A study of 11 industries by global accounting firm KPMG found that external environmental costs have jumped 50%, from $566 billion to $846 billion between 2002-2010. That works out to a doubling of these costs every 14 years.
All the ingredients are in place to implement natural capital accounting, including a UN-recognized methodology, political commitment at the highest levels and strong private sector support, Rachel Kyte, World Bank vice president for Sustainable Development, told Bloomberg.
Thanks partly to progress made at Rio+20, corporate and government accounting with likely reflect environmental profit and loss within a decade, replacing GDP.
The top 3000 companies don't account for $2.1 trillion in charges related to the use or pollution of natural assets, such as releasing carbon dioxide into the air or waste into a river, Pavan Sukhdev, a board member of Conservation International and former Deutsche Bank AG banker, told Reuters. That figure nearly doubles to $4 trillion, or about 6.7% of global GDP, when the world's entire corporate sector is included, he says.
"We cannot continue to do business thinking we are adding value to shareholders while at the same time destroying value for stakeholders," Sukhdev said. "This is bad management."
The UK announcement that all companies listed on London Stock Exchange will be required to report on their annual greenhouse gas emissions starting next year, is also huge and piggybacks on natural accounting. Common standards for the world's companies are likely to be ready in 3-5 years, with implementation across the world's stock exchanges in about 7 years.
Code REDD
The Code REDD Campaign launched with the commitment of five corporate champions including multinational financial services provider Allianz SE, global luxury sport & lifestyle premium brands giant PPR, Dutch sustainable energy utility Eneco, German renewable energy provider Entega, and the leading South African bank, Nedbank.
Entega pledged to support a project in the Democratic Republic of Congo, PPR will support a Kenya project, and Eneco will support the Surui Project in Brazil.
Code REDD is an emergency action campaign designed to motivate corporate leaders to save the threatened forests of the world, by dramatically increasing the demand for REDD+ (Reducing Emissions from Deforestation and Forest Degradation) emission reductions.
Founded by Wildlife Works, a leading REDD+ project development and management company, it's an open initiative that brings together corporate emissions reductions buyers, REDD+ project developers, indigenous forest owners, forest nation governments, NGOs, verification organizations, standards bodies, market platforms and other concerned entities to develop and finance high quality REDD+ projects.
Code REDD provides a solution to two of the most pressing issues of our time:
- How to stop the deforestation that is stripping the planet of its biodiversity, impoverishing forest communities and releasing massive amounts of pollution that are changing our climate forever.
- How to allow the marketplace to continue to provide energy goods and services to our growing global population without accelerating the negative impacts on our climate.
Code REDD enables corporations to reduce their effective carbon footprint by buying Verified Emissions Reductions from high quality REDD projects that stop deforestation, protect biodiversity, and create unprecedented sustainable development for forest communities.
Global Initiative on Urban Resilience (GIUR)
ICLEI (Local Governments for Sustainability) joined with six major organizations to build more resilient communities: C40 Cities Climate Leadership Group, U.S. Green Building Council (USGBC), the World Bank, Eye on Earth Summit, Johns Hopkins University School of Advanced International Studies Program on Energy, Resources, and the Environment and the Earth Council Alliance of Rio de Janeiro.
"Building more resilient communities and regions in the US and around the world is critical for our future," says Michael Schmitz, Executive Director of ICLEI USA. "Over the past several years our communities have endured economic recession, rising energy costs, and extreme weather events that have cost us billions. We need to prepare for these ongoing challenges and build communities that can bounce back and remain strong. This initiative will help mobilize the leadership and innovation of local governments and key stakeholders to achieve that goal.".
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You can track all the pledges - and whether they are fulfilled - at NRDC's www.cloudofcommitments.org. Commitments are searchable by sector, keyword or region.
UN's Compilation of Voluntary Commitments
Reuters Fact Box on Rio+20
Rona Fried, Ph.D. is CEO of SustainableBusiness.com and chooses the stocks for the Nasdaq series of Green Economy Indexes.
