inside: Corporate Accountability – without a chance at Rio+20? Private sector companies can be transparency leaders
a multi-stakeholder magazine on climate change and sustainable development
out reach. 31 May 2012
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contents. 1
Paragraph 41 must not become another ‘Chapter 41’
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An equitable transition to the green economy? Indigenous involvement in payment for ecosystem service markets
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Corporate Accountability – without a chance at Rio+20?
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Private sector companies can be transparency leaders
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Integrating material sustainability information into corporate reports should be a key and critical outcome of Rio+20, urges ACCA
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Green Economy Principles: why we need them
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Sovereign wealth funds and sustainable investment
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A new economic paradigm: The next big challenge
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Rio+20: Will the UN Summit deliver on sustainable development?
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Reflections on the Negotiations – Wednesday 30th May
pic: AbbyLadybug
OUTREACH IS PUBLISHED BY:
About Stakeholder Forum Stakeholder Forum is an international organisation working to advance sustainable development and promote democracy at a global level. Our work aims to enhance open, accountable and participatory international decision-making on sustainable development through enhancing the involvement of stakeholders in intergovernmental processes. For more information, visit: www.stakeholderforum.org
Outreach is a multi-stakeholder publication on climate change and sustainable development. It is the longest continually produced stakeholder magazine in the sustainable development arena, published at various international meetings on the environment; including the UNCSD meetings (since 1997), UNEP Governing Council, UNFCCC Conference of the Parties (COP) and World Water Week. Published as a daily edition, in both print and web form, Outreach provides a vehicle for critical analysis on key thematic topics in the sustainability arena, as well as a voice of regional and local governments, women, indigenous peoples, trade unions, industry, youth and NGOs. To fully ensure a multistakeholder perspective, we aim to engage a wide range of stakeholders for article contributions and project funding.
If you are interested in contributing to Outreach, please contact the team (gmacdonald@stakeholderforum.org or acutter@stakeholderforum.org) You can also follow us on Twitter: @Earthsummit2012
OUTREACH EDITORIAL TEAM Felix Dodds
Stakeholder Forum
Farooq Ullah
Stakeholder Forum
Editor
Georgie Macdonald
Stakeholder Forum
Co-editor
Amy Cutter
Stakeholder Forum
Editorial Assistant
Jack Cornforth
Stakeholder Forum
Print Designer
Jessica Wolf
Jessica Wolf Design
Web Designer
Thomas Harrisson
Stakeholder Forum
Web Designer
Matthew Reading-Smith
Stakeholder Forum
Editorial Advisors
CONTRIBUTING WRITERS Diane Bouchacourt
Sovereign Wealth Fund Research Initiative
Daniel Mittler
Greenpeace International
Marco DeSena
Greenwashing The Facts
Kambiz Mohkam
Sovereign Wealth Fund Research Initiative
Veronica Frank
Greenpeace International
Helen Murphy
James Cook University
Richard Gledhill
PwC
Frederic Samama
Jessie Henshaw
HDS Systems Design Science
Sovereign Wealth Fund Research Initiative
Rina Kuusipalo
Stakeholder Forum
Kirsty Schneeberger
Stakeholder Forum
Jeannet Lingan
Stakeholder Forum
Catherine Skopic
Harold Ludwick
Aurukun Opportunity Hub
Michael Winer
Cape York Institute for Policy and Leadership
Paragraph 41 must not become Jeannet Lingan another ‘Chapter 41’ Stakeholder Forum Momentum is picking up for the corporate sustainability reporting proposal at the negotiations on the Rio+20 Outcome Document. We have yet to find out whether it is positive movement, but we can still hope. Yesterday's initial discussions on the new streamlined Co-Chairs' text – now paragraph 41 – was rather lively. The paragraph received more amendments than expected at this stage, which triggered Chair Kim's impatience as governments' were supposed to streamline and reduce the text, not add more. The amendments represented two main positions: a call to launch a process to support the implementation of national policies for large and listed companies to publish their sustainability reports or explain why they do not, and strong opposition against any proposal that would impose conditions on companies, keeping the conversation at the level of voluntary commitments for companies. Between amendments and brackets, the paragraph went from six to fourteen lines. The activity around these latest amendments can actually be viewed in a more positive light: governments now appear to be more engaged with this agenda than in the weeks before. After all, this could actually be one of the concrete and substantial outcomes from Rio+20.
