The Rio Summit and the creation of BCSD

Towards end of the 1980s, the success of my business group's diversification efforts started to attract attention. I began to be recognized as an entrepreneur who had made a difficult but correct business decision in social and environmental terms and who, moreover, had managed to make money instead of losing it, a rather unusual outcome when one does ‘the right thing’. Soon I was receiving invitations to talk about my business experiences.

In 1990, a Swiss university asked me to speak on the topic of business and the environment. That same year, I was invited to give a similar talk at a meeting held in Bergen, Norway, where European and North American government representatives had gathered to define their positions preparatory to the 1992 UN Conference on Environment and Development (UNCED), better known as the Rio de Janeiro Earth Summit. On the ship where I made my presentation, I was introduced to the UNCED secretary general and we soon were engaged in a lively discussion. He was convinced of the need to persuade the largest possible number of business leaders that socially and environmentally responsible behavior should not be synonymous with high costs and financial losses. And perhaps because I had already shown that this need not be so, he asked me to become his "Chief Advisor for Business and Industry."

The timing was perfect. I had already decided to take one year's sabbatical, as my group was sailing smoothly and operating satisfactorily. I wanted to have time to reflect on the relation between business and society. I felt that this proposal had come at the right time, and that the invitation would give me the right framework for my reflections. I accepted the office.

I wanted this job to be a learning opportunity for me; I also wanted to put together a wide team of advisors. I decided, therefore, to organize a group of leading entrepreneurs from different industries and regions. I spent 1990 and 1991 traveling the world seeking to convince the heads of leading companies to join this Business Council for Sustainable Development (BCSD). Since my intention was to include individual leaders rather than corporate entities, and as there was little time to negotiate sharing of council expenses, I undertook to pay them myself. And mindful also of the fact that time is a top leader's most precious resource, I promised to dissolve the council after the summit.

Although only CEOs, presidents or managers in equivalent positions were accepted as members, much to my surprise and in a relatively brief period of time, I was able to recruit about 50the right people; these included the leaders of world-renowned companies such as ABB, ALCOA, Chevron, Ciba Geigy, Dow, DuPont, Mitsubishi, Nippon Steel, Nissan, Shell, and Volkswagen.

Before contacting a prospective member, I did not look at his or her company's social or environmental behavior. Rather, I tried to ascertain his or her personal commitment to these issues and to determine whether he would be prepared to give them priority in his work agenda. The BCSD's mission at the Earth Summit was not to explain how well our companies behaved in the social and environmental areas, but rather to show how business leaders could bring about positive change in corporate behavior.

The first BCSD meeting was held in The Hague, Netherlands, in the spring of 1991. There the Council almost disbanded before it had even begun to work. Try to picture 40 business leaders gathered in a room. One of them stands up and suggests that, due to political, financial, and scientific uncertainty, the best the BCSD could do would be to publish a brochure explaining how business was good for the environment and development, and advocate the need for more research.

The president of a coal-fired power company from Alberta, Canada, reacted vehemently to this proposal. He reminded the meeting that all of us, in one way or another, had benefited from the market; that the free market system, although it functioned well, was not perfect; and that it reflected economic realities far better than environmental ones, as the prices of goods and services seldom included the costs of the environmental damage they generated. He urged all BCSD members to focus on "real costs", i.e., those that take into account environmental costs, if they truly wished to act as responsible business leaders.

This impassioned plea broke the ice and opened the way for a lively debate. Was it realistic to talk about including environmental costs? How would we calculate, for instance, the costs of damage to the ozone layer? BCSD members became less skeptical and more committed. They broke into small working groups to discuss such issues as what to do about energy and the financial markets, and the true meaning of corporate social responsibility.

