Enhancing Global Competitiveness through Sustainable Environmental Stewardship

Citation

Cairns, G. (2013), "Enhancing Global Competitiveness through Sustainable Environmental Stewardship", Critical Perspectives on International Business, Vol. 9 No. 3, pp. 322-325. https://doi.org/10.1108/17422041311330440

This book brings together the papers that were presented at a by‐invitation‐only conference co‐sponsored by the Centers for International Business Education and Research (CIBERs) at seven US universities. 16 contributors – two from Concordia University, Canada and the rest from US institutions – are represented in the diverse collection of papers. The text is structured within three sections, with a Preface by the joint editors that sets the scene. Here, they state that the concept of climate change “is no more a reserve of scientists and political activists”, and that it is “a global problem that requires a global approach to resolve it” (p. xii). As such, they suggest that it has moved from being a “fringe issue” to becoming a strategic concern that requires attention from the highest levels of decision making in multinational enterprises (MNEs). They then posit that, whilst it represents a major concern for MNEs, climate change also offers “huge potential for innovation leading to new products and services” (p. xii) from suitably prepared and motivated MNEs. In addressing the nature of the relationship between MNEs and climate action, this book is directed at a mixed audience, both academics and practitioners. As such, it presents both suggestions for areas of research for international business academics to enhance understanding of climate change issues, impacts and areas for potential engagement, along with pointers to existing frameworks and opportunities for business to enter into active response. It is towards the aim of identifying opportunities rather than constraining factors for MNEs, and to the premise of “enhancing global competitiveness” that the final section of the book is supposedly directed. However, the earlier parts provide a broad and informed debate of the core issue of climate change. Here, the authors are clear on pinning their colours to the mast of serious climate change impacts and calling for radical change, but they also acknowledge and address the climate‐sceptic view.

The first section of the book, on Perspectives on Sustainability, comprises a single paper by co‐editor Subhash C. Jain “Climate change and global business: challenges, opportunities and research guidelines”. Jain acknowledges that the debate about climate change is “highly emotional”, that the scientific evidence is mixed and that the role of multinationals is controversial. He suggests that; since the costs of addressing climate change in terms of the worst‐case scenario are huge, as are the potential dangers from doing nothing, there is a need for consensus amongst global business leaders on whether or not to commit resources to the issue. Jain presents a model (p. 10) in which he posits that effective global response will come from four areas, labelled: multilateral, nation states, business, and people. He sets NGOs behind and linked to the first three as operating in conjunction with each and shows the four frontline areas as interacting with each other. Here, it is worth noting that the papers in this book were brought together in 2011, and on the basis of some optimism that the ending of the Kyoto Protocol would bring about a new and more ambitious climate action agenda based upon greater global cooperation and that would include the USA, Australia, China and India. Looking back from the time of writing in December 2012, we see that the latest climate summit in Doha has brought mixed results and responses. We know that there is no comprehensive and inclusive agreement and that there is no basis as yet for coordinated multilateral action that would prompt or require concerted action by business. However, this lack of inter‐governmental agreement makes this book more rather than less relevant – hopefully leading to change within business education and the business community that will provide added pressure within the political arena.

The second section, Understanding Sustainability Concerns, comprises four papers that offer deeper understandings of the topic. The first chapter, by Shrivastava and Paquin, discusses “sustainable enterprises” and the management challenges that this concept poses over the unfolding century. These authors open with a quote from Lester Brown (p. 35), in which he posits that there is no future place for “business as usual” and that we will be faced either with rapid proactive change, or by the unravelling of civilization through lack of action. From this, they set out the notion that we now live in “the emerging crisis society”, in which we face multiple crises: of environment, including resources and climate; of society; of economy; and of the individual. The first three are probably better represented and discussed in the climate change debate than the last. The “individual crisis” is, however, seen as of great concern in a world in which “individuals with materialistic aspirations and values tend to be less satisfied with their lives” and “more prone to mental disorders” (p. 43). The authors conclude by calling for new ways of “accounting for the full impact of business activity” (p. 48) and new ways of organizing, such that we “find ways to structure business and conceive of business activity to support the long‐term health and success of our economic, environmental and community systems” (p. 52), thereby addressing all of the crises, including that of the individual. In the next chapter, Alexander argues for a change to the “primary filtering” value of our economic system, to move from it being profit maximization to it being environmental sustainability, with the profit motif being interpreted through this filtering mechanism. He posits that such change requires change to legal frameworks that will prompt new forms of leadership and stewardship in the business arena. The remaining chapters in this section develop more focussed discussion on institutional (Kedia, Clampit and Gaffney) and technological (Dowell and Lewis) aspects of sustainability understanding.

