How can international corporations like Unilever, Ikea and Nestlé place highly on a list of the most sustainable companies in the world? Could a study that champions the environmental merits of business behemoths like Patagonia, Marks & Spencer, GE, BASF, Nike, Coca-Cola and Walmart really be credible?
The list in question, the"Sustainability Leaders Report," is prepared annually by the US-British think tank, SustainAbility, and Canadian research company, GlobeScan. It’s based on a survey of over 800 sustainability experts from the public and private sectors, as well as media, from 80 countries;* who are asked to evaluate the progress various institutions have made since Earth Summit in Rio in 1992, while ranking NGOs, governments and multilateral organizations and corporations.
An Ikea store in Gwangmyeong, south of Seoul, South Korea, on December 18, 2014. JUNG... [+]
The aim is also to indicate which companies are leading the world in implementing sustainable development in business strategy. What does that mean? Ideally, producing products with the least damage to the environment, consuming as little resources as possible and recycling—all without harming local communities.
So how could scientists, specialists and NGOs find merit in the activities of large companies like Coca-Cola, a producer of many unhealthy drinks; Ikea, accused of cutting down virgin forest in Russia; or BASF, the manufacturer of bee-killing pesticides?
Unilever topped the ranking probably because its president, Paul Polman, for the past few years, has worked to convince investors that the latest goal of the company is to switch to zero-emission production and to use sustainable crops, which may adversely affect the company's costs. These declarations are generally sincere, but contain hidden traps that cause investors to be skeptical.
Both Nestlé and Unilever publicly promised they would buy an essential component of all confections - palm oil - using only certified sources. But the certification scheme has no significant impact on either the protection of endangered Indonesian forests, or on consumers’ consciousness. In practice, no certificate guarantees that the raw material is harvested on plantations which have not destroyed the rainforest or valuable areas.
Nowadays, the scale of global production is simply not possible without violating local ecosystems, or the working against the interests of residents. Such is the conclusion of Nobel Prize winning economist Joseph E. Stiglitz. In his famous “Globalization and Its Discontents,” he points out that multinational corporations compete and win thanks to lowering their costs—getting even richer than some national governments. Giants like General Motors, whose annual income surpasses the GDP of over 100 countries combined, or Wal-Mart, which earns more than all sub-Saharan Africa, will always find places to set up shop where they can call the shots. If they followed the model proposed by the SustainAbility think tank, profitability would be hurt, which is anathema to big business.
So even if large multinationals do take small steps to reduce the harm brought on by their own output, it’s unconscionable for them to change their general business model in a way that would make a real impact on sustainability. The small steps they do make, it would appear, are good enough to earn a very public pat on the back from SustainAbility and its “Leaders Report.”
*Correction: The initial iteration of this post described the Sustainability Leaders Report as based on "a survey of experts from the World Wildlife Foundation, Greenpeace, United Nations, Oxfam and Carbon Disclosure Project..."
