Rio+20: the Big So What?

By Sumita Ghosh On June 21, 2012 · Leave a Comment

While everyone else is stressing and obsessing about the failure of the outcome draft; putting all focus these past two weeks on the policy agreement process of negotiators, and now hoping that some supreme world leader will hero-up and re-open the text for improvement, they’re seriously missing out on the big so what.

So what is it?

Across the way at Athletes Park, you can find a gold mine of answers that we’ve all been looking for (but from which we’ve been distracted by the exclusive and bureaucratic process of go-it-alone policy-making in the dry and largely ineffective negotiation sessions).

68% of respondents (from a UNEP, Globescan, and SustainAbility survey of 1,603 sustainability experts), said that they identify a lack of political will as the greatest obstacle to moving the sustainable development agenda forward. -Survey available here.

‘Over there’ (ironically, the private sector is not just metaphorically but physically removed from the policy-making confines of the Rio Centro compound -located across the street in canopy pavilions along with governments and civil society organizations), we are being offered some vibrant, and realistic examples of ways forward; through innovation, technology, creativity, and care, there’s an alternative and inclusive shift in the making on how we get things done, and it’s being driven by a new and growing mentality that doing well can only be done by doing good.

“Business can no longer afford to ignore the benefits that switching to a Green economy will bring. Pioneers that are leading the market are reaping the rewards and positioning themselves for sustained success that benefits their customers and communities.” -Achim Steiner, UN Under-Secretary General and UNEP Executive Director, UNEP Report, The Business Case for the Green Economy: Sustainable Return on Investment

The responsible private sector is the leading champion of this new movement, but not alone and not without oversight, governance, incentives, and strong partnership with other stakeholders.

In my interview on Tuesday with Unilever CEO, Paul Polman, he reiterated his commitment to encouraging businesses to lead the way, he said:

“In just a few years, I believe there will be enough critical mass with groups of companies and partnerships running change programs, when you create some success around specific tangible projects, it will attract others.”
-Sumita Ghosh, interview with Paul Polman, the US Center, Public-Private-Partnership Session, June 19

It may all sound overly optimistic or unreal, and my campaigner and activist friends will be conservatively skeptical about this (I welcome any of you to visit the examples of evidence to see for yourselves that this is in fact the honest truth), but if you open your eyes a bit, allow some room in your hearts and minds for the possibility to believe that another world is possible, you’ll see that responsible business solutions driven by innovators, scientists, trade unions, local leaders, and civil society organizations, can and will provide the best and fastest approaches towards achieving the goals we want but cannot expect from any outcome of a document which is really meant to be a means not the end in itself.

For the hard core environmentalists and sustainability crusaders, most of who have unduly respect for the World Resources Institute, here’s a word from their interim President, Manish Bapna at yesterday’s summit:

“We’ve believed all along that the more groundbreaking action at Rio+20 would be outside of the formal process. Certainly, after attending many side events and informal meetings this week, I’ve come across numerous examples of civil society organizations, entrepreneurs, companies, and others who are moving forward with innovative approaches to address sustainability.” Original available here.

Let’s have a look at some cases of how responsible businesses and coalitions with a vanguard of stakeholders are leading the way by providing concrete examples of sustainable development action and leadership here and, more importantly, in the real world beyond this conference:

1. Natural Capital Leadership Compact:

Signed by 15 global companies urging public- and private-sector action to properly value and maintain the Earth’s natural capital; the coalition has an ambitious set of business commitments that identify innovative business solutions to address natural capital challenges globally.

Businesses commit to:

operating within the limits of natural systems,
identifying and addressing externalities (on people and the environment from the production and consumption of products and services),
enabling consumers to make better-informed choices,
developing rigorous and realistic targets and plans.

By signing the compact companies have agreed to demonstrate their commitment by:

sharing their experience and learning in the four key areas for business through the international network of the Cambridge Natural Capital Leaders Platform (CNCLP),
meeting once a year to discuss their progress and share their learning at events in America, Europe and Asia,
engaging at senior level with national, regional and international governments through the CNCLP to press for action.

More about the Natural Capital Leadership Compact here:

2. Sustainability and Preferable Tax Regimes:

I’m not going to make many friends from the outset of this (as it may seem to overshadow the serious lack of progress this past two weeks to reign in fossil fuel subsidies), but let’s consider a few business-led breakthroughs on improvements to tax regimes that reward sustainable innovation:

Just released today, news that 52 financial leaders embraced and circulated a letter at the G20 urging other industry leaders to support small taxes on trades of stocks, bonds, and derivatives (aka. the Small Financial Transaction Taxes, FTTs).

The letter wrote:

“These taxes will rebalance financial markets away from a short-term trading mentality that has contributed to instability in our financial markets.”

It also notes the potential to

“Raise massive revenues for people in urgent need at home and in the world’s poorest countries.”

To everyone’s surprise, it’s not that hard to sell the idea to financial professionals who still care about helping companies raise capital to innovate and create jobs!