When the new Co-Chair’s text was published last week, we were quite disappointed with what appeared to be a significant step back from the way things were left at the previous session three weeks ago. The Co-Chair’s new text seemed to be at a level of ambition similar to that of Rio 1992, when companies where encouraged (i.e. to voluntarily commit) to report on their environmental impacts. With the new text in paragraph 41 reduced yet again to simply encouragement for companies to include sustainability information into their reporting cycle it leads us to believe that little to no progress has been made in the last six months, let alone the last twenty years. And then there is the number. The new Co-Chairs' text for paragraph 41 also brought back some not so distant memories, reminding us of chapter 41, the ‘lost chapter’ of Agenda 21. In 1992, the now defunct UN Centre on Transnational Corporations prepared chapter 41 recommending that governments address the rights and responsibilities of transnational corporations in environmental instruments, and establishment or strengthening of a regulatory environment for sustainable development (I invite you to read Daniel Mitlers' article on page 3 for more details). This chapter did not make it into Agenda 21 and companies have had to mostly contend with voluntary initiatives. Let us hope that the current paragraph 41 does not follow the same path of (the lost) chapter 41 of Agenda 21. Twenty years later, some 75% of large companies do not report on sustainability indicators. We need to move forward if we are really committed to sustainable development. The proposal for a global framework to get large and listed companies to publish their sustainability reports (or explain why they cannot do so) is supported by both private sector groups and civil society. Furthermore, it is developing countries who are taking the lead by working with the stock exchanges or through national regulation requiring large and/or listed companies to publish their sustainability reports. Some OECD countries are doing this too. This cannot be another missed opportunity, especially as the process is in such dire need of substantial outcomes. Levelling the playing field on which corporations operate, and contributing effectively to the much needed transparency in the sector, is key to demonstrate results and real commitment
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pic: Michael Porter
RIO+20
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An equitable transition to the green economy?
Indigenous involvement in payment for ecosystem service markets Helen Murphy James Cook University
Harold Ludwick Aurukun Opportunity Hub
In the run up to Rio+20 there has been much focus on the green economy as a means to achieve sustainable development and poverty eradication. For indigenous groups, participation in the green economy is intimately connected with the need to protect their human and social rights as local stewards of ecosystems and biodiversity. In Australia in particular, there must be stronger recognition of indigenous rights to land, territory and resources, as well as respect for traditional knowledge systems and governance. Attempts currently being made to encourage indigenous peoples’ participation in the green economy without addressing weak land and property rights will only further strengthen current inequalities. Ongoing work by the Cape York Institute shows that current ‘green jobs’ for indigenous peoples in Cape York are mainly restricted to a small number of short-term government funded land management positions, while larger opportunities for participation are being lost. Currently, indigenous land owners in Cape York are largely prevented from participating in ecosystem services markets due to lack of security and certainty of indigenous landholding rights. This means that it is difficult to achieve the levels of permanence required to demonstrate ecosystem service benefits. Restrictions on indigenous land use imposed by complex legislation, as well as weak land rights, greatly devalue the potential for indigenous peoples to engage with the voluntary and potential mandatory market for carbon and ecosystem services. This ultimately results in indigenous land-owners being unable to use their sole remaining asset, land, for economic and social improvement of their communities. While it is recognised that improved social and welfare outcomes from payment for ecosystem services schemes are not necessarily guaranteed, we argue that well-designed indigenous-led approaches based on private sector participation may be the best opportunity to fund the real costs and effective management of regions such as Cape York. We urge the leaders at Rio+20 to ensure successful indigenous participation in the green economy through strengthening indigenous land tenure and property rights; through prioritising greater indigenous participation in land management; and by the incorporation of Payments for Ecosystem Services (PES) markets characterised by broad private investment into land management where appropriate. Successful transition to a green economy in a post-Rio+20 world relies on the integration of
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RIO+20
Michael Winer Cape York Institute for Policy and Leadership economic development and environmental sustainability. We welcome the opportunity to move away from natural resource management regimes based on insufficient, unreliable and short-term government funding. What we need now is a new approach based on the empowerment of indigenous communities, in Cape York, and around the world, so they can design and implement their own conservation approaches. We also need to trust them to conserve ecosystems and biodiversity on their lands, using a variety of methods, including private sector approaches if they so desire. If we want to continue current conservation regimes that are unable to properly fund environmental protection in areas such as Cape York; if we want to miss opportunities for social and economic development for indigenous peoples; if we feel comfortable imposing conservation regimes over indigenous lands without adequate indigenous participation or consent, then there is no need for change. However, if we see Rio+20 as a chance to develop approaches to the green economy that will be equitable for all, then we must ensure policy design and land reform that allows meaningful participation in the green economy by indigenous peoples. This means that significant policy changes addressing embedded inequalities will need to be made by governments. These policies will need to strengthen indigenous rights and interests and enable private sector approaches as part of a larger natural resource management system
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Corporate Accountability – without a chance at Rio+20? Daniel Mittler Greenpeace International
Twenty years ago, the power of corporations over governments was already mighty.
