Transcript THE GLOBAL COMPACT

THE UN GLOBAL COMPACT
MODULE 2 - THE BUSINESS CASE
Session 1: Setting the Scene
The State of the Global Environment
UNGC Module 2 – Session 1
1
The State of the Planet: Cause for Concern?
The State of the Planet
Issues of concern: An overview
• Climate change
• Freshwater scarcity
• Biodiversity loss
• Collapsing fisheries
• Soil erosion
• Cropland and forests loss
• Increasing population
• Growing waste
• Growing consumption
UNGC Module 2 – Session 1
3
The State of the Planet
Climate Change (1)
Diagram from IPCC
UNGC Module 2 – Session 1
4
The State of the Planet
Climate Change (2)
Diagram from IPCC
UNGC Module 2 – Session 1
5
The State of the Planet
Resource Depletion - Freshwater
• Access to water is arguably the world’s most urgent resource issue
– Every year about 5 million people die due to lack of access to water & sanitation
– Almost 30% of people live in countries suffering moderate-to-high water stress
– By 2025 more than 4 billion people will be living in water stressed countries
• Between 1900-1995 global freshwater consumption rose six-fold, more than
double the population growth rate
• More than 20% of the world's freshwater fish species have become extinct,
threatened, or endangered in recent decades
• In 60% of the European cities with more than 100,000 people, groundwater
is being used faster than it can be replenished
UNGC Module 2 – Session 1
6
The State of the Planet
Population Growth
UNGC Module 2 – Session 1
7
The State of the Planet
Population Growth, Consumption
and Production
• Population is not the main problem of environmental degradation, but
rather consumption and production patterns
• There is a need to find an appropriate balance between:
– The basic needs of the current population (food, shelter, health, clothing)
– The needs of future generation
– This requires balancing inter- and intra-generation equity
UNGC Module 2 – Session 1
8
The State of the Planet
Unsustainable Consumption
1000 people harm the environment annually by the following factor
In Germany Developing Country
Energy consumption (TJ)
Greenhouse gases (t)
CFCs (Kg)
Waste (t)
Toxic waste (T)
Passenger cars
Steel consumption
UNGC Module 2 – Session 1
158 22
1300
13700
450
16
400
120
187
2
443
6
655
5
9
The State of the Planet
Inequalities in Consumption
• 1.3 billion people live on less than 1 US dollar a day
• The overall consumption of the richest fifth of the world’s population is
16 times that of the poorest fifth
• Nearly 160 million children are malnourished
• More than 880 million people lack access to health services
• 1.5 billion lack access to sanitation and clean water
UNGC Module 2 – Session 1
10
UNGC Module 2 – Session 1
11
The State of the Planet
Unsustainable Consumption
Global Consumer Class: Selected Nations (2002)
Country
United States
Japan
Germany
Russian Federation
Brazil
China
India
UNGC Module 2 – Session 1
Consumers
(millions)
243
121
76
61
58
240
122
Share of National
Population (%)
84
95
92
43
33
19
12
12
The State of the Planet
Car Growth in China
Year
1980
UNGC Module 2 – Session 1
Private cars
0
2000
5 million
2002
10 million
2003
14 million
2015
150 million (estimated)
13
The State of the Planet
Ecological Footprints
UNGC Module 2 – Session 1
14
The State of the Planet
Consequences: Four Earths needed in 2100
1900
UNGC Module 2 – Session 1
2003
2050
2100
15
Mixed messages from consumers…
I’d like to end poverty, stop
violence and racism,
and get rid of pollution.
Everyone should be equal.
I want to dress in the nicest clothes,
drive a great car, talk on the latest
mobile phone, and watch my brand new DVD
UNGC Module 2 – Session 1
16
The State of the Planet
The need for increased resource efficiency
“20% of the world’s population consumes 80% of its resources. If
everyone consumed at this level, it would take four extra planets to
provide the necessary resources. Global marketing of this
consumer lifestyle is headed for natural disaster.”
The Ecological Footprint
“Resource use and pollutant discharge will need to decrease to
less than 10% of current OECD levels to reach sustainable
equilibrium by 2040.”
