A half-century has passed since the 1972 United Nations (UN) Conference on the Human Environment was held in Stockholm, which set in motion discussion, negotiation, and ratification of a whole series of international agreements.Footnote 1 The processes that began with the Stockholm Conference and the creation of the United Nations Environment Programme (UNEP) in 1973 led, via the Brundtland Commission (1987), to the 1992 UN Conference on Environment and Development in Rio. These historical processes laid the foundation for today's global environmental governance system, including global governance of climate change.Footnote 2 It is widely held that corporations and private regulatory initiatives have taken on regulatory functions in the global economy that were once assumed to be the domain of the state and intergovernmental organizations.Footnote 3 Yet the historical role of business in the creation of global environmental governance has not been studied comprehensively.Footnote 4 No research has yet provided a synthesized and coherent history of how business interests, knowledge, and ideas became integrated into the governance system.
Drawing on extensive historical evidence from the International Chamber of Commerce (ICC) and the personal archives of former UN officials, this article aims to show that international business associations, in particular the ICC, were instrumental to the transformation of international environmental governance between the Stockholm and Rio conferences. As has been noted in the environmental governance literature, the period between Stockholm and Rio saw a shift in the balance of power away from state- and government-centered approaches and toward markets and a liberal environmental governance regime.Footnote 5 This liberal regime shift involved a market-based approach to environmental reform that included environmental taxes and emissions trading along with a rapid expansion of business self-regulation programs, such as voluntary codes of conduct and certification schemes, to promote corporate sustainability.Footnote 6 The shift worked in tandem with new theoretical thinking around “green capitalism” in the late 1980s and the 1990s that rested on the argument that the capitalistic imperative could be aligned with environmental goals.Footnote 7 Much of the existing research that covers the period prior to the Rio Conference, however, focuses on the impact of political leaders, diplomats, scientists, environmentalists, nongovernmental organizations (NGOs), and international organizations such as the Organisation of Economic Co-operation and Development (OECD).Footnote 8 In this established narrative, business actors play no significant role or are only seen to gain some influence at the end of the 1980s and beginning of the 1990s.Footnote 9
A broad range of scholars have noted that by the 1980s, the notion of sustainable development had replaced the 1970s perceptions of biophysical limits to growth and government-centered approaches to addressing global environmental challenges.Footnote 10 Some have argued that the invention of sustainable development in global governance was related to the rise of neoliberal ideas in the 1980s, coupled with the UN's newfound trust in transnational corporations to address the profound environmental challenges of the early 1990s.Footnote 11 These changes represented a major shift from the 1970s, when business and the capitalist system were generally seen as the problem behind the global environmental crisis rather than as a part of the solution. As Geoffrey Jones argues, the creation and diffusion of private regulation in terms of certification and new accounting tools from the 1990s on enabled large multinational corporations to engage with the environment while enhancing value. Certification and environmental reporting allowed multinationals to demonstrate publicly that they were becoming more sustainable, while greenwashing simultaneously widened the boundaries of the concept of sustainability such that any corporation could be engaged in it.Footnote 12 But so far, few business historians have engaged with issues related to global environmental governance.Footnote 13 The case of environmental governance captures many key aspects of the specific role played by organized business interests, including lobbying, in shaping and reshaping global governance structures in the twentieth century.
Sociologists and political scientists have studied how transnational corporations gained power in global environmental governance.Footnote 14 Parts of this research have looked at the influence transnational corporations have had on global treaties, like the Montreal Protocol on protecting the ozone layer, and on governments.Footnote 15 It has been suggested that corporate influence has been clearest in the global rise of neoliberalism and its institutionalization in trade agreements.Footnote 16 An interrelated stream of research has focused more on the evolution of private regulations, including codes of conduct as a source of governance.Footnote 17 This “privatization” of authority has typically been seen in the context of an increasing belief in the superiority of market-driven policies and globalization from the 1990s.Footnote 18
Yet, as this article will demonstrate, the ICC had already become an important partner of UNEP in the 1970s and 1980s and was able to influence the increasing importance of market mechanisms within global environmental governance. The ICC and UNEP developed a partnership that by the mid-1980s resulted in a convergence of perceptions that bridged previous conflicting views on the relationship between industrial growth and the environment. Together, the ICC and UNEP worked to construct the concept of sustainable development, in which market mechanisms and voluntary business action were seen as constructive and vital forces. Instrumental in the process was the ICC's ability to connect to the World Commission on Environment and Development (WCED) and progressively develop a coherent set of environmental management rules to which firms committed and that were recognized by international organizations. These rules helped the ICC promote the principles of self-regulation and legitimate its call for less governmental intervention—a position that became dominant after Rio.
It is important to note that the ICC was a global organization with a long tradition of cooperation with international organizations.Footnote 19 It was created in 1920 in Paris to bring together the world's business community.Footnote 20 The number of ICC member states grew substantially in the twentieth century, from fourteen in 1922 to thirty-two in 1935 and more than ninety in 2019. The ICC could thus count on the financial, organizational, and reputational support of most industrial and financial communities that represented business as a whole and not one particular sector, with the exception of small businesses and rural interests. Within the ICC, national and international business representation worked hand in hand. National business associations and chambers of commerce formed national ICC committees, which sent delegates to the Council of the International Chamber of Commerce, which in turn chose an executive committee to assist the ICC president. Every second year, a congress elected a new president and voted on resolutions reflecting the opinion of the business community. In addition, the ICC had numerous technical committees on subjects related to international business, such as arbitration, standardization of commercial terms, transport, banking techniques, and taxation. These committees advocated free-trade policies and the (self-)regulation of international business activities through standards and codes. They were in close contact with intergovernmental agencies—the League of Nations during the interwar period and the UN's agencies after 1945—which acknowledged the ICC for its legitimate expertise on these subjects.Footnote 21
The last two decades of the twentieth century marked a turning point for the ICC. First, several conditions were favorable to its activities and discourses, particularly the economic and ideological climate of the 1980s, which was largely defined by economic globalization, the rise of neoliberalism during the Reagan and Thatcher era, the opening of communist economies to market mechanisms, and the economic difficulties of the UN, including UNEP. Second, at the same time, the ICC became involved in new areas of international governance where it tried to promote self-regulating mechanisms: the environment, as we shall see, but also the fight against corruption.Footnote 22 The ICC's members participated in this new neoliberal world order, marking a strong contrast with the previous decade's New International Economic Order, characterized by the UN's attempts to regulate multinationals.Footnote 23
The question, then, is how international business associations like the ICC were able to engage with policymakers at the international level of governance. It is often assumed that corporate actors sought to gain a seat at the negotiating table to impact legislation at the international level.Footnote 24 But rarely have questions been raised about if and why business was actually invited to the table and, if so, on what grounds. This article shows how the UN and UNEP preferred early on to establish contact channels through umbrella organizations of the international industry (i.e., business interest associations, or BIAs) and not through contacts with individual companies.Footnote 25 Researchers have agreed that international industry emerged well organized with a united agenda in Rio, which had great significance on global environmental governance for decades to come. Yet the historical process that laid the foundation for this victory for international business interests in global environmental governance remains to be explored.