Ten years later, corporate accountability – in the wake of the Enron scandal – became one of the issues at Rio+10. A global civil society call for true accountability led to early drafts of the Rio+10 outcome text calling for a commitment to ‘launch negotiations for a multilateral agreement on corporate accountability’. This got watered down along the way (not least by the then Bush administration). But at Johannesburg, governments at least – and at last – acknowledged the need for global rules for global business. They pledged to ‘actively promote corporate responsibility and accountability... including through the full development and effective implementation of intergovernmental agreements’. May be it reflects the increasing rise of corporate power over the last twenty years (and in the wake of liberalisation), that this sort of language cannot be found in the drafts of the Rio+20 Outcome Document. The words ‘corporate accountability’ can be found in the latest Co-Chairs’ text, but in a manner that has nothing to do with holding anyone accountable for their social and environmental impact. Instead, the newest draft has even watered down the proposal for mandatory reporting by corporations. But a more positive change that has occurred since 1992 is that today it is mainly progressive investors and businesses that have been calling for improvements in corporate governance. Specifically, they are calling for a convention on mandatory corporate reporting. Despite the setback of the latest Co-Chair‘s text, I wish them luck in still having their voice heard and making at least this small step forward at Rio+20.
pic: vincent desjardins
Witness the fact that just a few months before the 1992 Rio Earth Summit, the only intergovernmental mechanism that had been monitoring transnational corporations – the UN Centre on Transnational Corporations (UNCTC) – was discontinued. Along with it went almost 15 years of work on the Code of Conduct on Transnational Corporations (TNCs), which attempted to spell out the rights and duties of TNCs and the rights of States to regulate them. While Principles 13 (Liability), 14 (Double Standards), 15 (Precautionary Principle) and 16 (Polluter Pays Principle) of the Rio Declaration all relate to corporate behaviour, governments failed to commit business to concrete actions to achieve sustainable development.
But today, even more so than 20 years ago, what is really needed is a global instrument to ensure full liability for social and environmental impacts of global corporations. While some corporations are willing to act, we need clear rules and penalties for those which try to free-ride and dump external costs on society. Just as it is unacceptable for tax payers to pay for the reckless gambles of greedy banks, it is irresponsible that the people of Japan, for example, are now having to pay for the financial fall-out of TEPCO´s (Tokyo Electric Power) irresponsible behaviour. It is adding financial insult to environmental injury. And the opposite should be the case: Whoever damaged people or the environment, should at the very least know that they will be held to account – including financially. With less than a month to go, it looks set that mandatory corporate reporting is the best outcome possible at Rio+20. But we as civil society, should unite once more like back in 2002 and call for “rights for people and rules for big business”
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RIO+20
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Private sector companies can be transparency leaders Marco DeSena Greenwashing The Facts
As governments and NGOs around the world strive toward setting real goals for global sustainability, it is important to acknowledge just how much traction this movement has gained within many of the world's largest transnational corporations. Many advocates – some in these very pages – have called for rules mandating that private sector organisations publish sustainability reports on their environmental impacts and policies in this area. Others, though few have taken a markedly negative approach, continue to collectively label private companies as ‘the problem’. They clamour not only for more reporting and transparency, but also punitive measures for non-compliance. There needs to be a better dialogue between the private and public sectors on this matter. To begin this exchange, sustainability advocates must recognise that, in fact, many corporations are indeed publishing sustainability reports that go far above any existing requirements. Although these reports often rely on largely anecdotal reporting and less than comprehensive emissions inventories, these companies need not only to be recognised, but applauded, for their path-finding transparency. This is the main reason why, last year, we started ‘Greenwashing The Facts’, a free online resource dedicated to helping readers evaluate the environmental records of Fortune 500 companies based on their own public ‘green’ claims, which we source from financial and regulatory disclosures and other available public reports. The hole we sought to plug was one of information. There are desperately few resources available for consumers, investors, or advocates to verify that a company's public claims about its sustainability measures are actually reflected its policies and not just its ideas. Our research consists of authenticating – to the best of our abilities – that what a company says they are doing is a product of real, company-wide rules that are ingrained in every aspect of its business, and not just the product of its PR department, perhaps as an afterthought.