Some of the signers include:

Seven former high-level executives of JP Morgan and Goldman Sachs,
Four current and former heads of European banks,
Senior executives of numerous U.S.-based social investment funds, including Domini Social Investments (with2 billion in assets under management), as well as Robert Zevin, who is widely recognized as the grandfather of socially responsible investing,
Several hedge fund pioneers, notably Dr. Paul Wilmott, who used to run a UK hedge fund and has become something of a guru in the quantitative analyst community.

So what?

The tax would apply to each trade, so even when at a tiny fraction of a percentage point, it would discourage the high-speed speculative trading that now dominates market behavior; more importantly (because criticism never leads to much), the tax would incentivize longer-term productive investment, particularly of sustainable market activity.

Improving tax regimes to award sustainable innovation is a huge incentive, (places with higher environmental standards and tax subsidies are more attractive to investors).

Further perspective, a few national and city-level tax incentives (for cleaner energy as an example) include:

Brazil, Belo Horizonte: tax credits for residential solar power,
China: subsidies on green cars,
India: carbon tax on local production,
Zambia: Tax reductions in mining areas to stimulate investment in renewable energy,
The OECD confirmed a growing movement towards environmental tax breaks and tradable permits over the last decade (the value of green taxes to boost innovation is evident through increased investment in research and development and registration of patents on new, cleaner technologies),
A host of countries including Argentina, Bolivia, Colombia, Spain, Belgium, France, UK, Greece, Ireland, USA, South Africa, Sweden, Slovenia, Lithuania, Italy, are exempting tax in favor of biofuels.

More about tax incentives here.

Although the big momentum for this now is in Europe, all those criticizers of the US financial system should be pleased to hear that in the US, there’s a surge of grassroots support for these taxes. Have a look at the new web site www.robinhoodtax.org.

Note: Thanks to Sarah Anderson of the Institute for Policy Studies for sharing this news.

3. Friends of Rio+20:

There’s been a growing realization over the past 20 years, that there is a huge amount of expertise coming from ‘new’ areas (local governments, scientific communities, civil society organizations and businesses), because of the immense amount of value that can scale up solutions to environmental and human development concerns, a band of 26 multi-stakeholder leaders from business, trade unions, science communities, think tanks, and NGOs, recently joined forces to lead on a new way forward to achieve sustainability goals.

The group states that:

“Multi stakeholder efforts can often achieve, through collaboration, what governments working alone cannot, especially for those in developing countries. Such co-operative efforts can be transparent, participative and accountable… They can share costs and risks. They can be economically viable and at the same time they can demonstrate clear social and environmental benefits. They can be based on sound scientific knowledge and produce practical outcomes at scale, in a specific timeframe. And they are doing so now.”

The group demonstrates 30 practical examples of how innovative coalitions are already in the works, including:

The Consumer Goods Forum,
The Sustainable Energy for All initiative,
The Sanitation and Water for All initiative,
Extractive Industries Transparency Initiative,

Note: the remainder of the list can be found here.

Among other staked out demands, the group urged governments last week to:

Commit to designing economies that put us on the path to sustainable development,
Establish a clear set of ambitious, universal, and equitable global goals for sustainable development fit for the post-2015 development landscape,
Create national and regional policies and frameworks that allow delivery,
Allow multi-country, multi-stakeholder coalitions of willing and able actors to undertake explicit sets of action now and in the near term to help achieve these goals.

A few lesser known yet significantly impactful examples of business leading the way:

1. Voluntary Commitments:

Sadly, negotiators of the outcome draft failed to clearly commit to: sustainable development goals (SDGs; though the language, vague, it at least begins the process to later establish the goals); and failure give the UN Environment Programme full agency status (though lots of support including a chunk of change to be donated by China), the text does strengthen promoting corporate sustainability reporting measures (but not as clearly as we all wanted). but one of the big outcomes of Rio+20, I think, can be seen where groups are making and delivering commitments. From the several business side events that I’ve attended at Rio+20, I’ve seen and heard a lot of enthusiasm among businesses for their sustainability commitments, and there’s overwhelming value in the knowledge shared from findings of business-led experiments and analysis driving the business case for action.

Check out the UN’s basket of voluntary commitments from businesses here.

2. A few snippets from my collection of case studies from visits to projects in the making, and interviews at Rio+20 with corporate change agents from big-business; here are a few examples of how companies with big impacts are pushing the green economy agenda through integrating sustainability and environmental betterment behaviors into their business operations to scale up the sustainable development agenda:

The Sustainable Living Plan (Unilever), an initiative to integrate sustainability into business models, for example, their “one rinse” washing formulas, save an average of 30 liters per wash, and are used across 12.5 million households around the world - a 60% increase over 2010.

The Environmental Profit and Loss Account was Puma’s first assessment (conducted in 2010). With the help of accountants at Pricewaterhousecooper and environmental data crunchers at Trucost, they calculated their impact on the environment, valued at €145 million (that’s considered a negative financial impact). The company used their assessment tool to make decisions that led to both reducing financial loss in the future while committing to a shift of 50% products to be made from sustainable materials (by 2015).

Siemens off shore wind turbines (they produce half of the installed amount of offshore wind turbines globally (at 2,000MW); with this initiative 4 million tons of CO2 is saved each year. According to my chat with Barbara Kux (on Siemens managing board), the company recently committed an investment of €150 million to R&D and expansion of its offshore wind business.