This article is divided into two parts, each focusing on one “turning point” in the interactions between business and the UN in order to understand how sustainable development and environmental private rules gained legitimacy in the international realm during the 1970s and the 1980s. First, it investigates the period that began around the Stockholm Conference and lasted until the World Industry Conference on Environmental Management (WICEM) held at Versailles, Paris, in 1984. The second part focuses on the period that followed, up to the Earth Summit in Rio in 1992.
From Stockholm to Versailles
The early 1970s set in motion vibrant actions within the ICC in the area of international environmental policy. In short, this period included the Stockholm Conference, the establishment of cooperation between the ICC and UNEP, and the ICC's self-regulation initiatives in the area of the environment. The framework surrounding the Stockholm Conference stressed concerns about planetary limits to economic growth and questioned the Western world's postwar growth path.Footnote 26 The debate intensified after the conference when the Club of Rome published its 1972 report Limits to Growth.Footnote 27 Environmental protection and growth were seen as difficult, even impossible, to reconcile in the long run, given future population growth.Footnote 28 Against this background, industry leaders dreaded costly environmental regulation, while multinationals would also face the challenge of nationally divergent environmental policies.Footnote 29 What the ICC feared most was not environmental regulation as such, but that it would severely complicate international trade and transnational business operations resulting from disharmonized legislations between countries.
In April 1971, the ICC held its biennial congress in Vienna under the title “Technology and Society: A Challenge to Private Enterprise.” Discussions were based on a background report on global environmental problems prepared in advance by Lord Solly Zuckerman, former chief scientific adviser to the British government. The Vienna conference led to the adoption of a “statement of conclusion,” which accepted and recognized the responsibility that global industry had in “matters of environment.” Noticing the rapidly increasing mobilization around the environmental issue at the international level, participants at the Vienna congress urgently recommended the establishment of a special environmental committee within the ICC. The first substantial task of the committee was to prepare a contribution from world industry to the Stockholm Conference in 1972.Footnote 30
In July 1971, Charles S. Dennison, director of the Overseas Development Council and member of the ICC's US Council, participated as the only business representative in a three-day retreat in Aspen, Colorado, aimed at discussing the content of the upcoming Stockholm Conference.Footnote 31 In his report, Dennison warned his ICC colleagues of the difficulties they would meet in the following years regarding international environmental regulation: “Lest the impression be given that the environment effort will be a cooperative tea party, it is obvious that the international industrial community will be involved in a rough, immensely costly struggle.” In his view, major US firms were already fully aware of the environmental issue in terms of their domestic operations; however, because of their increasing dependence on their international operations, these firms had to become equally alert to the international implications as well. Dennison proclaimed that it was urgent to act immediately and that the ICC was the best available “instrument.”Footnote 32
This call to action was heard by the ICC headquarters. The organization's special environmental committee met for the first time on February 22, 1972, and concentrated on preparing a response to the basic documentation of the agenda for the Stockholm Conference.Footnote 33 A confidential consultation with the conference's secretary-general Maurice Strong took place at the ICC headquarters in Paris, in a meeting that the ICC organized together with the International Institute for Environmental Affairs (IIEA).Footnote 34 Strong promised to provide informal information to the business leaders about the upcoming conference and to answer questions. Aurelio Pecci, vice chair of the Club of Rome, also attended the meeting in Paris.Footnote 35 The ICC's connection with Strong would prove to be important for both parties in the future. Strong would later become the secretary-general of UNEP, the anchor organization of international environmental governance from 1973; a member of the Brundtland Commission; and eventually the secretary-general of the Rio Conference.
