Journalists' Business Briefing for Johannesburg World Summit-Globalisation

www.article13.com have launched a new mini-site, called Journalists Link, that will give you key information and insight on the Earth Summit 2002 and its links to business. We have identified five issues on the agenda that are relevant to business and in the days running up to the Summit will be posting briefing papers on Corporate governance, Reducing poverty, Making globalisation work, Sustainable levels of consumption, Reversing environmental degradation.

Number 3 in a series of 5 below.

Making Globalisation Work for Sustainable Development
- a key concern has been the failure of globalisation to assist in achieving sustainable development. In general globalisation has been seen as failing to deliver on poverty eradication as well as placing more stress on the use and protection of natural resources.

What business can do/is doing: The liberalisation of markets across the world offers huge opportunities for business. As more countries and businesses enter the worlds markets the pressure from NGO's to develop more environmentally constructive and socially just technology and services grows. Within the retail sector the growth of fair trade products and organics are two business responses since the Earth Summit in 1992. Business will be required to do more.

Business Opportunity: Growth in sectors such as renewable energy, alternative fuels, fair trade products and ethical investment demonstrate the growing market for products in global markets. For example, in 1997 the UK domestic environmental market was estimated at US$11 billion and it is projected to reach US$23 billion by 2010 - equivalent to average growth of 6% per annum. Few industries will show this sort of worldwide growth over the next 10 years.

Business Risk: Many NGO's and consumers are increasingly scrutinising the action of corporates in the face of the growing power of business and the lack of regulation of business and finance institutions in developing countries. Failure to change behaviour could lead to market closure. A recent example has been the demise of Asia Pulp and Paper European paper market due to European NGO exposure of their operations in Indonesia.

Case study: Starbucks

The fastest growing brand name in the world is a favourite targets of anti-globalisation and anti capitalist protestors along with Nike and McDonalds. It has a growing empire of over 5,000 coffee outlets across the globe. The company, which buys about 1 % of the world's coffee and 15 % of all speciality coffee, has been criticised for its supply chain ethics, an aggressive marketing strategy and a 'homogenising' impact on local communities. A recent community campaign in Primrose Hill (North London) successfully caused the company to withdraw its planning application for a new outlet stating that it "feels sorry at the level of animosity shown towards Starbucks".

In response to this growing concern Starbucks announced in late 2001 that it will pay a premium of 10 cents per pound for beans grown on environmentally and socially responsible farms. The company hopes this announcement will "create positive changes within the global coffee market and ultimately result in a fully sustainable coffee production supply chain." Its new purchasing philosophy developed with the Centre of Environmental Leadership in Business, a division of Conservation International will be piloted for two years. Its objective is not to replace existing supplier relationships but rather to enlists current suppliers.

The sourcing guidelines are based on a flexible point system that reward performance in sustainable categories - quality, environmental impacts, social conditions and Economic issues, covering issues such as energy and water conservation, pesticide use, biodiversity, and safe and fair working conditions. Qualifying suppliers will be granted preferred status. Supplier information will be verified by an independent third party. However, the pressure will still be on Starbucks to do more. The key to determine whether Starbucks is serious about promoting more sustainable production will be the level of disclosure on its supplier's performance