RIO+20 and the greenwashing of the global economy

13 January 2012

Challenging the corporate co-option of the UN should be a major priority in the run-up to the UN Rio+20 Earth Summit in June 2012.

In less than six months, the UN summit in Rio de Janeiro will take place ( 20-22 June 2012), twenty years after the historic Earth Summit. That summit despite its shortcomings resulted in governments making commitments that later led to UN treaties on climate, biodiversity, etc. While expectations are low this time in terms of concrete outcomes emerging from Rio+20, there is no doubt it will be a crucial event for determining the level of ambition and the likely direction of inter-governmental policies to tackle the environment and development crisis. Rio+20 is set to be a very important ideological battleground.

The goal of the summit is to assess progress made since the Earth Summit as well as address new challenges. On the agenda will be institutional reform of governance on global environment issues, which could lead to strengthening of UNEP (the French government’s proposal for a World Environment Organisation is not going to happen). The most intense discussion in the preparatory process is around the ‘Green Economy’ agenda promoted by UNEP, a concept that could replace ‘sustainable development’ as the dominant discourse.

UNEP launched a 700 page ‘Green Economy’ report (GER) in February 2011, resulting in a lot of media coverage. The report argued that the environment can be saved and faster growth achieved if governments cut environmentally damaging subsidies (fossil fuels, fisheries, etc.) and use these funds to invest in new technologies. Massive investment could enable the transition from the ‘brown’ to the ‘green’ economy, the report argued. The report has been criticised heavily by non-governmental organisations (NGOs) because it ignores the deeper causes of the ecological crisis and because of its emphasis on economic growth, technology and market-based approaches. This emphasis may not be surprising considering the strong role of investment banker Pavan Sukdhev in drafting the report. Sukdhev, who was also the report's chief spokesperson, is on a sabbatical from Deutsche Bank (one of the world’s largest derivatives traders.

The focus on technologies is problematic because of the types of controversial new technologies that are promoted, including biomass incineration, synthetic biology, nanotechnology, etc. Nuclear and GMOs are not explicitly endorsed, but would fit with the approach.

The market-based approach promoted by Sukdhev assumes that nature should be precisely measured and valued, according to the ‘services’ it provides (cleaning water, capturing carbon and so on). This way nature's services can be costed, offset and traded on markets, via credits, similar to carbon trading. Giving nature a monetary value or putting a price tag on it, is the best way to protect it, UNEP argues. UNEP presented this approach in detail at the end of 2010 with the report “The Economics of Ecosystems & Biodiversity” (TEEB). That report, presented at the UN biodiversity summit in Nagoya, Japan, also had Sukdhev as lead author. Mr. Sukdhev is also a board member of Conservation International.

The approach has been heavily criticised by NGOs as it would mean assigning private property rights to nature, commodifying and privatising nature. Leaving nature to the market would undermine the opportunities of communities and states to protect the commons. Also the bitter lessons from the carbon trading debacle seem to be entirely ignored when UNEP proposes tradeable biodiversity credits. The UNEP reports exposes a misguided belief in markets, which is astonishing after the financial crisis. It is as if that example of the chronic failure of deregulation and market-based approaches had never happened.

Mr. Sukdhev is not just popular with UNEP; he also has a big fan base in the  European Commission and among several European governments. Sukdhev spoke at Green Week in Brussels in May 2011. The EU environment Commissioner Potocnik summed up the thinking by many EU officials when he said: “We need to move from protecting the environment from business to using business to protect the environment”. The Green Economy Report, not surprisingly, also has the support of the World Bank and the World Trade Organisation (WTO).

Why is the UNEP's concept of “Green Economy” so popular at the EU Commission? Firstly it fits hands in glove with the Global Europe strategy of trade talks (for accessing new markets and raw materials) and the Europe 2020 strategy of neoliberal reforms inside Europe. Secondly the biodiversity credit trading is an extension of the market-based climate policies that the EU has so deeply committed itself to and invested in.

The Green Economy Report does have many common sense elements, like phasing out environmentally damaging subsidies, but overall it is flawed. At the last session of the UN’s Commission for Sustainable Development (CSD)there was strong civil society resistance, but also considerable criticism from the predominantly developing G77 countries. They are worried the ‘Green Economy’ discourse will replace the previous 1992 approach that emphasised sustainable development and analysis of consumption and production patterns, concepts which include a focus on north-south inequality. Some of G77's members critiques are based on regressive motives (for example by its OPEC members who are unhappy with promotion of renewables), but much of the critique is justified.

The Green Economy approach, with its focus on growth, techno fixes and marketisation of nature, is the extreme opposite of the vision of the Bolivian government, which together with some other Latin American governments have put forward an alternative vision based on humans living in harmony with nature and nature having constitutional rights. Some observers predict this clash will intensify, perhaps leading to a north-south conflict at Rio+20 similar to COP16 in Copenhagen.

UNEP has worked extremely closely with industry on the Green Economy agenda and the Rio+20 preparations. In April UNEP co-hosted the “UNEP Business and Industry Global Dialogue” in Paris, attended by 200 business representatives. The co-host was the International Chamber of Commerce (ICC), an industry lobby group. In addition to the discussion at the Paris conference, the ICC has also submitted detailed comments on the Green Economy Report. The ICC was overall pleased with the report, but insists in keeping definitions of which investment are considered ‘green’ very broad and not excluding any technology (i.e. nuclear and biotech). The main critique was that the emphasis on renewables was considered too strong. The ICC response was drafted by a working group including representatives of ExxonMobil, Shell, RBS, Monsanto, BASF and Suez, all of which have a highly controversial environmental record.