The ICC raised early concerns that decisions and actions resulting from the Stockholm Conference would have future implications for trade and for international economic relations in general. Product and production regulations imposed on specific industries had to be harmonized, according to the ICC's view.Footnote 36 To be well prepared for Stockholm, the ICC, following the initiative of the Federation of Swedish Industries, organized the World Industry Conference on the Human Environment to be held in Gothenburg a few weeks before the Stockholm Conference. The Gothenburg conference was attended by over one hundred industrialists from seventeen countries, as well as representatives of the UN, OECD, and the European Economic Community. A unanimous statement by the conference participants was submitted to Strong, who brought it to the attention of the national delegates in Stockholm.Footnote 37
In Stockholm, the ICC was represented by an eleven-man delegation led by the secretary-general, Walter Hill, and the chair of the Special Committee on the Environment, John Langley.Footnote 38 As it turned out, business representatives were somehow sidelined in Stockholm.Footnote 39 In an address to a plenary session, Hill argued that the conference had too much of a focus on science. He stressed the role that industry must necessarily play in any successful global effort to improve the environment and expressed his concern about the apparent lack of awareness of this role at the conference. The president of the Federation of Swedish Industries and members of the ICC environment committee expressed similar views to the international press.Footnote 40 While opposing detailed regulation, Hill argued that the market economy provided the best conditions for addressing environmental problems and called for harmonization of environmental requirements.Footnote 41 The ICC also requested more national and international cooperation as well as active involvement with the UN in the future. One suggestion was to set up an international “know-how” bank under the auspices of the UN.Footnote 42
One year later, in 1973, the ICC launched the International Center for Industry and the Environment (ICIE) to function as an intermediary for information between business leaders and UNEP.Footnote 43 However, the initiative soon faced major difficulties, and the ICIE disappeared at the beginning of the 1980s in total anonymity. One reason was mistrust between the ICC and UNEP. The ICC argued, for example, that the relationship was asymmetrical, criticizing the fact that UNEP was not sharing information.Footnote 44
At the same time, the ICC launched an initiative that would have a long-lasting impact. In his speech in Rio in 1973, Ian MacGregor, chief executive officer (CEO) of US mining company AMAX, proposed that the ICC should define an international code of environmental practice that would include “fair and equitable rules of industry behavior in the field of the environment.” One year later, the ICC congress in Hamburg adopted its “Environmental Guidelines for World Industry.” In a first step, Paul de la Calle, Shell environmental manager, redacted a draft based on the multinational’s environmental instructions to its worldwide subsidiaries. This draft was painstakingly revised by a special working group and by national committees.Footnote 45 F. Taylor Ostrander, economist at AMAX and a member of the special working group, explained that the guidelines contained a great deal of policy and complained about “unknowledgeable or capricious or just plain unconstructive proposals from some of the National Committees.”Footnote 46
The environmental guidelines that were eventually adopted perfectly represented the ICC's preference for self-regulation by business. Concerning international environmental governance, the ICC emphasized that environmental measures should not “distort international trade relationships” and argued that the command-and-control methods increasingly introduced by national governments should be limited and complemented by self-regulatory measures. The idea of self-regulation to control pollution was not a new one; it had developed, for example, in the US petroleum industry during the first half of the twentieth century, before this self-regulatory ethics was replaced by government-enforced regulations from the 1960s on.Footnote 47 At the beginning of the 1980s, the ICC revised its guidelines for the first time. The justification given for this revision is interesting because it shows the limitations of the first version: “This updating seemed highly desirable as the present guidelines were somewhat too general having been prepared at a time when industry had felt that a very cautious approach to the subject was required.”Footnote 48
The discourse on economic growth and its relationship to the environment did not favor international business. When Strong made his introductory statement in front of UNEP's Governing Council in 1973, he called for new growth concepts and models for economic and social development.Footnote 49 He relied on scientific background work for the Stockholm Conference that outlined potential biophysical “outer limits” in relation to the generation of heat, the carbon dioxide content of the atmosphere, the ozone content of the stratosphere, and the health of the oceans.Footnote 50 But UNEP's more natural science–based view of the relation between growth and the environment widened in the 1980s. As the following section will demonstrate, UNEP would invite the ICC to sit in the driver's seat and examine a somewhat less strenuous road forward beyond perceptions of limits.
Toward a peace treaty in Versailles
In 1982, the tenth anniversary of the Stockholm Conference, UNEP and the ICC organized separate conferences. In April, the ICC and the Federation of Swedish Industries organized the World Industry Conference on the Environment in Stockholm, with representatives from UNEP and the World Bank, among others. Some one hundred industrialists met to report “on industry's achievements in environmental protection.” The conference welcomed cooperation between UNEP and the ICC, but business still complained that it had “been too much of a one-way traffic” as industry, “often providing the information,” had “little influence on its use.” The conference also reemphasized that environmental legislation and regulation had to be reasonably harmonized worldwide to diminish the risk of harmful distortion of competition and trade. More growth, not less, would result in environmental improvements through technological development.Footnote 51 Yet industry appeared confident that it could provide a technological fix to environmental problems while maintaining economic growth. Successful cases were presented from the pulp and paper industry and other sectors. “We must substitute for the false alternative: protection of the environment or economic growth,” as the director of Environment, Consumer Protection, and Nuclear Safety for the Commission of the European Communities put it.Footnote 52 The deputy executive director of UNEP, Peter S. Thacher, proclaimed in his keynote speech that never before had the need been greater for cooperation among the world's business community, as it was represented by the ICC and other organizations that came together in UNEP.Footnote 53
One month later in Nairobi, 105 government delegations, intergovernmental organizations, and UN agencies, plus representatives of more than 100 NGOs, met to review changes to the environment during the previous decade. Their objective was to assess the activities of UNEP and to formulate scenarios for the future. The assessment of the environment was “rather grim.”Footnote 54 However, strong disagreement emerged between industrialized countries, particularly the United States, and developing nations. The latter wanted to develop multilateral environmental cooperation by expanding UNEP's activities, which the United States opposed. In fact, as a US delegate reported, the Reagan administration was “defensive and even hostile towards multilateral cooperation for resolving global environmental problems.”Footnote 55 Collaboration with industry was mentioned but did not constitute an important item on the agenda.
Only a year after Nairobi, in 1983, the Governing Council of UNEP approved a resolution “urging the world industry to convene an international conference to examine ways in which their technological and scientific expertise could be applied.”Footnote 56 This was the first time the UN had officially called on industry to help solve environmental problems. The result was the first World Industry Conference on Environmental Management, held at Versailles in 1984 and jointly organized by UNEP and the ICC. A wide range of leading multinational corporations—including Exxon, Gulf Oil, US Steel, Ford, Union Carbide, Dow Chemical, Nestlé, Unilever, Shell, Henkel, and others—sponsored and attended the conference. In sum, the conference brought more than five hundred government and business representatives together from developed and developing countries to examine how companies could meet the growing challenges and concerns with respect to the long-term effects of pollution on the planet.
