Why plastic bag bans are bad news for business

The grass roots campaign to ban the plastic bag, that all too powerful symbol of consumer waste and environmental degradation, is on the march.

According to a recent article in The Guardian the trail-blazing Devon town of Modbury has enjoyed such success since it effectively banned plastic bags from its shops six months ago that 50 other towns, cities and villages are now working on similar initiatives.

Most notably Hebden Bridge has already followed Modbury as the second town in the UK to stop handing out plastic bags in its shops, while the 33 boroughs of London have proposed a ban on all disposable plastic bags from 2009. Meanwhile, Mull, Arran and Guernsey are racing to become the world's first plastic bag free island.

All of this has to be A Good Thing. The UK alone uses 17 billion plastic bags a year, the vast majority of which are made primarily from oil and take centuries to decompose. What is more, as the success of the Modbury experiment has proved they are surprisingly easy to live without and a ban can provide an important rallying point for future community-based environmental initiatives.

However, while no business is going to openly criticise such admirable grassroots movements for fear of being branded an uncaring faceless corporate monster even those firms committed to environmental sustainability will be forgiven for not jumping for joy at the prospect of further plastic bag bans and, more importantly, the trend towards locally-conceived environmental legislation that they signify.

There will be plenty of national retail chains who have adopted wide-reaching green initiatives and may even support a ban on plastic bags in principle that will still be inwardly furious at the town-by-town approach to plastic bag policy that appears to be gathering momentum.

Despite recent attempts by major retailers to highlight their links with local communities, such as Tesco's commitment to sourcing milk from farmers local to their stores, the overriding retail trend of the past fifty years has been one of centralisation - of stripping power from store managers and shifting decision-making and strategy development to head office.

Critics may blame this trend for the UK's increasingly homogenous High Streets but it has allowed retailers to slash costs and guarantee generally higher levels of service and product availability.

However, while this approach works when the customer and legislative landscape is broadly the same across the entire country it becomes something of a nightmare when head office has to account for a patch work of different laws and regulations.

It is easy to imagine strategists at all the UK's major retail chains having palpitations at the suddenly all too real prospect of having to develop different approaches for towns with an all out ban on plastic bags, towns with a ban on non-biodegradable plastic bags, towns with a tax on plastic bag use, and towns with no policy for plastic bags.

This scenario is of course a costly and annoying managerial headache rather than a full blown crisis, but it is also a working example of the current fragmentation of environmental legislation and the serious problems it could create for many of the world's largest businesses.

If individual cities, towns and villages can ban plastic bags there is little to stop them dabbling in other areas of environmental legislation, particularly when community-agreed bans don't even have to make it onto the statute books in order to prove highly-effective and potentially damaging to those businesses that do not comply.

For example, plans are also afoot for road pricing schemes in certain cities and counties, but not in others, while council strategies for waste reduction also offer something of a post code lottery.

This fragmentation of green legislation is playing itself out on a larger scale in the US where the void in environmental leadership at a federal level is being at least partly offset by plans for stringent new regulations in states such as California and New York and cities such as Seattle and Chicago. As with the local bag bans in the UK these proposals are openly admired and supported by many environmentally-conscious businesses but they also create a "patchwork quilt" legal scenario where major components of firms' environmental compliance strategies will have to change each time they cross a state line.

This trend is in complete opposition to the creation of a globally consistent legislative framework that has long been the (usually unstated) goal of multinational companies.

It is often said that business leaders hate legislation, but like footballers who seem to despise referees what they really hate are not the rules of the game but their inconsistent application. A more homogenous international compliance framework - whether it covers financial reporting or environmental standards - allows firms to slash compliance costs and risks and makes it far easier for them to execute global corporate strategies. It is little surprise that such legislative consistency has long been a corporate Holy Grail and has done as much to fuel corporate lobbying efforts as any inherent distaste for red tape.

The dilemma for business leaders now is how to react to this localised approach to environmental legislation. The current political vogue for devolved power and the idealisation of all things local and community-based means green rules spawned from grass roots campaigns such as Modbury's bag banning are largely beyond reproach. As a result any attempts to argue against such laws on the grounds they create a confusing and counterproductive compliance maze may be valid but they are likely to be given short shrift.

Instead, business leaders would be advised to take the diametrically opposite approach and realise that with such environmental grassroots movements gaining more and more momentum it is easier to create legislative consistency by encouraging national and international law makers to expand rather than oppose this new wave of localised green proposals.

For example, retailers may have to accept that it is easier to cope with a blanket ban on plastic bags than five or six different approaches dotted all over a country. Similarly, the more enlightened car manufacturers are beginning to realise that it may be easier simply to comply with Californian and European fuel efficiency regulations globally rather than keep chopping and changing engine design by region.

It is this understanding of the value of a more homogenous regulatory framework that also explains why many business leaders were hoping, albeit in vain, for signs from the UN's recent meeting on climate change and President Bush's controversial conference in Washington that a truly international agreement can be reached.

When it comes to grassroots, regional, or even national movements for environmental regulation the message is simple: you can't beat them, so you may as well join them.

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