SOCIAL TOPICS (Archive): ENVIRONMENT

Published, November 1997

       by Stephen Viederman

       If we are to take seriously issues of sustainability we must accept the fact that multinational corporations and sustainable development are presently incompatible. This statement is not anti-corporate. Rather it is descriptive, reflecting systemic barriers to change that are endemic to what we define as “economic.” If we do not recognize this incompatibility the only thing that will be sustained is the discussion, not the development.

       Multinational corporations are, by and large, more environmentally sensitive today than they were a decade ago. But there is much more they can and must do to protect and restore the environment which is the basis for all life and for all production. And to do so is not only socially responsible, it is also good for the bottom line. As recent studies demonstrate, improved environmental performance can increase shareholder value.

       However, sustainability is more than development that is environmentally sensitive. It must reaffirm a systemic concern for poverty, equity and the environment.

       Undeniably, corporations are the major force—political, social, environmental, cultural and economic—in the world today. Within the limits imposed upon them by the way we define the economy and by human avarice, corporations are also the major obstacle to achieving some common vision of and action toward a sustainable society.

       Corporations have no commitment to community or place. Though increasingly committed to repairing ecological damage they might create, assuming that is possible, corporations have no comparable commitment nor incentive to repair communities devastated by plant closings and downsizing, or by the introduction of new technologies that destroy the base of an economy.

       Corporations have no commitment to future generations. The next quarter is the attention span of most managers and shareholders, rather than the next quarter century.

       Corporations have no commitment to democracy. They often confuse demography with democracy, creating “demographically correct” community advisory panels answerable only to the company, while claiming a commitment to real dialogue. They discourage participation by stakeholders, both workers and communities, who are often labeled “vocal minorities.”

       Corporations have no commitment to equity. They create and reinforce income disparities that are an anathema to sustainability. Witness the gap between executive salaries and worker salaries: in 1996 CEO pay was 209 times average worker pay, up from 41 times in 1980. And, on average, 230 times more toxic waste was emitted in neighborhoods near the plants of the fifty largest polluters than in the communities of the CEOs responsible for the waste.

       Corporations have no commitment to alleviating poverty. The economists tell us that poverty will disappear as a result of economic growth, but a quintupling of the world’s economy post-World War II has been accompanied by greater rather than less poverty.

       Corporations seek to create greater wants, focusing on “excessities” more than necessities. Greater consumption among the already affluent does not contribute to environmental or social sustainability.

       The Economist reflected recently on the conflict between the market and community: “[A] vibrant market economy [demands] a mobile workforce; ambitious entrepreneurs willing to work all hours for more money; competition; redundancies and work incentives. The requirement for stable communities [are] people who stay in one place, able volunteers with time and energy to devote outside to the commonweal, co-operation, job security and generous welfare safety nets.”

       We cannot have it both ways; we must choose a path. Will multinational corporations continue to be an obstacle, or can they become an ally?

       A sustainable path might be to create a process for rechartering corporations for limited periods of time and for specific democratically determined and socially responsible purposes, as historically they once were.

       Do we have the political will to effectively create change, or will we simply continue to talk in the hope that the problem will go away? Do we fear the current reality so much that we will continue to deny the facts and continue on an unsustainable path? These questions should be at the top of our national agenda. Sadly, they are not even being asked.

Stephen Viederman is President of the Jessie Smith Noyes Foundation, a mid-sized grantmaker that supports individuals and institutions committed to protecting natural systems and ensuring a sustainable society.