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pic: Chris Devers
For instance, we researched and ranked two of the top logistics and delivery companies, UPS and FedEx. UPS is rated highest on our proprietary ranking system, while FedEx is among the lowest-scoring companies we evaluated. Why? Because UPS excelled in the critical areas of comprehensive data collection and reporting of greenhouse gas emissions. UPS tracked in great detail its emissions and had them verified by third parties, allowing the company to state verifiably that it had reduced the total amount of fuel it consumed per package delivered by 3.3% from 2009 to 2010. Its emissions inventory included Scope 3 activities, which encompass even functions that a company does not directly control or own – a crucial, but difficult, measure which only the most dedicated companies have used successfully. FedEx, on the other hand, offered an inventory of its emissions that lacked detail in its Scope 3 emissions, and did not include third-party validation of its measurements. Its emissions-reductions initiatives have been limited and reported in a largely anecdotal fashion. In our view, language the company has included in its annual report, website and elsewhere to describe its environmental commitment has not always been consistent with our findings. Our website currently includes dozens of rated and ranked companies like this, and we are adding more every month. We rely on publicly-available documents, however prior to our service, competing claims among companies couldn't be easily confirmed. Now, our readers are armed with information, and the companies can no longer hide their actions behind their words. As negotiators consider stronger mandates for sustainability reporting, it should be recognised that many companies are taking steps to provide information that is well beyond what is required of them; information which is also clearly in the best interest of their workers, shareholders, and the communities in which they operate
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MORE INFO www.greenwashingthefacts.org
RIO+20
Integrating material sustainability information into corporate reports should be a key and critical outcome of Rio+20, urges ACCA A defined goal centred on sustainability reporting by companies ‘a must’ at global Summit
Corporate reporting needs to be brought into the 21st century by integrating material sustainability information into corporate reports, asserts the Association of Chartered Certified Accountants (ACCA) today ahead of Rio+20. To influence policy makers and create debate prior to the Rio+20 Summit, ACCA has published a paper which looks at possible changes to a key aspect of the discussions – paragraph 41 – which is concerned with the integration of material sustainability information into the corporate reports of listed and large private companies. Rachel Jackson, head of sustainability at ACCA says: “To make a difference, Rio+20 needs to have goals that are achievable and actionable – one of those goals should focus on the need for a global approach to sustainability reporting. Long term value is enhanced by companies embedding sustainability into their business strategy and key processes, rather than treating sustainability information as a mere add on activity. The long term viability of companies has to be at the heart of corporate decision making.” “An effective and workable paragraph 41 would emphasise the relevance of sustainability to investors and business. It would spread good practice, and emphasise the relevance of sustainability to investors and businesses. Rio+20 should be aiming for this goal – not just for companies and investors, but for the planet itself.”
ACCA believes that: • paragraph 41 should lead to a commitment by UN Member States to develop mechanisms for sustainability reporting at a national level; while such national reporting would need to meet global standards, flexibility in the mechanisms applied to meet the standards would allow for country-specific solutions • paragraph 41 should obligate companies to report on a ‘comply-or-explain’ basis; this requirement would provide appropriate flexibility and would stimulate substantive board discussions on risks and opportunities arising from sustainable development.