How was it, then, that UNEP reached out to the ICC to organize a joint conference and that the ICC accepted this proposal only one year after the failed conference in Nairobi? Perhaps the ICC's 1982 meeting in Stockholm was a good experience, in contrast to Nairobi. Thomas M. McCarthy, chair of the ICC environment committee and director of Technical Relations Europe for the US multinational Procter & Gamble, offered a more precise answer. As he put it, the ICC accepted the proposition by Strong's successor, Mustafa Tolba, because it “noted an important change in the attitude of the Executive Director of UNEP towards the industry.”Footnote 57 Tolba, in an interview, summarized this change: “For the past 10 years, we have been trying to convert the converted—we have been talking to the environmentalists and we have not tried to go beyond that. . . . Now I intend to go straight to industry and business for support.”Footnote 58
Three main factors were responsible for this shift. First, UNEP was facing serious financial difficulties, largely as a result of diminishing contributions by the United States to the UN.Footnote 59 Organizing an international conference with the financial support of industry was a way to expand UNEP's activities without putting too much strain on its finances. Second, by working with private industry, UNEP hoped to gain the favor of the US government, its main funder, which had been very critical of UNEP in Nairobi. As Gregory J. Newell, assistant secretary of state, explained, the Reagan administration “sought to encourage a broader role for the private sector in international forums, because we believe that the private sector can greatly contribute to solutions for a wide range of international economic and development problems.”Footnote 60 Third, the creation of the WCED in 1983 and the appointment of Gro Harlem Brundtland as its chair were blows to UNEP.Footnote 61 The Brundtland Commission emerged during the second half of the 1980s as the UN's environmental flagship. Collaborating with industry was a way for UNEP to regain some influence within the UN. For the ICC, the conference in Versailles provided an excellent opportunity to establish its legitimate right to greater involvement in governmental policy discussions at both national and international levels.
Before the winter of 1984, the conference was being planned by UNEP; its organizing committee was based in the United States and composed almost exclusively of US businessmen. However, this strategy quickly proved counterproductive. The Europeans were losing interest in this conference, as its sponsorship indicated: of the twenty-four companies that contributed funds, generally to the tune of $10,000, only one (Ciba-Geigy) was European.Footnote 62 Four months before the start of the conference, only $250,000 had been raised. This was far from the $850,000 needed to host the event. It was therefore necessary to actively encourage European and Japanese involvement. Moreover, it was essential to “de-Americanize the preparatory efforts” if WICEM was to be perceived by developing countries as a “genuine world-industry conference.”Footnote 63
In early 1984, Tolba decided to transfer most operations from the United States to Paris. This was made possible after discussions between UNEP and the ICC in which the latter took a leading role in planning the conference. “Finally, we have the Europeans on board,” wrote Casey E. Westell, the coordinator on the US side of the conference, to Maurice Strong in February 1984.Footnote 64 But the ICC agreed to co-organize WICEM on its own terms. For instance, some key ICC figures appeared on the conference board, and McCarthy became co-chair of the organizing committee with Tolba. The ICC's involvement considerably diminished the costs of the conference and rapidly attracted new European and Japanese sponsors. The balance of power between the two institutions changed. It was no longer UNEP that set the pace; the ICC had taken the lead.
The notion of sustainable development at WICEM
In mid-November 1984, the conference was held in Paris. A special effort had been made to ensure that representatives from different regions of the world were present. The choice of the Château de Versailles as the site of the conference was significant not only because of the historic importance of the Treaty of Versailles but also because “the Palace, with its monumental gardens stretching away into the horizon, could hardly be bettered as an example of an orderly and highly-managed environment.”Footnote 65 The Brundtland Commission had only started its work, but the notion of sustainable development was already in the air in Paris. In the draft report published in advance of the conference, Tolba and McCarthy argued that “too often had debate about the environment issues been adversarial, and that too many people had seen them as ‘either-or.’” They made clear that the discussions at WICEM would focus on “how to achieve economic growth with environmental quality.” They noted that the concept of economic growth had been superseded in some circles by a qualified version of it: “sustainable development.” They asked and then answered their own question: “What does that [sustainable development] mean, exactly? Again, let us try a definition—and then throw it open for discussion. ‘Sustainable,’ we suggest, means that development can be maintained indefinitely without damaging the environment—or threatening development itself.”Footnote 66
Tolba and McCarthy also put forward a rhetorical question about whether sustainable development could happen. The answer was simple: “It has.”Footnote 67 During the conference, some speakers, including Gro Harlem Brundtland, emphasized the importance of sustainability. She was not the only member of the WCED who attended the conference. The administrator of the US Environmental Protection Agency, William Ruckelshaus, also a Brundtland Commission member, served as a convener and keynote speaker. In the final conference report, the notion of “sustainable economic development” was adopted. According to Erik Lykke, OECD's director of environment, this conclusion would not have been possible ten years earlier. It was, he stated, “a widely held view that environmental protection could be achieved only at the expense of slower economic growth.”Footnote 68
The conference also emphasized the importance of collaboration between different stakeholders, especially industry and government. Industry was thus considered an important partner of government, international organizations, and NGOs in the arena of international environmental governance. This marked a major shift since Stockholm. UNEP now saw multinationals, so decried a decade earlier by international organizations, as key players “in helping to raise the standard of environmental management in those countries in which they operated.”Footnote 69 Robert O. Anderson, chair of Atlantic Richfield Company (ARCO), the world's ninth-largest oil company, had attended both the Stockholm Conference in 1972 and the Versailles conference; he reported that “for me, a key aspect of Versailles was a strong recognition—far less obvious in Stockholm—that the problems we face in the environment will not be solved by governments alone.”Footnote 70
At the level of the firm, WICEM marked an important step in the definition of environmental norms, their operationalization within the enterprise, and their recognition by business and international organizations. Leaders of industry, governments, and international organizations discussed several management tools during the conference: cost-benefit analysis, self-regulated guidelines, and environmental impact assessment (EIA). In the 1990s, the EIA became one of the pillars of environmental auditing that the ICC promoted as a self-regulated internal management tool.Footnote 71
A key issue addressed time and again at WICEM was the efficacy of self-regulation by industry. The ICC, which had published its environmental guidelines in 1973 and revised them in 1981, was a strong proponent of self-regulation. At the WICEM press conference, Hans König, Secretary-General of the ICC, declared that “international environmental standards should be expressed through guidelines and codes rather than through legally binding treaties among nations. The reason? The virtual impossibility of drafting treaties that are equally appropriate to the many nations asked to ratify them.”Footnote 72 Contrary to the 1970s context, the ICC was not alone. For example, the World Wildlife Fund was a strong supporter of voluntary codes of conduct after a successful collaboration with representatives of the shipping industry to combat vessel-borne pollution. However, not everyone was convinced of the necessity of introducing such measures. Some NGOs and governmental representatives questioned whether this code of conduct “could be anything more than [a] public relations exercise,” and some businesspeople feared they could be “the first step on the road to more restrictive legislation and standards.”Footnote 73 Finally, the conference recommended continued development of different forms of self-regulation.Footnote 74
From Versailles to Rio
The Versailles conference in 1984 marked an important turning point and changed relations between UNEP and the ICC profoundly. At the same time, it represented an important step in the ICC's efforts to implement sustainable industry concepts in daily business and administrations of firms.
