The Green Economy and Corporate Concerns in Rio+20

Rio+20, the United Nations Conference on Sustainable Development to be held in Rio de Janeiro, Brazil on 20-22 June this year, will mark the 20th anniversary of the United Nations Conference on Environment and Development, also know as the Earth Summit (UNCED).

The 2012 conference has three objectives: to secure renewed political commitment to sustainable development; to assess the progress and implementation gaps in meeting already agreed commitments, and to address new and emerging challenges facing the environment.

The conference this year will focus on issues such as the move toward a sustainable economy in the context of poverty eradication and governance reform.

The UNCSD Secretariat, along with its partners, has published issue briefs for each of the twelve issues under debate. The themes are trade and green economy; options for strengthening IFSD; issues related to an intergovernmental body on SD; Oceans; Sustainable cities; current ideas on sustainable development goals and indicators; green jobs and social inclusion; reducing disaster risk and building resilience; food security and sustainable agriculture; regional, national and local level governance for sustainable development; water, and science and technology for sustainable development.

During the preparatory process leading up to Rio+20, there has been extensive debate regarding the United Nations Environmental Program (UNEP)’s “Green Economy” agenda.

Monetizing Nature: The UNEP’s “Green Economy”

Promoting the idea of a “green economy” as a necessary precursor to sustainable development, the UNEP’s Green Economy Report (GER) was published in February 2011.

The GER postulates that the environment could be preserved alongside faster and more efficient economic growth, if funds from environmentally damaging governmental subsidies (fossil fuels, fisheries, etc) were to be reallocated toward investment in new technologies.

The GER advocates “investing two per cent of global GDP in greening ten central sectors of the economy in order to shift development and unleash public and private capital flows in a low-carbon, resource-efficient path.”

The report states that this reallocation—achieved through measures that include policy reforms such as taxation—will result in normal economic activity in the short run and significantly heightened activity in the long run, while reducing the risk of crises and shock endemic to the current model.

The report demonstrates that investment will enhance new sectors and technologies that will be the future’s main source of economic development: renewable energy technologies, energy efficient buildings and equipment, low-carbon public transport systems, infrastructure for fuel efficient buildings and equipment, clean energy vehicles, and water management and recycling facilities.

The market-based approach propagated by the GER involves measuring and quantifying the value of natural resources, to assign monetary values in an attempt to foster their protection.

The report has been criticized by NGOs for neglecting underlying causes of the ecological crisis. The NGOs argue that economic growth, technology and market-based approaches cannot be the only solutions pursued. Monetizing natural resources would mean their consequent privatization, which would eradicate state and community rights to protect the resource commons.

“We need to move from protecting the environment from business to using the business to protect the environment,” ehe report’s chief spokesperson, Pavan Sukhdev, said at Green Week in Brussels this May. Sukhdev is a banker by profession, and played a major role in drafting the report.

The Corporate Role

The UN has faced criticism for its increasingly close ties with big business, ties that many speculate motivate the UN’s advocacy for a market-based approach toward natural resources.

Corporations are indeed closely linked to the main objectives of Rio+20, as global sustainability is rooted in responsible and environmentally ethical business practices. Rio+20 will set the sustainability agenda for the next decade, delineating objectives to achieve corporate sustainability. For example by requiring businesses to prove their ability to address and provide practical solutions to global challenges, while highlighting the business case for supply chain transparency.

The UN Global Compact was set up by Kofi Annan and Nestle’s ex-CEO Helmut Maucher in 2000, to promote voluntary improvements by businesses. It has 7000 member companies that have signed up to ten general principles.

For many NGOs, by promoting voluntary engagement, the compact implies decreased state intervention.

This claim is backed in the days leading up to Rio+20, as the Global Compact and the Rio+20 have organized the Corporate Sustainability Forum, scheduled for 15-18 June, in an attempt to strengthen business contribution to global sustainable development. The Forum is an effort to build consensus on more sustainable practices, to advance and diffuse sustainable innovation and to stimulate collaboration among players within the market. It is expected to have over 2000 participants representing business; investors, governments, local authorities, civil society, and UN entities.

The collaboration between UN and business holds much potential. While the move toward a green economy reliant on private interests is a long way off from now, increased business participation in global sustainability debates does show corporate commitment toward universal systemic change. The Corporate Sustainability Forum demands active demonstration of corporate promises, meaning that its recommendations may potentially become standardized within business structures.

Here, the green economy is seen to be a model that relies on “business to protect the environment.” It remains to be seen if this is a wise decision.