CBI makes case for voluntary action on environment

Voluntary action by business can often be more effective than regulation as a means of achieving environmental goals, the Confederation of British Industry (CBI) told the House of Commons Environment Committee in March. But its argument was weakened by the chequered response from business to several voluntary initiatives.

On 23 March, the Committee took evidence on the environmental responsibilities of industry from John Cridland, the CBI's Director of Environmental Affairs, Claire Craig, head of the CBI's environment group, and John Wybrew, Shell UK's Planning and Public Affairs Director.

The CBI was keen to stress the benefits of voluntary initiatives. "We've never argued that voluntary action can replace regulation - there must be a judicious balance," said Mr Cridland. He called on the Government to set goals and a hierarchy of appropriate measures in its environmental policy. "If these can be delivered without regulation," he said, "then that is better on all counts."

Mr Cridland highlighted the packaging waste recovery plan developed by the Producer Responsibility Industry Group (PRG) as "a test case to demonstrate that voluntary action can deliver more than regulation" (ENDS Report 229, pp 18-21 ). However, MPs pointed out that PRG had called for statutory backing for the plan to prevent "free-riding" by sections of industry.

The Committee asked Mr Cridland to clarify areas in which the CBI considered legislation to be appropriate. In response, he drew "a distinction over whether it is imperative that a standard is adhered to". In the case of PRG's plan, he was "pleased that business had the courage to say that legislation may be necessary to make it stick". However, measures which affected environmental management should be voluntary as "it is acceptable to have some laggards - the market always has winners and losers."

In other areas where the emphasis has been on voluntary action, the CBI's case was somewhat undermined by industry's reluctance to rise to the challenge. Mr Wybrew described the Government's "Making a Corporate Commitment" campaign, through which firms are invited to set energy saving targets and report publicly on their performance, as "a powerful stimulus to action - more so than bureaucratically imposed solutions". However, the Department of the Environment recently revealed that just 30 of the 1,500 or so companies which have signed up for the campaign submitted details of their targets when asked to do so (ENDS Report 229, p 26 ).

Similarly, only 200 firms have signed up to the CBI's Environmental Business Forum - well below the target of 1,000 set for the start of 1994 (see p 3 ). Mr Cridland conceded that he was "disappointed" with the uptake, but said that the Forum "could easily have over 1,000 firms if we were to loosen the requirement for public reporting. The problem is not that companies have things to hide, but rather genuine reservations about going over the parapet." The CBI is now working on guidelines on environmental reporting.

Responding to the charge that many environmental reports are simply "glossy brochures", he acknowledged that "it is certainly a danger and there have been examples of that. But industry is very responsive to best practice which sets the pace."

Finally, the CBI expressed some reservations about BS7750, the new environmental management systems standard. Mr Cridland said that few CBI members have sought certification so far - "one or two firms that have put their head over the parapet have come a cropper", while "others want to do it when they have something credible to say".

Dr Craig added that smaller businesses feared that BS7750 may prove too demanding for them. "Some firms feel BS5750 has rebounded on them," she said, "and with some problems in the pilot programme, there is greater uncertainty in the membership over the benefits of BS7750 than a couple of years ago."

For some time, the Government has promised a move towards the use of economic instruments in place of regulation. However, the CBI's support for the idea was lukewarm. It opposes the idea of a landfill levy, and "would have to look very carefully" at forthcoming proposals on sulphur emissions trading (see pp 36-37 ). Mr Cridland stressed that before an instrument was adopted, it was important to assess its likely impact on competitiveness.

A strong theme in the CBI's evidence was the need for an integrated approach to policy-making. Mr Wybrew said that "too often regulation and policy is additive and incremental without regard to the effect of each item on the whole". Dr Craig welcomed the move to compliance cost assessments for new legislation, but accepted the difficulties of obtaining meaningful data.

Some of the biggest arguments in this area have been over HM Inspectorate of Pollution's application of integrated pollution control. Mr Cridland told the Committee that "improved relations between HMIP and industry are a sign that the tide is going in the right direction. There is now a maturity of approach in inspectors' requests." However, the CBI is "very concerned over the inconsistent application" of local authority air pollution control, and promised to supply the Committee with examples.

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