Changing course

Our growing enthusiasm led us to write a book rather than a brochure, and to publish it commercially prior to the Rio Summit. I estimate that close to 1,000 people were involved in the drama involved in producing the book Changing Course: a Global Business Perspective on Development and the Environment, if one takes into account the huge number of experts and non-governmental organizations (NGOs) that were consulted. In less than a year, the BCSD organized 50 meetings in 20 countries to spread the message of sustainable development. The book, published by MIT (Massachusetts Institute of Technology) Press, became a best-seller and was translated into 15 languages.

It describes the steps to be taken by the business sector, governments, and civil society leaders to ensure that present needs are met without endangering the ability of future generations to meet their own needs. It marked the first time that a group of leaders from the top companies in the world analyzed the problems of development and the environment from a global perspective and came to relevant agreements. We offered examples from the real world to underscore the practical importance of our statements, having compiled case studies in order to show that our proposals were not merely theoretical exercises but had actually been successfully implemented by many companies. The book also explains how the search for sustainability can make businesses more competitive.

The title Changing Course was carefully selected. Although our basic goal was to promote a long-term vision, we were also aiming at immediate action to achieve profound changes. As lead author, I was able to write about beliefs formed during by struggle to get the group out of asbestos: companies are meant to serve society, not the other way around; and companies that do not -- and are not seen to -- serve society will fail.

While writing this book, we held a competition to find the most appropriate term to define a company's potential contribution to sustainable development. We received hundreds of proposals, from which I selected eco-efficiency. The eco prefix elegantly combines two fundamental concepts: economy and ecology. Simply put, eco-efficiency means adding greater value to goods and services while using fewer resources and generating less waste and pollution. Today, the term eco-efficiency is accepted worldwide and used in business schools and corporate manuals.

We wrote a two-page prologue to the book -- the "Declaration of the Business Council for Sustainable Development" -- which all members signed. Its first three paragraphs clearly reflect our vision:

• "Business will play a vital role in the future health of this planet. As business leaders, we are committed to sustainable development, to meeting the needs of the present without compromising the welfare of future generations.
   
• “This concept recognizes that economic growth and environmental protection are inextricably linked, and that the quality of present and future life rests on meeting basic human needs without destroying the environment on which all life depends.
   
• “New forms of cooperation between government, business, and society are required to achieve this goal."

This last statement shows that we were looking for new ways to bring together all sectors of society in support of sustainable development. The BCSD did succeed in bringing together business and government. In terms of this new modality of cooperation, companies should move beyond their traditional lobbying activities, and governments should think beyond the usual legislative measures on regulations and control.

As promised, I tried to dissolve the BCSD following the Earth Summit, but the members balked. They argued that companies now had the duty to work with governments and NGOs towards sustainable development, with a view towards establishing completely new relationships with governments and civil society organizations. They felt that the BCSD was the ideal launching pad for this new way of working. I agreed with the proposal, but asked that we appoint a new president so that the council would not be so dependent on me.

In 1995, the BCSD merged with the World Industry Council on the Environment (part of the International Chamber of Commerce) to become the World Business Council for Sustainable Development (WBCSD).

In the following years, different WBCSD working groups dealt with problems such as the measurability and profitability of eco-efficiency, climate and energy, sustainable forestry, corporate social responsibility, water management and transportation, and mobility, among others. WBCSD cooperated with the Organization for Cooperation and Economic Development (OECD) in the area of eco-efficiency, and played an active role in UN climate conferences.

So, my ‘simple’ assignment as a consultant to the Earth Summit turned out to be far more encompassing and long-term than I had imagined when I accepted it. In discharging the mission entrusted to me by the secretary general, I invested much of my time and several millions of my own assets. I was, however, richly rewarded for this: I enjoyed my work and gained a wide range of new insights. I was forced to think of the global challenges that are a sign of our times, and later this helped me make strategically correct decisions for my companies. I met and got to know fascinating people from all corners of the world, and gained experience in working with the media.

Having devoted two years of my life to what was in effect an intensive seminar that taught me a great deal about social development and the environment, I now had a new outlook on life. It was a new perspective that I took with me when I returned to my business activities.