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Why Effective Negotiation Is Critical To Our Future

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Sustainability is the megatrend of our time; a challenge that can leave us feeling powerless to bring about meaningful change. In this special feature, we explore the role that negotiation can play in effecting change and spotlight a plastic recycling initiative that is driven by collaboration and creativity.

By Dan Anderson Negotiation Consultant at The Gap Partnership

Seven years and 273 days. According to the highly publicized Climate Clock Project, that is how long we have left (at the time of writing) to transition the entire world from carbon-based energy sources to 100% clean, renewable energy. If we fail to hit this target, then warming will exceed 1.5 degrees Celsius above preindustrial levels and the worst effects of climate change will become irreversible, with devastating consequences felt by every single person on Earth for generations to come.

In addition to making this rapid transition to reduce our global carbon emissions, we need to concurrently take action on other areas of sustainability, such as increasing the number of rewilding projects to reduce biodiversity loss, and accelerating operations to clean up our polluted oceans. These actions are key factors in reducing climate change by creating healthy and balanced ecosystems and are required to preserve natural resources for future generations. 

When you take a moment to sit back and reflect on the sheer enormity of the challenge we face, it can at times be simply overwhelming. This is especially true when you consider just how little time we have left to reengineer huge parts of the global infrastructure that support our current way of life, not to mention the incredible number of cultural and geopolitical barriers that actively stand in the way of nations, businesses, and people working together to find sustainable solutions to currently unsustainable practices.

How can effective negotiation help us build a more sustainable global economy?

Compared with headline-grabbing news concerning new international sustainability targets, or the rollout of innovative new technologies, a focus on negotiation may not appear to be much of a priority versus the many other initiatives in place which aim to build a more sustainable global economy.

However, let us consider the process that all these sustainability initiatives and projects will need to undergo for them to move from concept to reality. Each will require people to sit down and negotiate an agreement (or indeed several agreements), many of whom will have very different opinions and underlying interests to contend with.

Much focus and discussion is rightly given to why we need to change current unsustainable practices, in addition to what changes are required, and when they need to be implemented. However, the exact details of how we implement the changes required can sometimes be overlooked, with the negotiation process forming a key part of this element.

Some negotiations will be globally significant in terms of their scale and impact and will feature a high degree of complexity and multiple different stakeholders. A good example would be the Paris Climate Agreement from 2015, which was eventually signed by a grand total of 175 different nations. At the other end of the scale there will be negotiations which are comparatively small and simple in nature, concerned with making a specific local practice or process more sustainable.

In terms of the driving forces to get all parties to the negotiating table, some negotiations will be brought on by mandated change resulting from new government or state legislation, whereas others will be business-driven change largely resulting from increasing consumer or customer pressures.

Regardless of the scale of these negotiations or the reasons behind them, all will come with their individual challenges. One common factor depending on the specific circumstances surrounding each negotiation, will be that the discussions will either be competitive or collaborative in their nature, as are all negotiations, broadly speaking.

At The Gap Partnership our belief is that neither type of negotiation is right or wrong. The type of negotiation you face into is determined by the unique circumstances surrounding the deal, in addition to where the perceived balance of power lies between the negotiation parties. It is incumbent on the negotiator to make an objective assessment on both factors ahead of the negotiation, so that they can adopt the appropriate behavioral strategy and mindset to optimize value.

However, when considering which type of approach would be most effective for these high-stakes negotiations focused around sustainability, only collaborative negotiation offers the opportunity to create incremental value in an agreement for both parties when dependency between parties is high. Given the number of barriers to change facing governments and businesses alike, there is strong evidence to suggest that extracting more value from current agreements will be necessary to suitably appease all stakeholders who will be affected by changing a particular process or industr practice.

Case study – COP24

In 2018 governments from around the world met in Katowice for COP24. The key objective was to agree on the specific guidelines that would allow the previously agreed Paris agreement to be implemented. One of the key areas that required alignment was ‘Article 6’, which concerned the development of a centralized and standardized framework for the purchase, trading, and reporting of carbon units by nations.

Initially the talks made good progress and alignment was found in many important areas as parties worked together to try to come to an agreement. However Article 6 remained a sticking point, and as the conference progressed the issue became increasingly isolated from the other points of discussion. As it became clear just how contentious it was for many nations, it was eventually decided that it would be discussed as a separate issue. This separation of Article 6 from the main agenda has been regarded as one of the key factors in the conference finishing without agreement. COP25 in Madrid also followed a similar pattern and has subsequently been viewed as a failure by many, given how important Article 6 is for implementing the wider agreement.

