To achieve 'green growth' a dramatic shift in the governance of business is required and understanding the complex risk equation that lies at the heart of green growth is essential to bringing about such change.
To achieve ‘green growth’ a dramatic shift in the governance of business is required. Understanding the complex risk equation that lies at the heart of green growth is essential to bringing about such change. This equation involves risks beyond the actuarial challenges associated with reducing carbon emissions to socio-cultural and political risks. In particular, the dependence of government fortunes on traditional industries and the ever-pressing need to pursue economic growth (a central feature of political risk) thus far have failed to adequately support nascent attempts to ‘green’ the economy. From a regulatory perspective, at centre stage here are not so much traditional forms of governance but what might be understood as regulation through reward. This paper analyses one particular aspect of the governance of rewards, those found in the form of loans and guarantees given by government to export businesses through Export Credit Agencies (ECAs), and in particular the Australian Export Finance and Insurance Corporation (EFIC). The importance of resetting the relationship between government and business as a target for reorientating growth has not been lost by environmental NGOs. Recent NGO activism in the United States has been aimed at increasing the transparency of export credit activities in order to better assess business compliance with their environmental and social responsibilities. This has seen some success, with Ex-Im, the US ECA, now required to take steps towards funding business in a manner consistent with ‘green growth’.