www.corp2020.com @Corp2020 Swedbank, Stockholm 26 th September 2013 The Increasing Importance of Ecosystem Services Pavan Sukhdev Study Leader – TEEB CEO – GIST Advisory
www.corp2020.com @Corp2020 Courtesy : Yann-Arthus Bertrand, GoodPlanet
www.corp2020.com @Corp2020 About Rainforests and Rainfall…. • http://www.vets.ucar.edu/vg/T341/index.shtml
www.corp2020.com @Corp2020 Amazonia: Economic Invisibility of Freshwater A mazon Rainforest “ Water Pump ” Evapo-transpiration puts 20 billion tonnes of water into the atmosphere daily, some of which falls as rain in the Rio Plata Basin… supporting a US$ 240 billion agricultural economy (Global Canopy Programme 11/29/2013 & Canopy Capital Ltd, 2008)
www.corp2020.com @Corp2020 For Poverty Reduction Indonesia India Brazil 21% 10% 16% Ecosystem services as a 90% % of classical GDP 79% 84% Ecosystem services 99 million 352 million 20 million dependency 47% 11% 25% Ecosystem services as a 53% % of “ GDP of the Poor ” 75% 89% Ecosystem services Source: Gundimeda and Sukhdev, TEEB for National & International Policy 29.11.2013 5
www.corp2020.com @Corp2020 For Business.. Dependencies Opportunities • Climate stability • Green Carbon • Agri-productivity • Bio-mimicry • Materials • Cradle-to-cradle • Medicines • Etc etc • Etc etc Impacts Risks • Emissions • Business Disruption • Land Use Change • Resource Prices • Freshwater • Social Licence to Operate… • Etc etc • Etc etc
www.corp2020.com @Corp2020 The Risk Picture…
www.corp2020.com @Corp2020 The Risk Picture.. • Negative externalities of top 3,000 companies estimated at US$2.15 trillion per annum Source: Trucost for UNPRI, 2010.
www.corp2020.com @Corp2020 Negative Corporate Externalities ….. Top 3,000 Listed Companies Source: Trucost for UNPRI, 2010.
www.corp2020.com @Corp2020 ….. Pushing Planetary Boundaries Greenhouse Gases Greenhouse Gases Natural Natural Resources Resources Natural Resources Water Abstraction
www.corp2020.com @Corp2020 What will drive change? Macro Issue Micro Driver Micro Solution Culture of Ethics & Consumerism Excessive Demand Accountability in Fuelled by Advertising Marketing/ Advtg Limit Underpriced Supply Unlimited leverage Leverage/capital adequacy/etc. Underpriced Resource Taxes resources Resource Depletion replace corporate (Low royalties / taxes perverse subsidies) Measure & Disclose Public Capital Losses Externalized costs Externalities
Why Stakeholder Reporting? www.corp2020.com @Corp2020 Business today depends on, and/or has impacts on, ALL dimensions of private & public wealth ͙ but.. EXAMPLES Physical Capital Human CapitalSocial Capital Natural Capital - Factories - Health - Gardens Private - Buildings - Education - Fields Ownership - Securities - Job Skills - Forests - Cash - Community - Traditional - Community - Community Community Centres knowledge Norms and Forests Ownership * - Community Customs - Grazing (club goods) Schools Commons - Public - Law & Order - High Seas Public - Roads databases - Taxation fisheries Ownership * - Bridges - Non-patent - Social Equity - National (public goods) knowledge & Inclusion Parks/ Forests * Creating community wealth and public wealth creates “ shared value ”
Why Stakeholder Reporting? www.corp2020.com @Corp2020 Business today generally measures & reports only shareholder wealth impacts: private physical capital EXAMPLES Physical Capital Human CapitalSocial Capital Natural Capital - Factories - Health - Gardens Private - Buildings - Education - Fields Ownership - Securities - Job Skills - Forests - Cash - Community - Traditional - Community - Community Community Centres knowledge Norms and Forests Ownership - Community Customs - Grazing (club goods) Schools Commons - Public - Law & Order - High Seas Public - Roads databases - Taxation fisheries Ownership - Bridges - Non-patent - Social Equity - National (public goods) knowledge & Inclusion Parks/ Forests
Why Stakeholder Reporting? www.corp2020.com @Corp2020 Business for a sustainable tomorrow - will measure & report on LL dimensions of its impacts ͙ EXAMPLES Physical Capital Human CapitalSocial Capital Natural Capital - Factories - Health - Gardens Private - Buildings - Education - Fields Ownership - Securities - Job Skills - Forests - Cash - Community - Traditional - Community - Community Community Centres knowledge Norms and Forests Ownership * - Community Customs - Grazing (club goods) Schools Commons - Public - Law & Order - High Seas Public - Roads databases - Taxation fisheries Ownership * - Bridges - Non-patent - Social Equity - National (public goods) knowledge & Inclusion Parks/ Forests
www.corp2020.com How Stake Holder Reporting? GIST 360 o TM Assessment.. @Corp2020 Financial Natural Value Capital Addition Externalities Human Social Capital Capital Externalities Externalities Measuring “ Value Addition ” holistically, including all material Externalities
www.corp2020.com @Corp2020 Disclosing Externalities : PUMA PUMA Press Release, November2011
www.corp2020.com @Corp2020 Accountable Advertising : PUMA
www.corp2020.com TEEB for Business @Corp2020 Coalition: Measuring, Valuing, Disclosing Externalities WBCSD… TEEB for GRI… Business IIRC, SASB, & CEF… Accountancy Coalition CDP, WDP… Regulators & Network Quantifying Disclosing Standardizing & Usage, Discovering Impacts in Valuing Depend-encies & “ One Report ” Impacts Impacts Emissions /tCOe Economic Costs of Framework for Freshwater / CuM Emissions, Integrated Reporting of All Externalities… Forests LUC / Ha Freshwater Pollution / … Use, Deforestatio incl Social & Human Waste / … n, Capital.. Pollution, Waste … (Value Chain Impacts “ Cradle to Gate ” )
www.corp2020.com TEEB for Business @Corp2020 Coalition: Measuring, Valuing, Disclosing Externalities ‘ TEEB4BC ’ Report (15 th April 2013) on Measuring & Valuing Externalities by Business Sector & Region….. www.teebforbusiness.com
www.corp2020.com @Corp2020 Corporation as “ Community ” : Natura Greater Economic Security for Women http://totallybeautyaddict.fr/mon-jolieapero-chez-natura-brasil/ Source: http://www.managementexchange.com/story/innovation-in-well-being
www.corp2020.com @Corp2020 Alessandro Carlucci Pavan Sukhdev CEO, Natura Author, “ Corporacao 2020 ”
www.corp2020.com @Corp2020 What will define a “ Corporation 2020 ” ? – Social Purpose: Goals Aligned with Society – Capital Factory: Positive Externalities – Institute: Creating Human Capital – Community: Creating Social Capital
www.corp2020.com @Corp2020 In Summary : Reforms for “ Corporation 2020 ” to become the DNA of Business Accountable Advertising : Making advertising responsible & accountable via norms & standards Limiting Leverage : Introducing rules & limits to govern financial leverage Resource Taxation : Replacing Corporation Tax (profits) with Taxes on Resource Use & Extraction Disclosing Externalities : Measuring & disclosing all major corporate externalities (+ve & -ve) From : www.corp2020.com Source: Why Corporation 2020?, Island Press, 2012
www.corp2020.com @Corp2020 Thank You ! Pavan Sukhdev www.gistadvisory.com www.corp2020.com
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