Rachel Jackson adds: “There is a ground swell of opinion on this issue, led most recently by Aviva Investors through a coalition of investors, NGOs and UN agencies, as well as ACCA. This coalition recently called for a commitment from UN Member States to work on an international agreement requiring companies to integrate sustainability issues in their annual report and accounts, on a report or explain basis. The coalition believes this would be a realistic, tangible and meaningful success.” “However, whatever the policy outcome at Rio+20, there will be a need for rigorous and credible arrangements to map out and assess the fulfilment of any undertaking, whether voluntary or binding. This is where accountants come in – the profession provides the much needed transparency, measurement and comparability required for common international reporting.” ACCA’s paper includes a series of expert views on this issue from our Global Forum for Sustainability members and other voices from the accountancy profession; the Forum was established in 2011 to bring together leading thinking on sustainability and the role of accountants. Vincent Neate, Head of Climate Change and Sustainability at KPMG says that “as global businesses head to Rio for the 20th anniversary of the Earth Summit, there are reasons to be hopeful, but also some harsh criticism to be faced. Leading businesses know the importance of sustainability and responsibility but we do need to accelerate their adoption as corporate values. The question of what role transparency should play in that acceleration is a vital one.” Victor Anderson, Senior Policy Officer at WWF-UK, adds: “The most important fact about Rio is likely to turn out to be that it is not the end of the process. It is increasingly clear that it has acted as a major catalyst for debates, campaigns, and detailed work, and that all this will continue for many years after Rio.”
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MORE INFO ACCA’s policy paper was written whilst the text on corporate sustainability reporting was still in its former placing of paragraph 24 of the Rio+20 Outcome Document. The full paper can be found here:
www.accaglobal.com/content/dam/acca/global/PDF-technical/ sustainability-reporting/tech-tp-rio20.pdf For more information, please contact: Gordon Hewitt: gordon.hewitt@accaglobal.com
RIO+20
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Green Economy Principles: why we need them Rina Kuusipalo Stakeholder Forum Historically, there is considerable precedence for principles being invaluable toward long-term implementation. The 1992 Rio Principles acted as a global milestone in composing a common language for sustainable development – Principle 15, for instance, brought to life the precautionary principle. Similarly, The Stockholm Declaration, Johannesburg Declaration, and the Earth Charter contributed to enabling such communication and collaboration across borders. There is further precedent beyond sustainable development, like the Sullivan Principles, introduced by an African-American preacher in 1977 in protest to the apartheid economy. With the aim ‘to support economic, social, and political justice by companies where they do their business’, these principles helped to pave the way for corporate social responsibility and global codes of conduct. Now, twenty years later, with enhanced knowledge about the state of the planet, unprecedented crises and challenges, a deeper systemic social justice perspective, and an acceptance that we need to restructure the economy itself to foster real change; Rio+20 marks a line in the sand and an opportunity to redefine our idea of progress for moving forward. With this in mind, the Green Economy Coalition executed a global online consultation to identify the underlying principles of a green economy. Over 250 stakeholders from civil society contributed over a period of five months, and the process was also carried out in Spanish and Portuguese to maximise diversity. Feeding into this were, for instance, Stakeholder Forum’s collaborative 15 principles based on historical precedents and the International Trade Union Confederation’s ‘Just Transition’ principles. The nine principles coming out of this process aim to identify a set of ethically driven yet practically applicable guidelines, elaborating on what it means, for example, to deliver the principles of dignity, inclusion, accountability, resilience, and generational and economic justice in a green economy. The results of the consultation emphasised that the green economy should not be a tool just for sustainable development, but that equity must be its overarching goal. Also, for most respondents, it was not enough to adopt new policy, a transition away from engrained bad practices was deemed equally crucial – for instance, movement towards implementation of the principle of common but differentiated responsibilities through the contraction of wealthy countries to make space for the global South’s development.