The organization of WICEM strengthened the ICC's links with UNEP in three particular areas. First, in 1985 the ICC revised its environmental guidelines with the goal of making them “increasingly specific and actionable,” in response to the criticism that the initial guidelines tended “to list general and philosophical principles rather than recommendations for specific action.” In revising its guidelines, the ICC considered remarks made by UNEP and bore “in mind the WICEM Conference Declaration.”Footnote 75 Second, in Versailles, the ICC and UNEP had decided to organize an annual “summit” meeting between chief executive officers and ministerial-level government officials in order “to provide the opportunity for a high-level overview of world-wide developments concerning industry and environmental management.” The first of these ICC-UNEP high-level meetings was held in January 1986 and focused on conference follow-up.Footnote 76 Third, the ICC participated in a more constructive way in UNEP's conferences devoted to environmental issues. During this period, the UN negotiations that led to the Montreal Protocol on Substances that Deplete the Ozone Layer, signed in 1987, were central, as they were “UNEP's greatest achievement.”Footnote 77 The ICC followed closely and participated in the elaboration of the Montreal Protocol, although it was also internally divided on the issue.Footnote 78 However, after the agreement was signed, the ICC adopted another strategy, which aimed at supporting the rapid implementation of the protocol and at helping industry, especially in developing countries, to “use appropriate substitutes.”Footnote 79 This strategy was part of the ICC's program on sustainable development and strengthened the organization's environmental legitimacy with the UN.Footnote 80
During the three years that followed Versailles, the ICC environment committee's main priority was providing input to the Brundtland Commission.Footnote 81 This was vital, because ICC members had harshly criticized some preliminary versions of the Brundtland Report. The ICC's US Council noted that a 1986 draft of the report contained “much biased and fallacious data and suggestions for massive over-regulation by governments and international organizations.” The draft repeated the “same old clichés and unbalanced approach to complex environmental factors we have been hearing from those who see environmental issues as means to further their own social, economic and political philosophies.”Footnote 82 It urged the ICC to intervene.
The ICC was able to influence the final report through several channels. It expressed its concern during the public hearings organized by the WCED in several regions of the world. More importantly, Thomas McCarthy, chair of the ICC environment committee, was a member of the Industry Panel, one of the three panels established by the Brundtland Commission to comment on various drafts of the report. The ICC also had privileged access to some members of the commission, including Susanna Agnelli, an Italian politician and businesswoman who belonged to the family that owned the main Italian automobile manufacturer, Fiat. Her brother, Umberto, was a member of the ICC from the 1960s to the 1980s. The ICC's US Council had direct contacts with Ruckelshaus, the US member of the WCED.Footnote 83 Maurice Strong, also a commissioner, was not hostile to endorsing business interests; in fact, he had “become heavily involved in big business” after Stockholm.Footnote 84 Finally, the ICC was in regular contact with WCED Secretary-General Jim MacNeill, the former director of the OECD Environment Directorate. MacNeill had played an important role in advancing the OECD's agenda, which emphasized the importance of market mechanisms in defining environmental policies.Footnote 85
The ICC's efforts to influence the commission's work were worth the effort. “Following the extensive input made by the industry-based members,” McCarthy believed that “the ICC and business at large would be able to ‘live with’ the final report.”Footnote 86 Even if the ICC expressed some reservations about the final version of the Brundtland Report, on issues such as energy, it welcomed the publication of Our Common Future, stating that it addressed “significant issues which require the attention of industry, especially the concept of sustainable development.” It added that the business community should accept the WCED's proposition to cooperate with governments and international organizations “in fostering sustained economic growth consistent with environmental quality.”Footnote 87 As Sally E. Eden has stated, Our Common Future was indeed favorable to business interests; "the Brundtland Commission opened the door for the business perspective on sustainable development. Previously, within a no- or low-growth framework, business had difficulties influencing the agenda in a positive light.”Footnote 88
Self-regulation for sustainable development
The publication of Our Common Future was a huge success. However, as Iris Borowy emphasizes, “the broad acceptance of ‘sustainable development’ created a competition of who could ‘pin his or her definition to the term’ and thereby gain influence over future development decisions.”Footnote 89 The ICC participated in this competition. From 1988, it listed environmental issues as one of its three highest priorities. In a paper describing its strategy, it put forward that the “exact meaning of sustainable development is . . . highly debatable.” However, the organization believed that “business spokesmen must take part in such debates, and that they must be properly briefed so as to make a strong and positive contribution.”Footnote 90 In this competition, the ICC was able to build strong legitimacy in global environmental governance and thus gain significant influence. At the same time, there were tensions within the UN institutions, and UNEP was sidelined in the lead-up to the Rio Conference.Footnote 91
According to Pratap Chatterjee and Matthias Finger, during the 1992 Earth Summit in Rio, business and industry shaped the very way in which international environmental governance was considered as well as the boundaries of the definition of sustainable development.Footnote 92 They suggest a number of factors that account for the success of business and the ICC, foremost among which was the ICC's funding of the conference, its “global organizational structure,” and the fact that it was extremely well prepared. It is true that since the mid-1980s, the ICC had been closely associated with the UN's work in the area of environmental protection and was therefore able to nicely integrate the UN's call for sustainable development in environmental management practices. Briefly, three important dimensions of the ICC's strategy contributed to the organization's strong legitimacy: the operationalization of sustainable development; the initiation and coordination of business input into the major UN conferences that followed the publication of Our Common Future and led to the 1992 Earth Summit; and the creation of a dense business network promoting sustainable development.Footnote 93
