Some of the world’s largest transnational corporations are changing their business models to acknowledge their impact on climate and biodiversity, according to a new paper co-authored by Stanford environmental scientist Eric Lambin. The analysis, published in the journal Nature Ecology & Evolution, indicates a significant shift in corporate values. But accelerating these positive trends will require tougher legislation, according to the researchers.
"Given that large transnational corporations have played a central role in environmental degradation for many decades, they also need to be part of today's quest for solutions," Lambin said. "To create transformation at scale, a major challenge is to ensure that solutions are adopted by entire sectors and not just by the few most progressive companies."
The authors collated evidence from previous studies of the dominance of just a small number of transnational companies in industries such as agriculture, forestry and fisheries. These industries drive overfishing, Amazon deforestation and other environmental change. For example, one hundred companies account for 70 percent of the world's greenhouse gas emissions. Four companies control 84% of the agricultural pesticides market. Ten companies account for 25% of the total paper and board production. And five companies account for 48% of global farmed Atlantic salmon.
The authors identified six observed positive signs of change in corporate values and government legislation towards ‘Corporate Biosphere Stewardship’:
“Sustainability is no longer perceived as a choice among these companies. It is becoming institutionalized and increasingly recognised as a necessity,” said lead author Carl Folke, director of the Beijer Institute for Ecological Economics.
While positive signals can be detected, the authors emphasise that without stronger regulations, voluntary corporate social and environmental responsibility will only drive slow change.
"The big, complex problems humanity is facing today will only be solved through coalitions of public, private and civil society actors," Lambin said.
The researchers also dwell on the risk for market concentration and corporate power to act as roadblocks. Transnational companies have used their power to lobby regulators to weaken environmental and social standards.
“In the face of insufficient environmental agreements and regulations, dominance poses a threat to sustainability. For instance, companies able to set barriers to entry in a sector can stifle sustainable practices and technological innovation in general,” they write.
Global-scale corporate biosphere stewardship they suggest will only be possible if governments provide “a regulatory context that safeguards non-market ecological and social values”.
Lambin is the George and Setsuko Ishiyama Provostial Professor in the Department of Earth System Science within Stanford’s School of Earth, Energy & Environmental Sciences; a senior fellow in the Stanford Woods Institute for the Environment; an affiliate of Stanford’s Center on Food Security and the Environment; and a professor at the Université Catholique de Louvain in Belgium.
The paper was also led by researchers from the Stockholm Resilience Centre of Stockholm University.
This press release adapted from original by Stockholm Resilience Centre of Stockholm University.