Our Environment: Promise and profit

Minister of the Environment Thorbjørn Berntsen

Our environment: Promise and profit

New York, 11 October 1995.

Your Majesty and distinguished guests,

Our main theme today of «PROMISE AND PROFIT» highlights the importance of looking at our environmental challenges in a spirit of optimism. They provide new opportunities for modern companies, looking for opportunities to do well and do good at the same time.
The organizers of this conference clearly recognize the crucial importance of having the business community adopt the fundamental goals for sustainable development. The essential requirement for progress is that government, business and industry cooperate in setting clear goals and practical strategies for achieving them.

We already see remarkable signs of commitment by industry to the interlinked goals of environmental protection for sustainable development. There are already many extraordinary examples of what can be achieved when the creative and management resources are mobilized in the private sector.

What we need and are moving toward is nothing less than a new way of thinking.To put in other words: «BUSINESS AS USUAL IS NOT A SUSTAINABLE OPTION». Development that is economically, socially and environmentally sustainable is not a state of affairs but a new way of thinking about and approaching our interdependent world and our common future.

Sustaining or mortgagin our common future?

The crucial question and issue today is whether we are sustaining or mortgaging our common future. As countries, companies and individuals, how we view and use our environment and natural resource assets is crucial for our own future and for later generations. In the last few decades, unsustainable production and consumption patterns in the North and expanding population and poverty in the South have combined to test and increasingly exceed the capacity of nature and our critical life-supporting ecosystems.

Nature is no longer inexhaustible. We always knew there were clear limits for non-renewable resources such as oil, coal and other fossil fuels. Now we recognize there are limits even for our renewable resources. Over-use and pollution are threatening to exceed the regeneration capacity for our water, forests and topsoil. The ozone layer, our climate and many wildlife species are also now at risk.

Nature is like a bank account: Do we live on our interest or capital? To put it bluntly, our generation has lived off our natural capital for too long. Our equity has shrunk and we risk passing on a heavy mortgage and environmental debt burden to our children and future generations. With so many other pressing problems we often try to ignore or forget this. Our children and grandchildren won’t. This is not fair to nature, to other species or to future generations, It also isn’t necesary.

Sustaining our common future

For individuals, companies and countries, being «green» no longer means being «lean» in terms of our quality of life, the profitability of our enterprises or our national Gross Domestic Product. Key guidelines for sustaining Our Common Future include:

• Moving from expensive «react-and-cure» approaches to more effective «anticipate-and-prevent» strategies.
• Moving from making nature or future generations pay to making «polluters pay» and incorporating the real ecological costs of production in prices.
• Moving from purely regulatory measures to expanded economic incentives for business and consumers.
• Moving from «add-on» to «build-in» technologies, from pollution abatement to more efficient and cleaner technologies.
• Moving from waste to ecoefficiency over the life cycle of products..
• And, last but most importantly, moving within and among all countries from combat to partnership among governments, business, industry and public interest groups.

In sum, the growth of a company or of the national or world economy is not at issue. Growth is needed at all levels. What is at issue is the kind and content of that growth and how we share it. Future growth must be more equitable, less polluting and more efficient in the use of energy and natural resources.

Tackling the challenges of sustainable development

My first message is therefore that the environmental problems are real and that we face the unprecedented task of turning the world around. The management of change is already the main characteristic and survival skill of successful companies. We will need all the talent in the public and private sectors to manage the new process of change we all face. We need to develop new economic instruments as well as legal measures to reflect the scale and complexity of our environmental challenges. We are confronted by many environmental issues which do not yet have clear scientific answers. To overreact to them could be dangerous and expensive. To ignore them would be irresponsible.

Improving the environment is not a marginal activity to be pursued only when we have enough time and money. We cannot afford to wait because time is critical. I am convinced that most of the critical environmental challenges will either be won or lost in the next 10 years. None of us can afford to be on anything except the winning team.