Among the key note speakers at the Paris conference was Chad Holliday, who leads Business Action for Sustainable Development 2012 (BASD 2012), the main vehicle for corporate campaigning towards Rio+20. Chad Holliday is Chairman of Bank of America and former Chief Executive Officer of Dupont. The BASD wants to lobby but also to “demonstrate the achievements” of business in terms of sustainable development and “ensure that business is recognised as a solutions provider”.

The BASD campaign for Rio+20 is likely to be similar to what happened ten years ago with the first BASD campaign, focusing on Rio+10 in Johannesburg (September 2002).

Rio+10 was described by the then head of UNEP as “the world’s biggest trade fair”. Over 100 CEOs of large companies attended, along with 600 other big business delegates. They attended to lobby and also put on big displays of greenwash activities, through billboards across Johannesburg, glossy reports, exhibitions and events. In the convention centre BMW had a ‘Sustainability Bubble’ showcasing its hydrogen-powered cars, as if this was the future the company had in mind (Four to five years later BMW was central in campaigning against stricter CO2 limits for large petrol-guzzling cars). The central message was that business was voluntarily acting to solve environmental challenges and that government rules were not needed. Industry explicitly saw this as “a way to sidestep government intervention and regulation”. Shell, Suez, TEPCO and many other firms presented isolated examples of business initiatives that say nothing about the overall record and impact of these companies. This was very effective greenwash. It was deceptive, but it worked.

The impact of this strategy was even more effective because Rio+10 had a strong focus on partnerships, between industry and NGOs, industry and governments and industry and UN agencies. These partnerships were considered ‘Type-2 summit outcomes’ and given official UN recognition.

Rio+10 exposed a relationship between the UN and big business that had dramatically changed, from a critical, arms-length distance to partnership and increasingly co-option. This had started five years earlier, with then UN Secretary-General Kofi Annan playing an active role. Annan at Rio+10 called for business to embrace more public-private partnerships arguing: “If we don’t we are going to be under pressure and governments can then introduce laws that are not necessary”. Not accidentally this happened at a time when there was a strong critique of the model of globalisation which had led to the massive expansion of powers and intense economic domination by large corporations. For the UN, embracing big business was also a way to overcome increasingly sceptical northern governments, including an US government that threatened to withhold funding for the UN.

Since Rio+10 this approach has continued and there is a worrying degree of corporation cooption, if not capture, of key UN agencies. One way this happens is through partnerships, such as those showcased on www.business.un.org

Many multinational firms have five to ten partnerships each with UN agencies, for instance:

  • Shell and UNEP on biodiversity
  • Coca Cola and the UNDP on water resource protection
  • Nestle and UNDP on empowering rural communities
  • BASF, Coca Cola and UN-Habitat on sustainable urbanisation

The problem with such partnerships is that they lead to conflicts of interest, because the companies have commercial goals whereas the UN agencies must pursue social and environmental policy goals. There is a serious risk of regulatory capture as it becomes increasingly difficult for the UN to criticise its business partners and fulfill its regulatory role.

Perhaps the most problematic of all is the Global Compact, set up by Kofi Annan and Nestle’s then CEO Helmut Maucher in 2000. The Global Compact promotes voluntary improvements by businesses. Over 7000 companies have joined, signing up to ten general principles. The Global Compact is very popular because they can align themselves with the UN whereas it lacks effective verifications and sanctions. The companies basically get a free lunch! The UN’s Inspection Unit criticised the Global Compact in strong wording earlier this year, concluding that:

  • companies use the Global Compact for bluewash, as a marketing tool
  • it is questionable if the Global Compact leads to any real change in corporate behaviour
  • the Global Compact office has a self-expanding mandate

An example of this self-expanding mandate, I would argue, is that the Global Compact is now one of three main partners in Business Action for Sustainable Development 2012 (BASD 2012), with the ICC and the World Business Council for Sustainable Development (WBCSD). As the Global Compact is a UN office, it seems absurd that it is an active part of the primary corporate lobbying campaign towards Rio+20. The boundaries between UN and big business are increasingly blurred.

Big business has made major inroads into the UN system. There is an increasing emphasis on markets and business as a solution to environmental problems. On this basis it is perhaps not surprising that business lobbies are now demanding a much stronger, deeper and more formal roles in UN environmental decision-making. These demands have been voiced most clearly in the context of the UN climate talks and some of this was already implemented in the run-up to the Cancun climate summit.

Challenging the corporate co-option of the UN should be a major priority in the run-up to Rio+20.

About the authors

Olivier Hoedeman

Olivier Hoedeman (Dutch/Danish, MA Political Science), is the research and campaign co-ordinator at Corporate Europe Observatory (CEO), an Brussels-based civil society group targeting the threats to democracy, equity, social justice and the environment posed by the economic and political power of corporations and their lobby groups. CEO co-organises the water project with TNI.

Recent publications from Environmental Justice

The Emerging Economies and Climate Change

The BASIC bloc of countries in UN negotiations have too often ended up collaborating and colluding with the inaction of industrialised countries, undermining the future of the poor in their own countries and throughout the South.

No fracking way

A briefing that explores how a trade agreement currently being negotiated between the US and the EU could open the way to multi-billion euro lawsuits from companies wanting to expand “fracking” for shale gas and oil.

COP19 Guide to Corporate Lobbying

At a time when genuine progress towards real climate action is more vital than ever, this guide exposes how the corporations most responsible for climate change have taken over this year’s UN climate talks.

Beyond Development

Latin America is at the forefront of thinking on how to build a new sustainable economy that rejects consumerism and extractivism. An exciting compilation on new ideas such as Buen Vivir that are reshaping the global debate on how to live in harmony with each other and nature.