As Dominique Pestre has revealed, in the years prior to Rio, the ICC developed a coherent conception of sustainable development that was applied to the internal management of the firm, a process that had begun almost twenty years earlier.Footnote 94 The ICC's Business Charter for Sustainable Development—which was prepared in 1988, was published in 1991, and then replaced the initial environmental guidelines—summarized the organization's conception of sustainable development.Footnote 95 The charter, partly drafted by the oil company Shell, was the business community equivalent to the “Earth Charter” called for by the WCED.Footnote 96 The Business Charter consisted of sixteen principles to help companies convert the vision of the Brundtland Commission into operational reality and “to demonstrate to governments and electorates that business is taking its environmental responsibilities seriously.”Footnote 97 It was thus important to establish policies, programs, and practices “for conducting operations in an environmentally sound manner” and to integrate them “into each business as an essential element of management in all its functions.”Footnote 98 When launching the charter, the ICC informed its members that its implementation was “essential for establishment of public credibility in order to reduce government tendency to over-legislate and to strengthen business influence on public policies.”Footnote 99
Concretely, the ICC's conception of sustainable development favored voluntary and responsible commitments in four key areas: a new management approach to the environment embedded in total quality management; the life cycle of process and products; environmental audits; and environmental marketing and labels.Footnote 100 On a more conceptual level, the concept as put forward by the ICC differed somewhat from the one developed by the WCED. Like Our Common Future, the ICC's Business Charter stressed the environmental aspects of sustainable development (for example, the necessity of managing the depletion of nonrenewable resources and minimizing the impacts of waste on ecosystem integrity). However, by stressing environmental aspects, the charter also “de-emphasize[d] social aspects, in particular intra- and intergenerational equity and the Brundtland emphasis on overwhelming priority to be given to meeting the needs of the world's poor.”Footnote 101
The ICC was also an integral part of the follow-up to the Brundtland Report. In 1990, the environment ministers of thirty-four countries of the UN Economic Commission for Europe (ECE) region attended the UN conference on sustainable development held in Bergen, Norway. As part of this conference, the ICC was asked to initiate and coordinate input from constituent businesses. Just before the conference, the ICC arranged the Industry Forum on Environment in Bergen that was attended by two hundred CEOs from all over the world who deliberated the environmental challenges facing their businesses, as well as their views on sustainable development. The forum concluded with an “industry agenda for action,” which the ICC later developed.Footnote 102
One year later, the ICC organized WICEM 2 in Rotterdam—the most important ICC event in 1991.Footnote 103 More than 750 representatives from industry, governments, and NGOs met to review the progress made in environmental management since the first WICEM in 1984 and to prepare for the 1992 Rio Conference. The message of the Rotterdam conference concerning international environmental governance was one of a strong commitment from industry to the principles of sustainable development, which could best be achieved by working within the framework of the market economy and through open trade. Therefore, the ICC advised governments to strengthen the role of the General Agreement on Tariffs and Trade (GATT) in encouraging fair trade principles and to prioritize self-regulation over command-and-control approaches.
At the 1992 Rio Conference, the ICC reiterated its position and expressed satisfaction that many of its recommendations had been taken into consideration by the UN. It also supported Agenda 21, the environmental action plan adopted by 182 heads of state in Rio.Footnote 104 External observers noted that the Rio Conference was a landmark success for multinationals. The final documents not only treated multinationals with a gentle hand “but extolled them as key actors in the ‘battle to save the planet.’”Footnote 105
Green business networks
The ICC's influence can also be explained by the fact that it was at the center of “green” business networks.Footnote 106 Since 1985, two institutions directly related to the ICC—the ICC environment committee and the International Environmental Bureau (IEB)—contributed to the elaboration of the organization's environmental management discourse. The ICC environment committee pursued its strategy of closely following UN environmental policies. It also created its Working Party on Sustainable Development, headed by Peter Bright, head of environmental issues at Shell (London), which interacted with the Brundtland Commission and later drafted the ICC Business Charter.
In 1985, one year after Versailles, Louis von Planta, CEO of CIBA-Geigy, put forward the project of an international bureau of environment.Footnote 107 This bureau, as he saw it, would be an “international clearing-house for the exchange of information on environmental management questions.”Footnote 108 Von Planta's proposal had been elaborated by a group of five other CEOs: Robert O. Anderson (ARCO), Louis Fernandez (Monsanto), Charles W. Parry (Alcoa), and David Roderick (US Steel). The support of Anderson, the other main promoter of the IEB, was especially important. During the 1960s and 1970s, Anderson had supported numerous environmental initiatives and was a known and respected figure among environmental organizations. His stature gave legitimacy to von Planta's actions to launch the IEB.Footnote 109
The bureau, which was created several months later, had two objectives. First, it was “concerned with the technological, managerial and operational aspects of environmental management rather than general and policy issues”; and second, it prioritized “responding to the needs of industrial enterprises.”Footnote 110 In comparison with the ICIE, which was launched more than a decade earlier, the IEB had other capabilities that helped to reinforce the legitimacy of the ICC's environment policy among its members and with international organizations and NGOs in general.Footnote 111
First, the IEB had no problems pertaining to membership. Multinationals, rather than business associations, founded and financed it. Indeed, its creation illustrated a new form of business lobbying, which had emerged in the 1970s and strengthened during the 1980s. Two of the four previously mentioned American CEOs who helped von Planta to launch the IEB, Parry and Roderick, were active members of the US Business Roundtable that had been created in 1972. This was not a coincidence. In the 1980s, under the pressure of public opinion, the US Business Roundtable shifted its environmental policy from one of “dogmatic opposition in the name of profits” toward a self-regulated and market-oriented one.Footnote 112 The creation of the IEB showed that the US Business Roundtable's European counterpart shared their environmental ethos. It is interesting to note that von Planta was in 1983 one of the founders of the European Round Table of Industrialists, modeled on the US association.Footnote 113
