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  • Business diplomacy in global environmental negotiations.

  • By : Amandine Orsini, Université Saint-Louis – Bruxelles

     

    Business is one of the nine major groups recognised by Agenda 21 in 1992, and is therefore a key actor in global environmental politics. There are a number of reasons why business is an interesting actor to study : business proposes solutions, tries to influence decision-making, plays a key role for policy implementation, finances part of global environmental actions, etc. As a result, one does not need to be pro-business and believe in global trade liberalisation to study industries. It can be as relevant to do so when you fight against green washing : you also need to know your enemy. In any case, business is part of the game.

     

    This modest contribution aims at giving basic insights on the way business organises in global environmental negotiations. It first indicates the different facets of business involvement in global environmental negotiations. It then presents the different positions that business is likely to embrace while engaging in environmental politics. Because of the imminence of the 22nd Conference of the Parties to the United Nations Framework Convention on Climate Change (COP22), examples from global climate politics are used as illustrations.

     

    Warming-up on the climate scene…

     

    Identifying business in global environmental negotiations is much more complicated than what it might seem at first sights. Actually, there are a least four different organisational forms that business can take in global environmental politics.

     

    The most obvious, but also the less common one, is for business to appear in negotiations as individual firms. For instance, Ceres Inc. (an American firm specialised in biotechnology) attended the COP21 negotiations. It is by far not the favoured organisational form for business for at least four reasons : (i) one individual voice is less vocal than the voice of an association or federation ; (ii) it gives too direct visibility to the corresponding firm meaning that any faux-pas will cost a lot in terms of reputation ; (iii) being alone does not warrantee a good probability to actually be able to follow all the negotiations ; (iv) material resources are needed to follow international negotiations and very few companies can actually bear the costs of individual participation.

     

    The second, more practiced, organisational form that business actors can take is to group themselves in associations and federations, either corresponding to their sectors of activity (for instance the World Nuclear Association or the Solar Energy Industries Association) or to their geographical origin (for example Business Europe).These associations enable business to have more voice (or at least a voice that is perceived as more legitimate because representing more entities) and to collectivise the costs of participating to international negotiations. The most visible global federation that claims to represent the interests of the business community in climate change negotiations is the International Chamber of Commerce.

     

    The third organisational form that business can take is to participate to negotiations within the umbrella of business non-governmental organisations, also known as BINGOs. These organisations are non-profit organisations that represent the interests of business on current international challenges. In climate change negotiations, the World Business Council for Sustainable Development (WBCSD), the Carbon Capture and Storage Association, or the International Petroleum Industry Environmental Conservation Association (IPIECA) are BINGOs. Business representatives favour this organisational form, as BINGOs are collective enterprises that insist on causes that go beyond economic interests such as environmental protection or human rights. One example of firm that acted through a BINGO during COP21 is Chevron, which did not take part individually to the COP21 negotiations, but registered under the IPIECA.

     

    The fourth organisational form that business can take is to participate within the umbrella of scientific organisations. In climate change negotiations, these organisations, such as the Global Climate Coalition, the Cato Institute, the Heritage foundation, were mostly present at the very beginning, when climate-sceptics were very active. In recent times they become less visible but still attend COPs under the new label of the Competitive Enterprise Institute. Firms can also sometimes register themselves under the names of Universities that develop partnerships with business.

     

    Not only can business take many appearances, but also what often happens is that one same company combines different affiliations. For instance, the French electricity company EDF registered for COP21 under the Foundation for the Global Compact, under the International Emissions Trading Association, under theObservatoire Méditerranéende l’énergie, under the University of Cambridge and under the WBCSD.

     

    The capacity of business groups to multiply affiliations, and to hide behind different federations, depends on the material and organisational resources they have at their disposal. As a result, power discrepancies also exist among the business community. Powerful individual companies can manipulate the positions of federations and force them to carry on their individual messages. The population of business actors is therefore very diverse with small fishes, pilot fishes, sharks, whales, etc. and power relations are important within business lobbies.

     

    Feeling the global business temperature…

     

    Once one identifies business, one needs to understand its political position, driven by its interests. Former studies have, as well, proven that there exists a myriad of potential positioning for business in global environmental politics. One solution to differentiate among them is to place them on a grey to green scale, grey meaning an anti-environmental position and green meaning a pro-active stance on environmental matters.

     

    One part of the business community is likely to be grey, embracing reactionary anti-commitment positions, denying climate change (which is becoming a very complicated rational to support) or the need for drastic action. In the climate change issue, this concerns industries that will encounter high losses if strong mitigation requirements are taken, such as oil companies, car companies or coal industries.

     

    A less hostile position consists in the passive observation of the debates, implicitly accepting their content. Generally, the International Chamber of Commerce follows such positioning. Being a global association indeed means that there is a very high degree of diversity among its members, explaining that its final political position often end up being passive.

