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close this bookPartners in Time? Business, NGOs and Sustainable Development (UNRISD, 1999, 85 p.)
close this folderPart 2: Toward civil regulation
View the documentIntroduction
View the documentThe Political Dimensions of Corporate Environmentalism
View the documentNGOs and the Politics of Pressure in a Globalizing Economy
View the documentFrom Producer Politics to Consumer Politics
View the documentBeyond Legal Versus Self-Compliance
Open this folder and view contentsThe Case for Civil Regulation
View the documentThe Potential of Civil Regulation for the South
Open this folder and view contentsGovernmental Policy Frameworks for Civil Regulation

The Political Dimensions of Corporate Environmentalism

The Gramscian concept of hegemony is one theoretical framework which can be used to analyse the politics of corporate environmentalism. Antonio Gramsci (1988) argued that in most societies there is a coalition of groups that dominates social, political and economic expression. This coalition of business, government, professional and intellectual elites is interested in protecting the status quo and is therefore constantly managing and incorporating opposition to its “hegemonic control”. Accordingly, if levels of environmental degradation become socially unacceptable and engender civil protest, then industry and other hegemonic groups must respond to maintain confidence in the current political-economic system.

Employing this framework David Levy (1997) argues that most environmental management is an exercise in political, not environmental, sustainability. Levy draws upon evidence that much environmental management cannot be explained on a purely financial basis. Rather, environmental initiatives, projects and codes of conduct go further than narrow eco-efficiencies and therefore have a strong stakeholder relations - or political - element. This is environmental management as corporate responsibility. For example, environmental consultants at McKinsey and Co., believe “win-win situations... are very rare and will likely be overshadowed by the total cost of a company’s environmental program” (Walley and Whitehead, 1994:46). In addition, research in a Northern context shows that corporate environmentalism is primarily motivated by regulatory and public pressure rather than opportunities for financial savings, competitive advantage or green premiums (Ashford, 1993; Dillon and Fischer, 1992; Rappaport and Flaherty, 1992).

The industry response to tropical deforestation described in part 1 demonstrates a political motivation for corporate environmentalism. Although there is a strong business case for ensuring future supplies of timber, and therefore the conservation of productive forests, the commercial pressures posed by NGOs, such as boycotts, were more immediate and therefore more significant.

Similarly, developments in the oil industry suggest that the political motivation for environmental management is becoming more widely recognized by company managers. Since the Brent Spar and Nigeria episodes, Shell’s president wants the company to replace its “technological arrogance” with a more co-operative approach, which recognizes that environmental issues are “social and political dilemmas” with “a range of possible answers” (Herkstr, 1996:9). Similarly the chairman of BP now believes that society’s concern about global warming provides enough justification for action, even though there may be ongoing scientific disagreements about its causes and consequences (Browne, 1997). Whereas in the past a faith in science and certainty governed business decisions, the emerging approach of senior management in oil, timber and other international companies is to put people in the centre of the debate and therefore acknowledge the political nature of corporate environmentalism.

This political dimension to environmental management is reflected in the emerging emphasis on stakeholder management and the concept of social capital. The theory of stakeholder management says that companies can only succeed if they pay attention to all those who affect or are affected by the company’s operations. This includes customers, staff, shareholders, suppliers, interest groups, local communities and regulators. Depending on the scale and impact of the business, even the entire population of planet Earth may be seen as stakeholders in a company (Wheeler and Sillanpaa, 1997).

Whether it is the primary purpose of a business to satisfy its stakeholders or only to do this in order to maintain dividends for shareholders is widely disputed. Supporters of the former position generally recognize the importance of social capital - a valuation put on the business benefits of “stakeholder management”, such as trust and motivation. Francis Fukuyama (1995) believes the economic value of trust is considerable and should be valued in the same way as other capital assets. Social capital is therefore a valuation of the ability of people in groups and organizations to work together for common purposes.

Many individuals involved in the business-NGO partnerships described earlier champion stakeholder consultation as a sound way of finding socially acceptable solutions to sustainable development issues and, therefore, of protecting social capital. Senior managers from wood product retailers have committed their companies to meeting targets and implementing policies largely defined by WWF-UK. Executives at both Shell and BP have sought political and technical advice from many of their critics in their efforts to revise company policies and operational guidelines.

Many of the participants in business-NGO partnerships are known to the authors personally, and we can say that a fresh sense of purpose and optimism surrounds their partnership activities. However, stepping back from the specific initiatives, some commentators voice a concern with the political implications of what is occurring. From the Gramscian perspective mentioned earlier, Levy (1997) argues that the political nature of corporate environmentalism is worrisome. The concern is that political expediency rather than environmental necessity determines environmental management. This produces a business-first attitude to environmental and social problems, which often undermines more fundamental approaches to environmental sustainability:

[Corporate environmentalism] can be understood as an integrated response on the practical and ideological levels that serves to deflect more radical challenges to the hegemonic coalition (Levy 1997:127).

The deflection of more radical approaches to environmental management is an issue that is addressed by Richard Welford (1997). “Eco-modernism”, he argues, is becoming the dominant industry discourse on the environment, and it treats the environment as another technological problem to be overcome in the pursuit of progress. To the eco-modernist, pollution is an economic opportunity for prevention and clean-up technologies and certainly not an indication of fundamental problems with the current economic system.

Levy and Welford may take different approaches, but they arrive at the same conclusion - that corporate environmentalism embodies a strong political element. Levy believes environmental management to be an overtly political process, as most companies actively go beyond eco-efficiency and deal with community and stakeholder issues. Welford believes environmental management’s narrow focus on eco-efficiency marginalizes more comprehensive and ambitious sustainability management approaches.

We agree that environmental management is becoming a more political process, but not only because of business attempts at better stakeholder relations or because more radical discourses are being undermined. We believe that civil society organizations are also playing significant roles in promoting environmental and social management (Murphy and Bendell, 1997). The evidence of anti-logging, anti-oil and anti-child labour protests illustrates that NGOs are increasingly setting the political agenda within which business must work. The challenge is therefore to seize the opportunities afforded by corporate environmental politics, not lament its existence. The next section describes the ways in which NGOs are playing this increasingly political role.