NEW ORLEANS - Environmental stewardship must not be viewed by business as a threat, but as an opportunity to increase competitiveness and at the same time help lay a solid social foundation that is essential for sustainable economic growth, declared IDB President Enrique V. Iglesias today.
"The private sector is moving away from the traditional view in which environmental requirements are seen as costs that reduce profitability," said Iglesias before the opening session of a seminar on the private sector and the environment. "There are many positive links between competitiveness and improved environmental performance," he added.
At the same time, private sector collaboration in protecting and improving the environment will have a major impact on efforts to reduce poverty, the IDB president continued. "Environmental problems fall disproportionately on the urban poor, poor farmers and indigenous people," said Iglesias. Measures to improve sanitation and reduce pollution from urban transit will help to improve living conditions in the cities, while better management of natural resources will help raise living standards in rural areas.
The seminar, which was held prior to the IDB’s Annual Meeting, included the participation of leaders from the private sector, government and private foundations.
Iglesias pointed to several innovative Bank-financed programs that enlist the support of the private sector in promoting environmental sustainability. One example is a sustainable development program in Panama’s Darien province, in which the paving of a key road will be accompanied by measures involving private farmers and business interests, along with indigenous peoples, to improve social conditions and economic opportunity while protecting the environment. In the Brazilian Amazon, an IDB-financed program will promote ecotourism as a means of promoting the preservation of biodiversity and natural areas.
In the seminar’s keynote address, Eugenio Clariond Reyes, president and CEO of Grupo IMSA, S.A., a major Mexican industrial firm, challenged government to create conditions under which the private sector can operate in a sustainable and environmentally responsible manner.
"There is no question that our greatest challenge as business people is the generation of wealth, jobs and opportunities," said Clariond, who also chairs Latin America’s Business Council for Sustainable Development. But he conceded that in the past businesses created serious, even "dramatic," problems. "We have already made enough mistakes to know that we have to do things differently," he said.
But in order to change course, business needs the right signals from government, he said. Clariond criticized fiscal systems that heavily tax "what is good for people," such as salaries, savings and wealth creation. Then, he said, the government turns around and uses that income to subsidize fuel consumption, the use of clean water and the use of pesticides.
"It is almost impossible to expect responsible use and preservation of our natural resources when their use is being subsidized," he Reyes. "We must never forget that a subsidy is an open invitation to overuse. Subsidizing the use of water and fossil fuels, and then expecting people to limit their use, is naïve and totally unrealistic. On the other hand, expecting people to invest in eco-efficiency when capital investment is being penalized through taxation seems equally contradictory."
Clariond closed by urging the IDB to exercise leadership to raising the profile of sustainable development as a priority area of concern for the region’s governments. "How many Latin American governments translate environmental rhetoric into real economic decisions? That is the issue, and it is certainly one where the IDB can exercise great influence," he said.