Complex negotiations often require us to think more collaboratively and broadly about the deal rather than just haggling over variables in isolation. By linking issues together, trading variables conditionally and repackaging proposals we increase the opportunity for more creative, value enhancing agreements and reduce the risk of a potential deadlock scenario.

Did negotiators take a different approach in COP26 in September 2021? The jury is out. Although arguably the geopolitical landscape was less favourable for reaching agreement than it was in 2018, the passing of time means the pressure on the deal that was struck is even higher.

During the past ten to fifteen years there has been much talk around “green growth”. The concept is simple: we can adopt sustainable strategies and practices to preserve the natural assets on which our current and future wellbeing relies, while also maintaining the strong economic growth and globalization that traditional (carbon-based) market development methods have yielded during the last century.

This idea epitomizes a win-win outcome; good for us, good for the planet. And there are plenty of examples of the fruits that have resulted from this way of thinking, such as the rapid growth of ecotourism or the development of the circular economy to name but a few. Some of these win-win opportunities are significantly harder to realize than others and require highly complex and creative solutions, but in all cases a suitable agreement will only be found if both parties adopt the appropriate behavioral strategy to engender trust.

Case study – World Trade Organization

There is widespread recognition that the health of our oceans has rapidly declined during recent decades, due

largely in part to unsustainable fishing practices and increasing pollution. The former is currently a highly contentious issue for many governments, as drastically reduced catches are resulting in a heavy dependence by fishing communities on government subsidies to maintain jobs.

Unfortunately, these subsidies maintain a destructive and unsustainable cycle, which will inevitably end with both the collapse of entire marine ecosys

tems and subsequently the fishing communities who depend on them.

The World Trade Organisation, (WTO) is now trying to introduce new rules concerning subsidies to shift this investment to support fishing communities in other ways, so that heavily depleted fish stocks have time to recover and can be fished sustainably. Previously the WTO has successfully negotiated global rules which limit government subsidies to industry and farming by adopting a collaborative approach between stakeholders. This gives hope to many that if these new rules can be agreed on, the health of our oceans will start to improve.

Understandably however, there is scepticism from these fishing communities around suggested changes to the subsidies as the stakes could not be higher; their entire livelihood currently depends upon on this funding.

This, therefore, means that if a deal is to be done, trust will be critical. If these communities are not able to realize alternative revenue then they will suffer dearly, and may even disappear altogether. Given this, if parties were to adopt a competitive mindset and behavioral strategy for these types of negotiations it would clearly result in failure, as there won’t be the appropriate climate of trust to come to an agreement.

So, if a collaborative approach appears more likely to result in a better outcome for these types of negotiations, what specific things can you do to optimize the potential value from your collaborative agreements and reduce the risk of deadlock?

Here are five things we should consider when negotiating sustainable agreements:

  1. How are you framing your negotiations?

A 2012 report by William Moomaw and Mihaela Papa suggested that one of the primary reasons climate negotiations have had limited success in the past is because climate change is viewed as a pollution problem, rather than recognizing that emissions are really the symptom of an underlying pattern of unsustainable development.

  1. Think creatively and remain open-minded to new ideas

Thinking “outside the box” is often where the biggest source of value can be found in negotiations! Are there potential synergies that could realize incremental value for both parties while also increasing the sustainability of a particular practice or process?

  1. Stakeholder alignment

High-stakes negotiations often feature a huge number of stakeholders. If all decision-makers in your party are not aligned to the strategy ahead of the negotiation this will significantly increase the risk of not reaching an agreement, so ensure that this features as part of your planning process.

  1. Empathize with their position to engender trust

When the stakes are high, it can lead to emotional reactions. Actively listening to the position of your counterparties and subsequently demonstrating empathy to their situation is a great way to build the appropriate climate for the negotiation, mitigate the risk of potential emotional reactions and quickly engender trust between stakeholders.

  1. Understand their priorities by asking questions and sharing information

In collaborative negotiation, we create value by assessing the relative cost and value of individual variables for each party so that we can then trade effectively for the mutual gain of both parties. Data concerning emissions or waste for businesses or governments could be considered sensitive and/or confidential and may therefore be held back, but to make existing processes more sustainable it is often in the interests of parties to share this data with each other so they can make informed decisions on the best alternative or solution.

Seven years and 242 days. This article is close to publication. And the clock has carried on ticking. For any one of us concerned about its steady, unstoppable march and who may feel compelled to act, in whatever context or capacity, then consider the skill of negotiation as one of the most critical weapons in your arsenal.

The Gap Partnership is the world’s leading management consultancy specializing in negotiation. Please get in touch if you would like to discuss how changing attitudes and policies concerning environmental sustainability are affecting the key negotiations facing your organization.