Leaders from two hundred nations came together this week in Durban, South Africa, for the 17th annual United Nations Framework Convention on Climate Change. The Kyoto Protocol – the climate change pact, which has been the most comprehensive agreement to date – is due to expire next year, and it has to be replaced by a new agreement.
Much debate and negotiations are currently under way at the conference. International leaders are trying to reach consensus on what further commitments need to be made in order to avert a global environmental catastrophe in the future. Many view this debate, and the new protocol that will be agreed upon (if any), as the most effective way to hold polluters accountable for their emissions, while forcing them to take action to reduce them. No wonder the world is anxiously waiting.
In the meantime, voluntary green investments are showing no signs of losing momentum. More and more companies are putting their environmental consciousness on display. In a time of tight markets and stiffer competition, they have no other choice. And the force that drives them to use green investments to differentiate themselves is highly overlooked, but very influential – His Highness the Consumer.
The fact that environmental initiatives are a powerful marketing tool is no secret. One example, as a recent article in the Financial Times pointed out, is the European oil company Shell, which launched a multi-billion dollar biofuel joint venture in Brazil. The new company is expected to become one the biggest ethanol producers in the world. FT’s list of corporate green-thusiasts also includes BP, which signed a $750 million deal that will expand its U.S. wind farm projects; HSBC, which vowed to refrain from financing polluting power plants fueled with coal fire; and two popular beverage brands, which are both striving to outshine each other in the use of plant-based materials for manufacturing of lightweight bottles.
Among the above-mentioned examples, the rivalry between the two popular beverage companies is most illustrative of how consumer needs and interests dictate the way companies utilise green investments to win more business. Historically, both beverage companies have actively gone after consumer attention using an arsenal of ad tools — from celebs, to holiday campaigns, to sports events, to healthier products. Now green seems like the obvious choice. And it’s fair game if it bears larger environmental and social benefits.
An article in The Times, in the UK, this week reflected on the ongoing Durban summit, claiming that “at the UN, environmental woes cannot compete with economic ones” and, therefore, expectations for a global environmental deal have never been lower. That, unfortunately, might just be the harsh truth that some parties don’t want to hear.
Countries on the brink of economic collapse have more reasons today to say “no” to compliance than they had in Cancun last year and in Copenhagen the year before. That is why looking to international agreements as a stimulus for companies to turn to more environmental practices is not the best way to cope with climate change at this time.
As many polluters have already realised, when it comes to going green, the focus needs to shift from passively waiting for direction from the government to actively winning over the consumer. After all, the key to keeping the economic wheel turning is the customer’s cash. And this key is in consumers’ hands and pockets. Therefore, companies have an interest in keeping their green money churning and their innovative initiatives going if they want to stand out and be seen.
We don’t dismiss the value of international agreement by any means. These pacts are important as they keep nations formally accountable for their actions. They represent the collective intention to merge forces and work together, so no single nation feels that its efforts are an island in the carbon sea. But these international agreements, or lack thereof, should not be viewed as more powerful than voluntary corporate responsibility. A lasting climate change solution lies in polluters’ willingness and ability to effectively employ environmental initiatives on their own terms and strive for eco-innovations that meet customers’ needs.
We need to leave international leaders to focus on solving the global economic crisis, at least for now. Ending the global climate crisis, on the other hand, is a matter of increased sense of individual responsibility among polluters and a growing number of voluntary green investments.
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