Business roundtables also constituted a new form of BIA, as self-selected CEOs of major corporations met at the continental level to develop greater political influence than they otherwise had in national- or sectoral-based business associations.Footnote 114 The creation of the IEB exemplified this new form of lobbying: the six CEOs who launched this initiative worked independently from the ICC. Faced with a fait accompli, and despite the reservations of its environment committee, the ICC finally agreed to integrate the IEB within its structure.Footnote 115 The creation of the IEB thus illustrated the increasing influence of multinationals within the ICC.Footnote 116
Second, the relationship between the UN—in particular, UNEP and the Brundtland Commission—and the ICC/IEB was much more cooperative than it had been in the 1970s. Over the course of a decade, the IEB became a key institution within the ICC and contributed significantly to the strengthening of a coherent environmental vision and set of practices. Through its staff's contacts with various international organizations, it reinforced the ICC's influence on the 1992 Rio Conference.Footnote 117
Third, by providing services to firms around the world, the IEB enlarged the scope of the ICC's environmental activities, which were no longer restricted to Western multinationals.Footnote 118 As a result, the IEB reinforced the global dimension of the ICC. In the second half of the 1980s, national ICC committees from the Global South participated in the development of the organization's sustainable development strategy. The twenty-ninth ICC congress, held in New Delhi in 1987, placed special emphasis on environmental topics. In his opening discourse, Indian Prime Minister Rajiv Gandhi addressed the issue. A session called “Combining Economic Growth and Environmental Progress” featured presentations by Tolba (UNEP) and Syed Babar Ali (Pakistan). The latter was particularly significant, as he was an important industrialist who collaborated during the 1970s and the 1980s with the ICC in its attempt to prohibit the introduction by the UN of a binding code of conduct on multinationals. Babar Ali was also chair of the World Wildlife Fund.Footnote 119 In the 1980s and 1990s, discussions on sustainable development, whether within the Brundtland Commission or in other international organizations, were marked by strong tensions between representatives of the industrialized countries of the North and the countries of the South, the former refusing to finance the protection of the global environment, which, according to the latter, could be a threat to their ability to develop.Footnote 120 By contrast, the national committees of the ICC from the West and the South promoted a sustainable development strategy that called for self-regulation and less state intervention.Footnote 121
From 1990, the ICC also received the support of the Business Council for Sustainable Development (BCSD), which was closely but indirectly associated with the ICC. In February 1990, UN Secretary-General Javier Pérez de Cuéllar appointed Maurice Strong as Secretary-General of the 1992 Rio Earth Summit. One of Strong's first decisions was to appoint Stephan Schmidheiny, a Swiss industrialist close to the ICC and the IEB who had developed an early interest in environmental management issues, as his special adviser. Strong gave Schmidheiny two assignments: he was to act as the representative of business at the Rio Conference and to encourage and promote a broad expansion of interests in sustainable development in business and industry.Footnote 122 In his new role as special adviser, and with the help of Edgar S. Woolard Jr., chair of DuPont, Schmidheiny created the BCSD with forty-eight business leaders from around the world. The BCSD published a book for the conference titled Changing Course: A Global Business Perspective on Development and the Environment, which presented the business conception of environmental governance at the corporate and international levels.Footnote 123
A division of labor developed between the ICC and the BCSD. In the introduction to the book From Ideas and Actions, which the IEB presented in Rio, IEB director Jan-Olaf Willums, explained that the BCSD had “conveyed a vision of direction and a call for action,” while the role of the IEB was “to transform a vision to reality.”Footnote 124 Moreover, some BCSD staff had worked for the ICC or the IEB in the 1980s, including former ICC Secretary-General Hugh Faulkner, whom Schmidheiny hired. However, there emerged some tensions—the origins of which are not clear—and in 1992 the ICC founded a new organization “to lobby on environmental issues for business interests”: the World Industry Council for the Environment (WICE).Footnote 125 The two organizations, which had distinct models—WICE was based on a corporate commitment and BCSD on a CEO commitment—finally merged in 1995 to form the World Business Council for Sustainable Development (WBCSD). This new organization would soon become a leading promoter of corporate environmentalism worldwide.
In addition to the BCSD, the ICC also worked closely with another organization, the Global Environmental Management Initiative (GEMI).Footnote 126 In 1989, the US Business Roundtable created the initiative to promote essential tools and measurement systems in the United States and the wider world that would increase the efficacy of firms’ sustainability performance. It included nineteen US multinationals and was related to the ICC as it was administered by the United States Council Foundation, the educational arm of the US national committee of the ICC. As one of its first projects, GEMI participated in developing the ICC Business Charter for Sustainable Development. In 1992, it developed the Environmental Self-Assessment Program, designed to assess a company's progress in meeting the charter's sixteen environmental management principles. The program was intended to improve environmental management systems throughout business organizations.Footnote 127 This process of accountability lent a great deal of legitimacy to the ICC Business Charter, as it constituted an external verification of the environmental performance of firms that had adopted the charter.
During the 1980s, a transnational community emerged from interactions across borders and institutions—business associations, on the one hand, and international environmental organizations, on the other—oriented around a common project.Footnote 128 Indeed, these “green” business networks, for all their differences, had one point in common: their faith in sustainable development based on self-regulation and voluntary codes.Footnote 129 This transnational community generated economic and management concepts that reflected a new consensus on the liberal economic order that triumphed in Rio. However, “there remains considerable heterogeneity between members” of these transnational communities.Footnote 130 Indeed, some of the multinationals active in the promotion of sustainable development belonged at the same time to networks that were far from environmentally friendly. As Geoffrey Jones explains, multinationals “are complex organizations which can make both sustainability improvements and greenwash at the same time.”Footnote 131 Shell, the Anglo-Dutch oil multinational, is a good example.