The final section of the book, Strategic Approaches to Sustainability, includes a somewhat eclectic range of papers. The first chapter (Levy and Brown) discusses the “Global reporting initiative” in some detail, including its history and application, debates on its effectiveness and its limitations, and its current status within the global accounting arena at a time when it is “appears to be losing momentum” (p. 147). These authors conclude by pointing out that the corporate sector has expressed opposition to mandatory non‐financial reporting, and posit that effective social reporting may not be possible “without a broader mobilization of civil society groups” (p. 149). The next chapter (Marshall, Brown and Plumlee) opens with an overview of the status of mandatory environmental disclosure globally, but then presents a study of measures that impact the nature and quality of disclosure based upon a sample of only US firms. The discussion of issues of institutional ownership, board composition and shareholder activism is therefore limited in scope, but can prompt wider debate in other contexts. The following chapter (Shivarajan) is based upon a single case study – of the “Coca‐Cola controversy” in the Indian state of Kerala. From this, the author conceptualizes a framework for transformation of a stakeholder issue belonging to a single aggrieved group to a social issue through mobilization of a broad stakeholder network. Such networks are proposed as a vehicle for marginalized stakeholder groups to bring their issues to the attention of a wider and more effective body of activists. In the final chapter, Henriques poses the question that, in the form of a statement, provides the title of the entire volume; “How can sustainable environmental stewardship enhance global competitiveness?” This author applies institutional theory to examine a number of hypotheses on the adoption and effectiveness of “environmental management systems” (EMSs) using data from a number of OECD countries, including Canada, USA, France, Germany and Japan. The content of this paper – focussed on data and methods and statistical validity – is probably of more interest and relevance to the academic than the business reader. Personally, I found this the least inspiring and challenging of the contributions. However, I will return to Henriques closing words in my round up, below, since I think that the sense of anticlimax that I felt in reading this closing contribution has probably been felt by many in pondering the reports that have emerged at the conclusion of every climate change summit to date.

Overall, this book presents a well‐researched, informed and compelling argument for the establishment of a new global business order that places short‐term market‐driven interests in a wider environmental context, with sustainability factors dominating business decision making. The editors and authors offer a comprehensive engagement with the climate change issue and a range of possible business responses that are designed to address the broad range of involved and affected stakeholders. The exploration of issues on the basis of multiple theoretical constructs; that include economic analysis, accounting, environmental science and stakeholder theory; provides the opportunity for the individual reader to make sense of the topic from multiple perspectives and provides direction to further reading. However, there are a few areas in which the book appears dated – with the papers originating in an event run in 2009 – and where it might be extended to provide a broader and more inclusive coverage of issues of relevance to specific contexts.

As I write in December 2012, the optimism of the book in relation to possible multilateral collaboration and agreement seems ill‐placed, and the dangers of doing nothing appear to be under‐estimated in light of the emerging evidence. Whilst the book refers to the possibility of an ice‐free Arctic by 2040, recent estimates from Cambridge University say this may happen within the next four years. Also, there are now new climate risks identified beyond the scope of this book, such as permafrost melt. In addition, the text may be criticized as being limited in its attention to specific contexts at high risk from climate change. It is generally acknowledged that countries such as Bangladesh and Vietnam are exposed due to their geography – in relation to both their low‐lying coastlines and their location downstream of areas subject to tropical storms and Himalayan glacial melt run‐off. Also, the countries of Africa are at high risk from multiple climate change impacts. With the focus on global competitiveness of MNEs, it can be argued that the book maintains an exclusiveness and hegemony that needs to be challenged at this crucial time. These issues do not, however, detract from the broad value of the text. With much remaining climate scepticism and international business activity that remains entirely profit‐oriented, there is probably a greater need for this book now than when it was written. In the closing words of Henriques' final chapter (p. 222), “(s)ustainable environmental stewardship is possible but it is only just beginning”.

About the reviewer

George Cairns is co‐founder and former co‐editor of critical perspectives on international business. His current research interests focus on the application of “critical scenario method” (CSM) to so‐called “wicked problems”. For full information on current research interests and publications, see http://rmit.academia.edu/GeorgeCairns