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RIO+20
pic: Neha Singho
In the lead-up to Rio+20, many countries, and especially the global South, have voiced that the green economy may be too easy to interpret in business-as-usual ways. In the global green economy principles consultation, however, stakeholders reportedly saw the principles as a useful tool to actually understand the concept of a green economy. A set of inclusive principles, then, could be a solution to bridge much of the political confusion currently ongoing in the Rio+20 process, as principles serve to articulate the underlying impetus of policy and law. Building internationally collaborative and renewed political commitment for successful, long-term implementation to ensure an equitable and coherent language for a green economy – so crucially needed from Rio+20 – will require a renewed framework and re-articulation of globally shared principles for our time
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Sovereign wealth funds and sustainable investment Summary of a paper by Frederic Samama, Diane Bouchacourt and Kambiz Mohkam Sovereign Wealth Fund Research Initiative In response to the urgent need to develop a ‘sustainable economy’ that preserves the environment for future generations while improving social equity, we emphasise the role of state-owned institutional investors such as sovereign wealth funds (SWFs) and pension funds. Indeed, the world must develop in a way that alleviates poverty in non-developed countries, guarantees the sustainable development of emerging countries, sustains growth in developed countries in a distressed macro-financial environment, and protects the environment. This transition towards a sustainable economy relies on economic and social development and environmental preservation. On the one hand, studies show that developed countries significantly lack capital and there exists a growing funding gap impeding the development of a sustainable economy. On the other hand, SWFs and central banks in developing countries own huge reserves and have trouble finding investments that offer both high-returns and match their specificities as government-linked financial entities. Consequently, we believe that SWFs have all the incentives to finance this sustainable economy as they can benefit from positive externalities, while investing at scale and with a long-term horizon. Also, since SWFs are not here for philanthropy, investing in a sustainable economy will allow them to combine higher returns and positive externalities by taking into account a country’s exposure to environmental and societal risks.
Book Launch
Yet, SWFs face several obstacles that prevent them from playing this catalytic role. Their performance is often measured on a short-term basis and they receive their guidelines from governments with shifting political goals, reasons which hinder the adoption of long-term strategies. Furthermore, SWFs should be able to ask for advice and
guidance from governmental institutions, but there is a lack of dialogue between SWFs and governments. In order to facilitate such transfers of wealth, new solutions must be found so that SWFs, and other long-term investors, can drive the development of a much needed sustainable economy. In the full length paper, we propose and quote several innovative and easy-to-implement solutions that allow long-term investors to make commitments to sustainable investment, such as: • the establishment of intergovernmental institutions that could help green investors address market and political risks; • the recognition of the value of long-term investment with the creation and use of innovative products like the Loyalty-Shares; and • a new way to finance sustainable cities and the implementation of a market of carbon. The challenge for investors, governments and companies is now to combine multiple solutions, coordinating their longterm strategies in a joint effort to achieve scale and impact towards a green economy. To that end, the United Nations could play a pivotal role to accelerate the development cycle of a sustainable economy by communicating on the associated challenges, on the possible solutions and the role of SWFs, in order to facilitate the coordination between investors, governments and companies, and the implementation of intergovernmental entities
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MORE INFO www.globaltransition2012.org
‘Only One Earth: The Long Road via Rio to Sustainable Development’ By Felix Dodds and Michael Strauss with Maurice F. Strong Press / Photo Op Thursday, May 31, 2012
CONTACTS
1.00 pm – promptly
Anya Ruvinskaya +1 718 407-0337 anya@earthmedia-summit.org (New York based)
UN North Lawn Building, stake-out position Appearing at Book ‘Hand-over’ – Minister André Aranha Correa do Lago, Brazil Division of Environmental Policy and Sustainable Development Mr Ahmed Ehab Gamaleldin, Egypt - Deputy Assistant Foreign Minister, Environment and Sustainable Development
Georgie Macdonald +447411422581 gmacdonald@stakeholderforum.org (London based)
MORE INFO Copies of the book can be purchased through Amazon
http://www.amazon.co.uk/dp/0415540259 Earth Summit 2012 - www.earthsummit2012.org
RIO+20
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A new economic paradigm: The next big challenge Jessie Henshaw HDS Systems Design Science For sustainable development, the next big private stakeholder challenge is one everyone has seen coming, but we have not yet had the courage to face. At present, sustainable development is maturing as an idea and practice within a world economy that uses its resources to continually escalate its demands on the planet. At present, sustainable development helps sustain this scenario. We need the economy to become selfregulating as a whole, not just to grow some self-regulating parts. A natural model for solution would be for those that care about sustainable development to choose not to do business with those that grow their enterprises like cancers and choose to endlessly use profits to multiply investments as they continue to harm society and the Earth. This model of self-regulation is simple enough to understand. It demands that corporations find a higher purpose for their profits than self-inflation and suggests that they apply the investment strategy of family-run businesses to the global market, accumulating investment returns to build the enterprise first, and after that use the profits to sustain other things. Applying this kind of solution may shock a lot of people, but it equals the shocking problem we face. We have adopted a form of ‘prosperity’ that depletes its own resources ever faster in order to remain stable. The greatest challenge for sustainability has always been that the economic ideal of our society is a machine for endless growth. It has long been clear that a new model is needed, but it has also been too contentious and complicated to openly discuss. Now it is clear, with disasters of all kinds multiplying – resources becoming scarce and costly, the financial crisis – ignoring the problem is no longer an option. Still, most find it unthinkable that the prosperity can be possible without endless growth. Reaching consensus to put an end to the current economic paradigm, would give our great engines for growth a much higher purpose. Scientists, like me, who study the basic physics of organisation in natural systems, are of course not the first to be consulted on great questions of social organisation. Discussions on the role of money in society elsewhere, though, really do seem stalled, with people treating discussions on the rights of others to use their own property as taboo.
