Monday, April 15, 2013
TEEB For Business Coalition Study Shows Multi Trillion Dollar Natural Capital Risk Underlining Urgency of Green Economy Transition
London & New Delhi, 15 April 2013 - The report, “Natural Capital at Risk – The Top 100 Externalities of Business”, estimates the global top 100 environmental externalities are costing the economy world-wide around $4.7 trillion a year in terms of the economic costs of greenhouse gas emissions, loss of natural resources, loss of nature-based services such as carbon storage by forests, climate change and air pollution-related health costs. This was released today from The TEEB for Business Coalition during the Business for the Environment summit in New Delhi.
Headline findings are:
The highest impact sectors by region globally include:-
The report assessed more than 100 environmental impacts using the Trucost environmental model which condenses them into six eKPIs to cover the major categories of natural capital consumption: water use, greenhouse gas (GHG) emissions, waste, air pollution, water and land pollution, and land use. These eKPIs were then quantified by region across over 500 business sectors. The method used has limitations and is only designed to give a high-level indication of the priority sectors and regions where natural capital risk lies. Limitations in the method are outlined in the report to support ongoing development of this type of analysis.
Alastair MacGregor, Chief Operating Officer of Trucost, who conducted the study states, “Recent soft commodity price volatility due to drought, and its impacts on company profits, nation’s trade balances and inflation has underscored the dependency of investment returns on natural capital. This trend will accelerate in the future on a number of fronts .”
Dr. Dorothy Maxwell, Director of the TEEB for Business Coalition states, “Understanding natural capital risk and opportunities is essential for businesses to position themselves in an increasingly resource constrained world.”
Quotes on the report from TEEB for Business Coalition board and advisory group members:
Pavan Sukhdev, Chair of the Advisory Board of TEEB for Business Coalition states, ”We need undoubtedly to change how we do business, but we cannot manage what we do not measure – and at present only a handful of businesses measure their externalities. Resolving this is at the heart of the green economy and sustainability itself.”
Achim Steiner, UN Under-Secretary General and Executive Director, UN Environment Programme (UNEP) states, “Forward-looking companies are already recognizing that the key to competitiveness in an increasingly resource-constrained world will hinge in large part on escalating natural resource efficiencies and cutting pollution footprints—the numbers in this report underline the urgency but also the opportunities for of all economies in transitioning to a Green Economy in the context of sustainable development and poverty eradication.”
Peter Bakker, President World Business Council for Sustainable Development comments, "Now that we have this high-level assessment of where the priority areas are, we need to encourage companies to increasingly consider the value of nature in decision-making, and ultimately accounting and reporting. The results of such company assessments should also be shared so we can fit the pieces of the puzzle together to develop a standardized approach to account for nature."
Commenting on the study Michael Izza, chief executive of ICAEW explains, “This study highlights that the disciplines of accountancy and economics need to evolve to recognise that the limiting factors to production and growth are no longer just labour, capital and technology. As our economies, populations and our consumption have grown exponentially relative to nature, which once seemed so abundant and limitless, we now have to face the fact that this is not so.”
"Sound natural capital management goes hand in hand with benefits for companies, investors, communities, and the environment," said Usha Rao-Monari, Director, Sustainable Business Advisory, IFC, a member of the World Bank Group. "This study makes the business case for companies and investors to take natural capital into account if they wish to save on resource use, access markets and financing, and mitigate major environmental and social risks," she added.
“Incorporating the use of natural capital into a business’ sustainability strategy is something that every company must do to understand their real sustainability issues in order to engrain them into day to day operations and overall planning. This is no longer an option and now more than ever it is critical for reporting requirements to include natural capital accounting and government legislation to address corporate transparency and accountability,”states Jochen Zeitz, Director of Kering and Chairman of the board’s sustainable development committee and Co-Chair, The B Team.
Example Key Press Items:
Putting environmental impact on the balance sheet
Charlotte Masiello-Riome, Senior Communications Strategy Advisor
Sarah Wainwright, Head of Marketing, Trucost
Patrick Schulze, Director, Strategic Engagement, Global Initiatives B4E Summit