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Multi-Stakeholder Collaboration in Global Governance

6 March 2018

An interview with Ann Florini, currently Professor of Public Policy at the School of Social Sciences, Singapore Management University (SMU).

Ann Florini

What do you think are the most relevant recent experiments in multi-stakeholder collaboration in global governance? 

There are so many that there is no way to pick just a couple. It is important to recognise that the world as a whole has adopted the idea that collaborative governance is the way a lot of global problems ought to be solved. Probably the most important development was the adoption of the UN Sustainable Development Goals (SDGs) in 2015, with Goal 17 specifically saying that the way we are supposed to end poverty and hunger by 2030 is through multi-stakeholder collaboration. 

Why is public policy delivery also a responsibility of the private sector and what drives businesses to accept or reject these new responsibilities?

This is a really important question. For a couple of decades now, businesses have been pushed to take more responsibility for delivering public goods and internalise the externalities they impose on society. It started with globalisation in the 1980s and 1990s: we were getting massive environmental problems like climate change, businesses were accused of complicity in human rights violations on a large scale, and it became increasingly clear that governments were not creating a regulatory framework that was working. So businesses came under a lot of social pressure to get their act together. 

We have moved passed that stage now. Businesses have come to realise that paying attention only to financial returns essentially means that their markets, their supply chains, and their natural resources simply are not going to be available in the future - and not at some point in the distant future but in five to ten years from now. So a company like Unilever, which has positioned itself as a global leader in the sustainability space, did not start doing so because they are nice (although I am sure they are) but because they looked at their future market and said: "Our market is going to disintegrate if we continue to do business as usual." That message has started to resonate much more broadly. 

The SDGs have helped because they use specific targets. If business leaders did not understand before what they were supposed to do differently, they can now look at the SDGs and say: "We are supposed to clean marine debris by year x, we are supposed to change this supply-chain model, and here is how." It fits the business mentality. And businesses have shown a rising interest in engaging with the SDGs. However, it is still too early to tell how much of this is just lip service and whether it is actually changing business models.  

Recent international developments such as the 'Ruggie Principles' (on Business and Human Rights), the Paris Agreement, and the SDGs provide an innovative framework for multi-level governance. However, critics point out the difficulties related to the enforcement of these goals and are sceptical about business self-regulation. What are your thoughts?

Business is not going to self-regulate unless we change incentives. So, the Ruggie Principles, for example, will not promote actual behavioural change if financial incentives do not change. They will remain a matter of legal compliance, meaning that businesses will ask "have we checked this box?" rather than "how are we actually interacting with the human rights agenda?" 

This is not the fault of business people, who do not want to intentionally violate human rights. They need incentives to focus attention on these issues. If it is all about legal compliance, you are not going to get very far. If you really want significant behavioural change, you either have to formalise regulation or you have to relieve some of the pressure for short-term financial performance, which is something that is starting to happen. 

Has the approach to environmental issues adopted by the Trump administration damaged the Paris Agreement governance model? Or does it pave the way for the emergence of China as a future leader in environmental governance?

I think when you look at what Trump has done to the climate agenda, it is important not to focus just on China and other national governments, but at the broader social reaction it has triggered. It is also important to know that Trump has not actually withdrawn from Paris - he cannot do that. The agreement was crafted very intelligently: parties cannot withdraw for four years, which means that the US would not actually be out until after the next election. Unfortunately, that is before the next inauguration so Trump could formally pull the US out then. 

Yes, all of this makes China look a lot better but, even more importantly, look at what networks of cities and states, particularly California, are doing. California is acting on climate change as though it is an independent country, including by convening representatives from national and subnational governments and others. And people are responding to these initiatives because they want leadership. California is big enough to take on such a role. 

In addition, there is a massive pushback from the business sector in the US because they understand that climate change is real and that their business models are threatened by its impacts. They also realise that if the US fails to take climate change seriously, it is going to be left behind in the technological revolution that is already under way in this area. 

So, it is certainly harmful to have US national policy not pushing that agenda ahead, but it is not catastrophic because so many people are simply ignoring the change at the national level. Green technologies are hitting a turning point. The Trump administration may cause the US to be left behind on some of this, but an awful lot of technological innovation in the country is not dependent on the federal government. 

How is the Asian region responding to the pressure for better CSR standards? What are the similarities and differences with the West? 

The political economy of the Asian market is very different. In general, businesses in Asia are much more likely to be state-owned or in the hands of large family conglomerates. Public ownership is much less widely distributed. That does not necessarily mean that the behaviour of businesses is more socially responsible, but they certainly do not have as much pressure to increase short-term returns as Western multinationals have. Some of the governments who own these state-owned enterprises, particularly China and Singapore, are starting some interesting initiatives on promoting a broad sustainability agenda. Singapore, for example, released a set of reports in November 2017 on how to transform the financial sector. The focus is not on having a few green bonds but on how to re-regulate the entire financial sector such that it supports the transition to sustainability. The idea behind this is simple: What is the purpose of a financial sector? Is it to allow people in finance to get rich? That is basically the Anglo-American model (although it is changing in Britain). Or is the purpose of the financial sector to provide a service that enables economies to serve human interests? That is very much the Chinese model. 

This interview has been conducted by Giulia Ragosa, MSc Global Governance and Ethics. 

Ann Florini is currently Professor of Public Policy, School of Social Sciences, Singapore Management University (SMU). As of July 2018, she will be Visiting Professor, University of Maryland School of Public Policy. Professor Florini has spearheaded numerous international projects focused on innovative approaches to global problem-solving and governance, including the Study Group on Global Energy Governance at the National University of Singapore (2009-2011), the Global Governance Initiative on behalf of the World Economic Forum (2000-2005) and the International Task Force on Transparency, Initiative for Policy Dialogue, Columbia University (2000-2005). Before joining SMU, she was the founding director of the Centre on Asia and Globalisation at the National University of Singapore (2006-2011) and Senior Fellow at the Brookings Institution (2002-2012).