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RIO+20
pic: Tulane Publications
People forget that money is not really ‘property’, but a grant from society of a right to claim one equal share of any material service society can deliver. Yes, using money to your own advantage, to multiply if you can, is a very ancient and deeply engrained custom. Using steady profits to multiply impacts, however, is also 100% guaranteed to push all relationships with its source of value to breaking point. There are many other ‘no-growth’ proposals which have received baking from a wide range of sources, such as Tim Jackson’s ‘Limits to Growth’. The adoption of natural principles of self-regulation, however, seems likely to be more effective in keeping the economy both profitable and creative. This proposal originates from John Maynard Keynes and is technically a proposal to gradually end the reinvestment of investment profits, the compounding of ‘unearned income’, so investment funds come only from the earned incomes that people save
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ABOUT THE AUTHOR Jessie L Henshaw is a natural systems scientist who has been doing research on how to understand the organised but ‘spontaneous’ and ‘uncontrolled’ systems of nature such as growth, for over 30 years. He has published numerous papers and made discoveries that perhaps aren’t quite understood yet. One is that natural systems develop as individual organised units, like the many which currently populate the whole world but are generally not recognised by conventional scientific models.
MORE INFO www.synapse9.com
Rio+20: Will the UN Summit deliver on sustainable development? Richard Gledhill PwC With government ministers, business leaders, NGOs and the world's press converging on Rio de Janeiro for the 2012 UN Conference on Sustainable Development in June, expectations for this year's conference are high. Will it deliver? The Zero Draft of the Outcome Document - The Future We Want - was released in January. The big themes are the institutional framework for sustainable development and a green economy in the context of sustainable development and poverty eradication. Subsequent negotiations have seen this expand to almost 200 pages and then cut back to less than 100, but we still appear to be some way away from a final agreement on an ambitious outcome. The central issue of equity is a sticking point for many developing nations, and this final week of ‘informal informal’ negotiations aims to seek a broad consensus in advance of the conference itself.
CEOs willing to take action PwC conducted a 'pulse survey' of CEOs from around the world on expectations from Rio+20. Sustainability issues are expected to become increasingly important over the next ten years, with particular concerns about affordable energy and resource scarcity, but only a small minority of CEOs who responded to our survey expect significant progress on these issues at the Conference. Importantly, though, more than seven out of ten respondents said that their companies would be prepared to make more ambitious pledges to action on sustainability issues if there was significant progress on these issues at Rio+20.
CEOs rank importance of issues for their business now, and in 10 years’ time 2012 - Total important/very important Expected in 2022 - Total important/very important Affordable Energy
87% (39% very important)
89% (60% very important)
Equality & social inclusion
83% (26% very important)
86% (43% very important)
Sustainable consumption & resource scarcity
80% (35% very important)
84% (31% very important)
Climate change
68% (25% very important)
78% (36% very important)
Water scarcity
65% (30% very important)
78% (38% very important)
Biodiversity loss
58% (12% very important)
64% (14% very important)
Food security
57% (28% very important)
63% (29% very important)
Note: PwC polled 141 CEOs of companies with revenues between $10m - $10bn +, April and May 2012.
