Business is running ahead of most politicians when it comes to planning for a sustainable future. It’s time for government to catch-up.
Here’s a strange thing. Business is increasingly calling on government to intervene in the free market economy, while politicians are reluctant to act. Not so long ago, it used to be the other way round.
In fact, business is now ahead of government in forward thinking; seeing what all stakeholders expect (not just investors); researching the best way to achieve sustainability, and investing to get there.
That’s quite a change from the stereotypical view that business is the short-term profit maximiser, while government sees the bigger picture and makes wise decisions for the long term good of all.
Of course, not all business is like this. But consider the Confederation of British Industry (CBI) in the UK praising the growth of the ‘green economy’ and calling for more public infrastructure investment. Or the leading businesses calling for a decarbonisation target in the current Energy Bill and for a strengthening of the EU Emissions Trading Scheme.
Contrast that with the UK Government – or at least the branch represented by the Chancellor of the Exchequer, who loses no time in decrying “wasteful” renewable investments, preferring a ‘dash for gas’.
In the US, climate change hardly featured in November’s elections. True, President Obama has been mentioning it again, most recently in his State of the Union address. However, without a popular mandate, there is little prospect of getting any measures through a hostile Congress. Meanwhile business pushes ahead with its investments, Warren Buffet among them.
Around the world, thoughtful businesses are calling for a stable and clear price for carbon, to encourage commitments they know are necessary. They are mapping their entire value chains to identify and eliminate cost in the form of wasted energy and inefficient resource use. They are thinking ahead to plan for a world where populations have grown, water is scarce and resources are expensive.
It’s time for thoughtful government to join them. So I have been collaborating on a book, looking at what public policy makers should do to catch up.
Out in March, it calls for a modernised economy, based on low carbon energy, and zero waste production and consumption cycles. It advocates an expanded role for the Green Investment Bank, to lead a programme of public infrastructure investment. It says citizens need help to live more sustainable lifestyles, helped to make those choices by much tougher energy efficiency standards. Governments should not be afraid to regulate in ways that help business to make the investments needed for their long term survival and our prosperity. It calls for a reform of government’s own decision making systems, to build in long term planning.
What is overwhelmingly clear from our research is that business needs government to act. “Go it alone” on sustainability is no more successful ultimately than “get government off our backs” was on the regulation of financial services. A green economy needs a green society.