Netherlands Council for Environment & Nature
UNGC Module 2 – Session 1
17
The State of the Planet
The implementation gap
“Fundamental changes in the way societies produce and consume
are indispensable for achieving global sustainable development.
All countries should promote sustainable consumption and
production patterns...
Governments, relevant international organizations, the private
sector and all major groups should play an active role in changing
unsustainable consumption and production patterns.”
WSSD Johannesburg Plan of Implementation, Sept. 2002
UNGC Module 2 – Session 1
18
The State of the Planet
Factor Four improvements
Business shifts for natural capitalism
– Dramatically increase resource
productivity
– Eliminate the concept of waste: build on
biologically inspired production models
– Re-investing in natural capital
– Re-invest in people and social systems
UNGC Module 2 – Session 1
19
The State of the Planet
The need for change
“We cannot continue to do what we have always done, only
incrementally better, and expect to achieve sustainability.
If sustainability is to be achieved, we will have to rethink
virtually all of our industrial processes.”
Edgar S Woolard - Former CEO of Du Pont
UNGC Module 2 – Session 1
20
The State of the Planet
Sustainable consumption
Understanding the interrelation between eco-efficiency and
sustainable consumption - the “rebound effect”
– In terms of the “rebound effect”, the productivity/efficiency gains
achieved through cleaner production and eco-efficiency measures are
being overtaken by the overall increases in production associated with
growing consumption patterns
– While problems of production process are understood, there is
generally an important gap of understanding in terms of the
consumption (use) and disposal of products
– Environmental concerns are not sufficiently integrated into economic
and social programmes and vice versa
UNGC Module 2 – Session 1
21
The State of the Planet
The Challenge
Promoting sustainable consumption and production
• New product-oriented strategies (life cycle perspective, design and
manufacture)
• Understanding consumption
• Integrated approach of sustainable consumption and production
• De-linking environmental damage from economic growth
UNGC Module 2 – Session 1
22
The State of the Planet
There is no
Sustainable Consumption without
Sustainable Production
and vice versa
UNGC Module 2 – Session 1
23
So what has been the response of the
corporate sector to the global environmental
challenges?
UNGC Module 2 – Session 1
24
Improvement in environmental quality
Rethink
Redesign
Incremental change
“Low
hanging
fruit”
Long investment time in R&D
From Arthur D Little - Sustainable Industrial Development 1996
Time
A Brief History of Corporate Environmentalism
Broad Phases of Corporate Environmentalism
– Before the 1960s: Blissful Ignorance
– 1960s and 1970s: Confrontation / Reluctant Compliance
– 1980s: Beyond Compliance
– 1990s: Changing Course
– Beyond 2000: Sharing Responsibility?
UNGC Module 2 – Session 1
26
Evolving Business Behaviour
on Sustainability Issues
Evolving Business Behaviour
on Sustainability Issues
A Brief History of Corporate Environmentalism
1960s and 1970s - Reluctant Compliance
– Growing public consciousness about the natural environment
• Publication in 1964 of Rachel Carson’s ‘Silent Spring’
• 1970 Earth Day demonstrations
• Publication in 1972 of the Club of Rome’s ‘Limits to Growth’ and The
Ecologist’s ‘A Blueprint for Survival’
• 1972 Stockholm Conference on the Human Environment
– Businesses began:
• Building internal technical capacity on environmental issues
• Installing pollution control measures and initial networking
• But largely a defensive role
• Social activities focus mainly on philanthropy
UNGC Module 2 – Session 1
29
A Brief History of Corporate Environmentalism
1980s – “Beyond Compliance”
– Increasing pressure to improve performance:
• Major industrial incidents: Bhopal accident (India, 1984) and Sandoz
chemical spill (Switzerland, 1986)
• Brundtland Report in 1987 put the concept of sustainable development
squarely into the international policy arena
– Business began to:
• Develop environmental policies with specific performance commitments
• Appoint dedicated staff functions, and increase line management
integration of environmental and social responsibilities
• Implement pollution prevention and cleaner production techniques
• Undertake greater networking with other companies on environmental
and social issues (eg chemical industry’s Responsible Care initiative)
• Develop tools such as environmental audits
UNGC Module 2 – Session 1
30
A Brief History of Corporate Environmentalism
1990s – “Changing Course”
– Increasing international policy action on environmental and
sustainable development issues
• Rio Earth Summit in 1992
• Growing number of Multilateral Environmental Agreements (eg the UN
Framework Convention on Climate Change)
– Business response signified by institutionalisation and innovation
• Launch of the ICC Business Charter in 1991
• Formation of World Business Council on Sustainable Development
• Development of ISO 14000 environmental standards
• Increase in environmental and social reporting practices
• Development of innovative technological solutions, as well as tools such
as life cycle assessment, design for environment & product stewardship
UNGC Module 2 – Session 1
31
A Brief History of Corporate Environmentalism
Beyond 2000 – “Walking the Talk”?
