATION/BUSINESS COLLABORATION

Collaboration between the private sector and conservation organizations can promote design innovation and technical solutions for both business and conservation. Conservation organizations can help corporations improve their operational performance from an environmental perspective. This could be through biomimicry design of products or buildings, advice on emissions reductions, operational efficiency, or alternate energy sources and technologies. Creating a greener (and more efficient) supply chain can have numerous positive side benefits, especially for large corporations. A sustainable supply chain passes environmental standards and environmental criteria from the company down to suppliers, as part of criteria in their requests for proposals and standards from suppliers of raw materials. Environmental standards enable corporations to create stronger relationships with suppliers, along with health, safety, and quality. Integrating conservation considerations early in project or site design will pay off in the long term.

“Collaboration between the private sector and conservation organizations can promote design innovation and technical solutions for both business and conservation.”

On the other hand, conservation organizations can benefit from advice from the private sector on project management, public relations, financial management, and design of complex operations. For conservation organizations, the challenge, in terms of supply chains, is determining where its advice can be most helpful in bringing about conservation and how far down the chain can conservation standards be passed from subcontractor to subcontractor, and to what level in the supply chain is a corporation responsible.

FUTURE CHALLENGES

Once a corporation has determined to make its operations greener, what operational changes are needed and how can a conservation organization best contribute? How can private interests best be reconciled with the public good?

The need for stronger corporate social and environmental responsibility and government regulations to guide the private sector is broadly accepted in the environmental sphere as in the world's financial markets. The real question is what kind of voluntary initiatives or regulations will ensure outcomes that meet the dual requirements of conservation and profitability.

Many corporations are interested in partnering with conservation organizations to realize better environmental impacts, or cost savings. Few, however, are interested in making fundamental and potentially disruptive changes in their business practices. Companies are willing to enter into partnerships with environmental organizations to improve their practices, but most discussions are more about improved practices rather than new practices.

Partnerships between conservation organizations and the private sector can help make business greener. But until green business becomes the norm and competition between businesses based on green criteria forces corporations to make deep and fundamental changes, the number of businesses that are truly “green” will remain modest. To support the transition to “green business”, conservation organizations and the private sector will need to develop a common language for valuation of the many roles that biodiversity may play in business. In the long term there will be a need for growing recognition on the part of business of the issues; and leadership will be required from within the business community. Concurrently, there will be a need for increased dialogue between companies, civil society and regulators.

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