Shell was heavily involved in the ICC's environmental turn during the second half of the 1980s. Peter Bright, the company's head of environmental issues in London, was a member of the ICC's environment committee since the mid-1980s. In 1988, as chair of a small ICC Working Party on WCED follow-up, he reported that the working party believed “the concept of sustainable development and the political strength of environmentalist or ‘green’ ideas were steadily growing in importance. It was highly desirable for the business community, through inter alia the ICC, to take a pro-active leadership position in facing up to this trend.”Footnote 132 This position was not completely shared by his firm; in an internal review, some Shell managers estimated that the Brundtland Report was “overly optimistic” in its attempt to combine environmental protection and economic growth.Footnote 133 Bright was thereafter appointed chair of the ICC Working Party on Sustainable Development, which elaborated and disseminated the Business Charter. Shell's commitment was not restricted to the activities of Bright. The president of Royal Dutch Shell, Lodewijk C. van Wachem, was one of the European CEOs who joined Schmidheiny's BCSD. The firm also became one of the founding members of WBCSD.Footnote 134
However, until the mid-1990s, Shell's environmental commitment remained modest. It was only after 1995 that the company seriously attempted to incorporate environmental considerations into its decision-making after two incidents had damaged its reputation: the dispute with Greenpeace over Brent Spar, a floating oil storage facility in the North Sea, and public complaints made by an ethnic minority in Nigeria against the environmental damage caused by Shell.Footnote 135 Moreover, still in the early 1990s, Shell strongly opposed any measures to combat global warming. Along with other oil firms, it promoted “skepticism” and disputed the seriousness of climate change.Footnote 136 First, Shell financed the works of famous scientists to manufacture uncertainty. Three journalists have shown how Shell was the main funder of the activities of Frits Böttcher, a prominent climate denier who was highly regarded in the Netherlands as the cofounder of the Dutch branch of the Club of Rome.Footnote 137 Second, Shell was among the founders of the Global Climate Coalition, a front group designed to combat the evidence of climate change. The firm was, in this capacity, a player in minimizing the influence of the Intergovernmental Panel on Climate Change that UNEP had established in 1988. It was only in 1998 that Shell left the Global Climate Coalition.Footnote 138
Conclusion
The 1970s and 1980s saw a profound transformation in global environmental governance, which gradually adhered to a liberal environmental vision that emphasized economic growth, market forces, free trade, and a withdrawal of the state. International BIAs have played an important role in this process. The ICC, which was sidelined in the debates on the environment in Stockholm in 1972, gradually managed to establish itself as a key partner of the UN by the 1990s.
After the Stockholm Conference, competing views on how to create feasible national and international environmental governance frameworks were at stake. What the ICC feared most was that UNEP would encourage national governments to implement new regulations that severely complicated international trade, transnational business operations, and ultimately economic growth. The point in question was the risk of disharmonized regulations between countries. Yet the ICC struggled in the 1970s to legitimate its voice in the UN arena and to establish itself as an expert organizational body that possessed the experience and knowledge necessary for international environmental policy discussions. The ICC's early arguments about business self-regulation as an alternative governance mechanism to government interventions had little impact, and its initial environmental guidelines, released in 1973, were barely noticed by the business community or by international organizations. What happened between the early 1980s and the 1992 Rio Conference is a different story, one in which the transformation of the guidelines mirrors the ICC's growing importance in global governance during this period. A broad legitimacy of the ICC's self-regulating guidelines was achieved not only because they were endorsed by the UN but also because of the ICC's global organization, its far-reaching networks, and the financial power of its members.
Two important prerequisites for the ICC's success in institutionalizing self-regulation in international business and global environmental governance were the macro ideological shift in the 1980s and the very concept of sustainable development. First, initial discussions in the early 1980s encouraged visions and policy formulations that relied on market mechanisms and private-sector initiatives. The neoliberal ideological shift that appeared with the Reagan and Thatcher administrations encouraged a broader role for the private sector in international forums, which worked in favor of collaborative initiatives between the ICC and UNEP. At the same time, the ICC's argument that more growth, not less, would result in environmental improvements through technological fixes started to gain acceptance. This conceptual shift from the “no- or low-growth” framework of the 1970s to “sustainable development” was clearly manifested at the WICEM “peace conference” in Versailles in 1984, when UNEP and the ICC agreed that inherent conflict between growth and environmental protection was a misconception.
The new definition of growth under sustainable development resolved many of the previous deadlocks in the UN arena between rich and poor countries while also enabling business and governments to reach consensus on a way forward. This more optimistic view on the relationship between growth and the environment helps to explain the gradual legitimation of self-regulation as an alternative to governmental interventions, as traditional business motives, market forces, and environmental protection could be aligned within this new growth-friendly discourse.
Second, as this article has shown, the ICC's role in constructing the concept of sustainable development was not negligible. The ICC was by no means an external actor when the Brundtland Commission developed its report; they were to an extent members of the same transnational community. The ICC succeeded by selectively adopting the notion of sustainable development and combining it with environmental standards and rules that could be implemented within companies. This ability to articulate a market-driven vision of global environmental governance with “sustainable” practice that could be applied to the management of firms enabled the ICC to convince a growing number of companies of the soundness of its self-regulation standards. It also convinced international organizations, environmental NGOs, and national governments of the need to transfer some of the state's environmental responsibilities to business. The problem is that this conception of sustainable development allowed for incremental greening, which did not reflect the real need for measures to prevent an ongoing environmental crisis from worsening, including climate change.
Ann-Kristin Bergquist is associate professor in economic history at Umeå University, and from April 1, 2023, professor in economic history at Uppsala University, Sweden. Her research focuses on the history of business sustainability and environmental governance. Among her recent publications are “Renewing Business History in the Era of the Anthropocene” (Business History Review, 2019) and “Safe before Green! The Greening of Volvo Cars in the 1970s–1990s” (Enterprise & Society, 2021), with Mattias Näsman.
Thomas David is professor of international history at the University of Lausanne. His research focuses on the actors shaping global capitalism in the nineteenth and twentieth centuries, particularly economic elites, corporate networks, and business associations. He is currently working on a book manuscript, Business of the World, Unite! The International Chamber of Commerce and Global Capitalism in the Twentieth Century, with Pierre Eichenberger, which traces the role of business in global economic governance since 1919.
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