The Power — or Not — of Good Intentions

Published February 22, 2014

Ronald Reagan, in a lucid moment, famously characterized his approach to nuclear negotiations with the Soviet Union as: “Trust — and verify.” Much the same, it turns out, might be said for the green boasts of business.

If we’re honest about it, most of what threatens our natural security is the result of our own appetites. Boreal forests are turned into tar pits to push our comfort pods from driveway to the mall. Mountains are crushed to expose the copper and rarer metals that ignite the digital fire in our smartphones. Rivers are emptied to grow our out-of-season salad.

But what if we could have our smart-phones and February salads and cars without any of that destruction? In a nutshell, that’s the aspiration implied by businesses that claim they are operating “sustainably.” It’s a debatable idea in many respects beyond my scope here, but its appeal is evident, and there is at least one way in which it may even be achievable.

Which makes a recent report card on voluntary business sustainability standards covering nearly $32 billion in farm goods ranging from cocoa to cotton, and another report two years ago on retail giant Walmart’s much-covered sustainability goals, salutary reality-checks.

The one area of the human economy that might conceivably be made truly “sustainable” — in the sense of providing for today without depriving tomorrow — is farm production. (A qualification: in principle, the planet can sustainably grow a lot of food, probably enough to feed its present human population; that doesn’t necessarily hold either for our projected future numbers or for everyone to dine like North Americans.)

Nonetheless, it is surely a step in the right direction when farmers, traders and vendors of food and natural fibers set out intentionally to harvest the fruits of the earth in a way the earth can actually sustain. Around the world, more than 400 “consumer-facing eco-labels,” mainly on agricultural goods, represent claims to those products’ sustainable production.

The Winnipeg, Canada, based International Institute for Sustainable Development, along with six other organizations including the Swiss state secretariat for economic affairs, recently examined 16 such “voluntary sustainability standards” for their rigour, adoption, and impact.

All the initiatives develop criteria to distinguish “sustainable” production of the crops they cover, and certify producers that meet those standards. All have some way of confirming that farms and other businesses are meeting their commitments under the standard; the most transparent assign this role to third-party assessors. Some, like the Forest Stewardship Council and Fairtrade International, claim participant businesses in over 100 countries. Altogether, the standards in the study appeared on an estimated $31.6 billion worth of goods traded internationally in 2012.

But this apparent success is relative. The production of “standard-compliant” commodities is soaring: up 41 per cent overall in 2012 compared to the nearly flat 2 per cent growth in commodities generally. Production of “sustainable” palm oil nearly doubled year over year — up 91 per cent; of sugar, up 74 per cent, and of cotton, up 55 per cent.

Much of that growth was from a very low base: even after standard-compliant palm oil production close to doubled, for example, most of the world’s palm oil — an estimated 85 per cent — is exploitively grown. Some standards however are making headway. The study estimated that more than a third of the coffee (38 per cent ) and close to a quarter of the raw cocoa (22 per cent ) sold internationally in 2012 met voluntary environmental and ILO-minimum labour standards—up dramatically from just nine and three percent respectively four years earlier.

In a blow to knee-jerk anti-globalists who condemn international trade for driving a perceived ‘race to the bottom’, the IISD study found that sustainable production was, in fact, “concentrated in more advanced, export-oriented economies” – especially Latin America.

The benefits of such standards go beyond measurable environmental improvements. They also increase equity by inviting voices often missing in buyer/seller transactions along the supply chain, to help determine the new rules. The researchers lauded the inclusion of “non-traditional perspectives” and “remarkable” representation from developing countries.

Voluntary standards can spur investment in green practices and remove environmentally-damaging production methods from the competitive arsenal. Conformity disciplines “are strengthening the reliability of market claims through increasingly independent monitoring and enforcement.”

For all that, few if any “standard-compliant” commodities are factually produced in ways that ensure they will still be available in the future. As the IISD researchers dryly observed, “Accuracy and objectivity [in meeting standards] can be challenged by market forces.” In other words, it’s tempting to cheat.

For that reason, last month’s release urged a stronger role for governments, to back up the adequacy of green production standards and the compliance of producers that claim to meet them. Strictly voluntary standards, the Canadian-led study concluded, “cannot be assumed to deliver sustainable development outcomes.”

An examination of Walmart’s heavily promoted stand-alone sustainability campaign, published in March, 2012, bears that common-sense out. The Arkansas-based collosus had $476 billion in sales in 2013 — roughly 15 times the value of all the commodities traded the previous year bearing one or another of the standards in the IISD study. Were it ever to achieve its stated goals of 100 per cent reliance on renewable energy, zero waste, and fully sustainable merchandise production, it would make a large dent in our ecological overdraft and send a powerful signal of hope to the world economy.

Alas. When the 40-year-old Institute for Local Self-Reliance, based in Washington, DC, put Walmart’s public report on progress toward these goals under the microscope, it found failures quite large enough to lose a blue planet in.

At the rate it’s going, it will take Walmart three more centuries to get all of its power from renewable energy. Despite improvements in efficiency, the retailer’s greenhouse gas emissions are rising. Its constant pressure on suppliers for lower prices means that the goods it sells break or wear out sooner — stuffing landfills and demanding new resources to make replacement products. And Walmart’s signature sprawling supercenters with county-size parking lots continue to pave over wildlife habitat.

It’s perhaps little wonder that as of the publication of that review, Walmart had “made little progress toward its goal of developing a Sustainability Index to rate consumer products.” Market forces, one suspects, were once again challenging accuracy and objectivity.

The temptation to over-promise and under-deliver is ever present for competitive business. Walmart’s selective lens on its own sustainability underscores the wisdom of the IISD’s call for more sturdy government regulation of such claims.

But we also serve who only shop* (or so a later U.S. president patriotically observed), and another conclusion of the latest study points a distressing finger at consumer behaviour as well.

Markets for identified sustainable products “continue to be defined by persistent oversupply,” the IISD found, to the point that between a third and a half of everything produced in compliance with standards is sold as conventional coffee, cocoa or cotton anyway — forcing down prices and undercutting any incentive to invest in green production.

Walmart may be missing its goals to protect future shoppers. It seems many of today’s shoppers don’t care enough to check a label.

Copyright © 2014 Chris Wood


 Notes and further reading:
* With apologies to John Milton (Sonnet 16  —On His Blindness)
State of Sustainability Initiatives Report 2014, IISD, Jan. 2014. (pdf)‎
Walmart’s Greenwash, Institute for Local Self-Reliance, Mar. 2012.