Malcolm Preston, PwC global leader on sustainability and climate change, said: "The Rio+20 Summit can shape the vision and drive the ambition. But business has more confidence in 'bottom up' driven actions than it has in 'top down' ones. Over 90% of CEOs signalled that regional or national regulation and fiscal measures, along with private sector investment, are the most effective mechanisms for driving investment and change.
“There is a sense that business can and will respond on sustainability and climate change. Big business gets the strategic importance of sustainable development and consumption, and many major players are already taking action within their businesses and along their supply chain. But the private sector is looking for more ambition and more leadership from governments and policymakers."
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MORE INFO www.pwc.com/sustainability/rio20
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RIO+20
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Reflections on the Negotiations – Wednesday 30th May Kirsty Schneeberger Stakeholder Forum
Catherine Skopic
Talks on Section III had a flourishing start, with many Member States praising the Co-Chair for the excellent work done on streamlining the paragraphs. In particular, the US, Canada, the EU and Switzerland paid compliments to the Co-Chair on numerous occasions. However, as the amendments began to trickle in on particular aspects of numerous paragraphs, it became clear that some delegations were keen to open up the text and reformulate paragraphs in ways that were not necessarily 'in the spirit' of the process. In the final stages of section III Ambassador Kim remarked that some paragraphs were no longer resembling the streamlined version, that some Member States were trying to turn this iteration of the text into the old version, and that instead of 'trying to turn a tiger into a lion' the 'tiger had been turned into a bird' as the amendments 'contaminated' the text. Shortly after this, perhaps to defend some of the many amendments that the delegation had made in paragraphs 55-67, the G77 took the floor to remind the room that the parallel process ought to be considered and that the text of the two Working Groups should be read as a whole, and not in isolation from one another. In response to this Ambassador Kim stated 'you have to respect the role of the Co-Chair' and that the G77 had 'shown the least respect to the person up on the podium'. He expressed his disappointment in the way that the negotiations were proceeding, and that this was not the right way to be taking things forward. He went on to suggest that this was 'not the grown-ups way of doing things’. Interrupting the G77 as they attempted to respond, he stated that he would give them the floor after a 3 minute pause in proceedings that they should take to reflect on their approach moving forward. Tensions are running high in this the penultimate preparatory meeting before Rio. This is a tricky process where Member States are encouraged to be as flexible as possible in adopting the streamlined paragraphs and in the spirit of cooperation not open up the text again for substantial amendments. After the pause in proceedings Ambassador Kim apologized to the G77 for using words that may have offended, and the G77 was appreciative. Thus concluded the discussion on Section III, and a pause was taken before talks resumed on Section IV for the late afternoon session
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In Working Group 1, what has become one of the most interesting and controversial issues is that of oceans, which span 21 paragraphs. It is clear from the EU that they would oppose the delegation of any of the paragraphs to breakout groups. If this section retains length, it will be the largest single-issue section. But it tantalisingly offers a real breakthrough in governance of the high seas, an area which has until now been stuck in the Law of the Sea discussions in the General Assembly. Paragraph 6 focuses on Areas Beyond National Jurisdiction (ABNJ), which covers the vast majority of our high seas. The paragraph seeks to give some protection to the conservation and sustainable use of marine biological diversity. The UN General Assembly established an Ad Hoc Open-ended Informal Working Group to study related issues to ABNJ. The paragraph recognises the importance of this Working Group and awaits the results of its work, enabling it to fulfil its mandate for recommendations to the General Assembly. The most heart-breaking moment for me personally was listening to the US delegate giving its reasons for not supporting this paragraph - an intervention filled with lack of regard or consideration for the importance of this issue - for the some 500 million people whose livelihoods depend on the oceans, for the world’s many island nations and for all of us who depend on the health of our oceans and all the life within. Our oceans received support from South Africa, speaking for the like-minded group of countries including Monaco, Australia and New Zealand
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Veronica Frank Greenpeace International "It was good to see the protection of marine biodiversity in areas beyond national jurisdiction take a step forward, with a majority of countries supporting text to be considered in Rio that starts a negotiation process for an implementing agreement under UNCLOS. The US seems to have lost some of their allies."
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