From compliance to leadership in the private sector

My second message is that the private sector must play a major role in the process of change. The business community has the resources and management skills. In Government we will develop the overall policy framework within which to operate, keeping always in mind the overriding need for a «level playing field». Business leaders reasonably expect from government a predictable legal framework as well as stable economic and social conditions to facilitate investment planning. What is also needed now is for business and industry to raise the ambition level and move from mere compliance to vigorous leadership. Defending the STATUS-QUO is no longer a viable option.

The business community, especially in this country, also has the tradition and the infrastructure to operate internationally. While governments must rely on time consuming negotiations to strengthen the international framework for action, industry already has the global decision-making machinery to act much more quickly and effectively . Both governments and industry need to put more emphasis on longer term strategies. Industry often criticizes political leaders for having a time horizon which often stops at the next election. Yet industry itself is often too preoccupied with quarterly earnings. We therefore share a common imperative: The need to survive today in order to reach tomorrow. We also share a common and dangerous flaw: Our time horizons are far too short.

The fundamental problem of giving priority to tomorrow’s challenges raises a number of intriguing issues. For instance, are current economic models and management practices adequate for addressing the challenge of limits to our present patterns of production and consumption?

Recent history has highlighted the advantages of the market system over other economic systems. The market should find the most efficient methods for creating wealth and offers better chances for progress by unleashing human creativity. It offers society effective paths towards its goals. But society through the legislative process must set those goals. Bureaucratic socialism collapsed because it did not allow prices to tell the economic truth. But the MARKET ECONOMY may ruin the environment and ultimately itself if prices are not allowed to tell the ecological truth.

Moving toward sustainable development

We are all familiar with the classical definition of sustainable development: «Progress which meet the needs of the present without compromising the ability of future generations to meet their needs» I will suggest a somewhat expanded definition. Sustainability is not a fixed state of harmony but rather a continuing process of change in which the exploitation of resources, the direction of investments, the orientation of technological development and institutional change are made consistent with future as well as present needs, - and with the limits of nature.

My vision of a sustainable society is a rather attractive scenario. A sustainable society should not be stagnant, boring, fixed or unadaptive. It should not be rigidly or centrally controlled or be uniform, undiverse or undemocratic. It should be a world where we take the time and resources to avoid and correct mistakes, to innovate and develop without exceeding the regenerating and carrying capacity of our environment, and where wealth is shared not according to our greed but according to our needs.

Managing risk

My third message is that the approach to be pursued by industry is to improve RISK MANAGEMENT. As used in industry, «risk management» comes close to an operational version of the precautionary principle now included in international conventions. For example, the insurance industry has taken practical steps in response to the threat of climate change and already moved further than many governments. This is an effective example of how industry can and does respond to our environmental risks and challenges.

So the risks are identified. Managing the risks is the challenge. It would be unfair to the substantial efforts already made for environmental improvement to paint the picture too black. Industry’s clean-up efforts are impressive. Many traditional pollution problems have been tackled effectively. In Norway we are quite proud of the environmental profile and achievements of the 1994 Winter Olympic in Lillehammer, the world’s first «green games». The goals of the Olympic movement now include environment and culture in addition to sports. We hope the Olympic Games in Atlanta and Nagano will build on the start we made in Lillehammer. Later this morning you will hear some other examples of Norwegian experiences from business and industry. In Norway we have established an excellent cooperation which will be reflected in their progress reports on promise and profit for the environment.

Leadership toward our common future

My concluding message is that the world needs a new kind of leadership, not to maximise profits for a few but to achieve a better quality of life for all. Leadership is as much a question of attitudes and behaviour as skills and intelligence. On many fronts the world is looking to America for leadership. With many innovative industries and top scientists with worldwide reputations, you have the knowledge base and the managerial expertise to set the pace and scale of needed change toward sustainable development.

A few years ago when crossing the Potomac River you could read on the walls of one of the bridges a short grafitti statement which simply said:
GOOD PLANETS ARE HARD TO FIND.
To that sentence I would add:
LET US THEREFORE TAKE BETTER CARE OF THE ONE WE HAVE.