     

    Going a little more toward the green dimension of the scale, business can acknowledge and endorse the need for action. In global environmental politics, the WBCSD has traditionally occupied this position, pulling its members towards pro-action for environmental issues.

     

    Finally, an increasing part of the business community sees climate change as a business opportunity, and occupies the green section of the scale. Fighting against climate change is also a business out of which you can make profit. Tertiary companies specialised in carbon auditing or in carbon markets are flourishing. Industries engaged in a more radical change of the world energy mix have also emerged like industries specialised in renewable energy.

     

    Again, things become blurred when business starts placing itself at different levels of the grey-green scale with, for instance, important fossil fuel companies progressively investing in renewable energy or in technological solutions to solve the climate change issue, like carbon capture and storage.

     

     

     

    A climate for business ?

     

    Business lobby actions in global environmental politics do not really differ from the actions of other stakeholders. Every negotiation morning, firms hold a daily business and industry briefing to prepare for the day to come. They can then be involved in international negotiations on different levels, from the most to the less direct one.

     

    First they can participate directly within some national delegations. Some countries indeed include industries in their delegations, as they stand at the core of their economic activities. During COP21, the Saudi Arabian Oil Company had several seats in the Saudi Arabian delegation for instance. Other delegations like to invite stakeholders from different horizons to participate to the national positioning. This is the case of the Swiss delegation that, for COP21, invited, among others, one member of the Swiss Federation of Small and Medium Enterprises, as well as one member of the WWF. While being included in a national delegation is probably the most direct way to influence negotiations, stakeholders benefit from different leeway from one delegation to the other.

     

    Second, business representatives can register as observers and lobby during the negotiations. For instance, observers can take the floor to express their views when all states have already expressed theirs. Observers can also circulate documents outside the negotiation rooms and interact with other participants. Because of the increasing number of observers in climate change negotiations, stakeholders have now to ask for the observer status well in advance, before the negotiations starts.

     

    Third, business representatives can organise side-events that often take place over lunchtime for negotiators and observers. Side events are a good official opportunity for stakeholders to present their most recent views and progresses towards tackling the environmental issue at hand.

     

    Fourth, they can organise cocktails during evening time. This is particularly useful to network with other stakeholders and delegates.

     

    Fifth, industries can sponsor COP meetings, therefore gaining visibility and legitimacy. COP21 had an important number of sponsors from the private sector.

     

    Again, because of the diversity of formats and positions of firms it is extremely difficult to say if business can actually influence global environmental negotiations. The International Chamber of Commerce is aware of the discrepancies that exist among companies and recently started to propose negotiation guides, for instance the ICC negotiation guide for COP21, to help smaller “business fishes” to navigate through the negotiations.

     

    What detailed studies of global environmental negotiations have shown so far is that it is hard to establish direct evidences of business having an influence on global environmental negotiations. When aState is reluctant to engage in global environmental politics, it is not necessarily a sign of industrial pressures. More often than not, States declare : “we want this because industry thinks it is the right thing” while what is actually verified is : “we want this and industry things it is the right thing”. For governments, using the business card is often strategic to advance positions that are not necessarily popular.

     

    Having said that, it is important to keep in mind that the influence of business in global environmental negotiations is also seen from the number of issues that are not tackled during international conferences. In the climate change negotiations, this is the case of the fossil fuel subsidies’ issue. While fossil fuel subsidies are common practice in international politics, and are highly problematic with regards to climate change because they favour the use of dirty energy, they are barely dealt with during climate conferences. Solutions like the reduction of these subsidies or even their disappearance have never been envisaged in climate COPs negotiations. In a similar vein, several experimental technologies that appear on the COPs agendas (carbon capture, carbon storage) still have to make their proofs, while no clear studies have been presented so far that really demonstrate their use for the environmental issue at hand. In that case, the actually efficiency of such techniques is denied access to the climate change negotiations agenda. These agenda denials are probably not the only fate of business actors but these are likely to benefit from these denials.

     

    References and further reading :

    Fisher, Dana R. 2010. COP-15 in Copenhagen : How the Merging of Movements Left Civil Society Out in the Cold, Global Environmental Politics, 10(2) : 11-17.

     

    Hanegraaff, Marcel. 2015. Transnational Advocacy over Time : Business and NGO Mobilization at UN Climate Summits. Global Environmental Politics, 15(1) : 83-104.

     

    Rietig, Katharina. 2016. The Power of Strategy : Environmental NGO Influence in International Climate Negotiations, Global Governance : A Review of Multilateralism and International Organizations, 22(2) : 268-288.

     

    Vormedal, Irja. 2008. The Influence of Business and Industry NGOs in the Negotiation of the Kyoto Mechanisms : the Case of Carbon Capture and Storage in the CDM, Global Environmental Politics, 8(4) : 36-65.