Can voluntary policy approaches achieve scale on sustainability?

Over the last decade, the number and variety of sustainability standards have grown. It’s undeniable that the prevalence of sustainability policy is having an impact on businesses. In western markets we increasing see these referenced in company-issued ‘requests for proposals’ (RFP) and progressive companies are starting to declare their adherence to such policy as an indicator of performance – alongside their financial returns.

One could also argue that many governments are behaving like corporations as they are increasingly subscribing to international guidelines and standards; such as the OECD Guidelines for Multinational Enterprises, the International Labour Organisation Declaration of Principles Concerning Multinational Enterprises and Social Policy, and the United Nations Global Compact.

Fundamentally, I do believe that voluntary policy approaches can achieve scale on sustainability and are a key means of effecting change. However, I would argue that they can only be successful where there is:

- Sufficient credibility and administration of the requisite governing body

- Critical mass of public opinion and ‘influencers’ supporting the tone and intent

- Indirect economic, environmental and social implications taken into account

The voluntary nature of such policies enables both corporations and government to identify more flexible ways to adopt sustainability. This invariably results in ‘first movers’ embracing sustainability efforts (either motivated by philanthropic endeavour or as a means of increased market competitiveness). Whilst others are deterred from action as they are inclined to view policy as an administrative burden. Which consequently leads us to question whether voluntary policy approaches on sustainability can achieve the required pace of change?

Human behaviour is complex and in our multi-polar, fast-paced world people are undoubtedly more inclined to engage with policy when it is mandatory or subject to ‘herd’ mentality (i.e. everyone else is doing it…). Critical mass and voluntary response to policy takes time and is not guaranteed. Therefore, if we are serious about legitimising and increasing our efforts to sustain our planet, then mandatory policy would seem to be the best viable option.

This is seen in stark reality when put into the context of our financial markets where regulation is a fundamental driver of the sustainability agenda. Since governments and stock exchanges around the world have begun imposing mandatory reporting requirements (e.g. environmental, social and governance measures - ESG), corporations have been more inclined to act. In an economy that is driven by quarterly returns and has notions of ‘growth’ so ingrained in its culture, legislation is needed to ensure the stability and sustainability of operating within a finite system (and ultimately a finite planet!).