– Key strategic trends impacting global companies
• Growing NGO and community pressure for greater corporate
transparency and accountability
• Increasing activism of institutional investors and the financial
community, compounded by post-Enron disenchantment with
traditional analysis
• Tightening global and domestic regulatory pressures (eg the
Kyoto protocol, European pension fund requirements)
• Increasing appreciation of the business case for sustainability
and a gradually growing acceptance of the need to address
sustainability concerns
UNGC Module 2 – Session 1
32
Corporate Environmentalism: Strategic Trends
Growing NGO and consumer pressure for accountability
UNGC Module 2 – Session 1
33
Corporate Environmentalism: Strategic Trends
Increasing investor action
UNGC Module 2 – Session 1
34
Corporate Environmentalism: Strategic Trends
Changing regulatory pressures
Key developments globally
– Growing number of Multilateral Environmental Agreements
– International corporate accountability / MNC liability regimes
– EU Chemicals policy (REACH)
– EU Integrated Product Policy - LCA implications
– Regulatory pressure for reporting
– Environmental tax reform requirements
– Personal / class action claims
UNGC Module 2 – Session 1
35
Climate Change Litigation
"What we're seeing is an emerging area of climate litigation. As the
impacts of climate change worsen, the number of potential plaintiffs,
and the range of legal actions available to those plaintiffs will
undoubtedly increase."
Australian Product Liability Lawyer
International
– July 14 launch of Climate Justice Program, alliance of 70 NGOs, lawyers,
academics and individuals in 29 countries that seeks enforcement of existing
laws to hold the perpetrators of climate damage accountable and liable.
Australia
– Climate Action Network Australia notified directors of the top 200 listed
companies of financial risks and legal obligations of climate change. Targeted
major GHG emitters, as well as property financiers. Companies expected to
respond by undertaking risk assessment of climate change exposure.
USA
– Eight US States and New York City launched a public nuisance lawsuit
against five of the US’s largest power companies – 21 July 2004.
UNGC Module 2 – Session 1
36
Corporate Environmentalism: Strategic Trends
Indicators of the next wave of corporate responsibility
– Sustainability reports
– Strategic partnerships
– Participation of financial markets
– Academia and education
– Media
UNGC Module 2 – Session 1
37
Corporate Environmentalism: Strategic Trends
Corporations in the next society?
“In the next society, the biggest challenge for the
large company - especially for the multinational may be its social legitimacy: its values, its missions,
its vision.”
Peter Drucker
UNGC Module 2 – Session 1
38
Corporate Sustainability: An ideal company?
Corporate Sustainability: Features of an ideal company?
– Integrates environmental and social issues into its core
strategy
– Quantifies the social and environmental costs of its activities
– Displays innovation throughout the full life cycle of its
products and services
– Implements sound corporate governance practices
– Is committed to transparency and accountability
– Promotes meaningful change amongst its peers, within its
neighbouring communities, and throughout its supply chain
UNGC Module 2 – Session 1
39
Corporate Sustainability
Further resources:
Catalysing Change (UNEP): www.uneptie.org/outreach/business/best_practice.htm
The Natural Step: www.naturalstep.org/
World Business Council for Sustainable Development: www.wbcsd.ch
World Resources Institute : www.wri.org/
Wuppertal Institute: www.wupperinst.org
UNGC Module 2 – Session 1
40