Tuesday, June 23, 2015

Natural and social capital - separating the rhetoric from the action

Toby Webb asks Dorothy Maxwell author of Valuing Natural Capital – Future Proofing Business and Finance (Dō Sustainability, April 2015) how business and finance are engaging on natural and social capital.

Dr Dorothy Maxwell
TW: “Natural and social capital” are increasingly advocated as part of the corporate sustainability toolkit.  Is there a business case for valuing these or is this just a trend?

DM: Natural and social capital are trending sustainability topics and it can be difficult to separate out the rhetoric from their tangible role in solving sustainability challenges. 

Putting aside the jargon, the business case for maintaining the resources and critical support services nature provides (natural capital) is clear. It underpins the successful functioning of our businesses, economies and society at large. 

Over 60 percent of this capital, for example, freshwater, forests and biodiversity are in decline from over-exploitation and systems such as the ability to regulate climate and flood defences are failing. 

These are not just vital to our human wellbeing, financially the value of this to society is vast (social capital). Yet the market largely treats it as “free” which incentivises its degradation. However as resource constraints and the impacts of climate change continue to bite, these externalities are increasingly expected to be internalised through regulation and markets.

TW: So what is the financial value of natural capital?

DM: Conservative estimates value nature’s services to the global economy at approximately US$100 trillion/year (2011 figures). 

If Mother Nature sent an invoice for the global cost of environmental damage from business activities alone such as water pollution, loss of fertile land, soil erosion, drought, overfishing and deforestation this would be over $US6trillion/year. These costs are estimated to rise to $US28 trillion by 2050 if ‘business as usual’ continues. The important message this sends is the urgent financial rationale for reducing natural capital risk.

TW: Which business sectors have the greatest risks and opportunities?

DM: Sectors with the greatest risks and opportunities are those with high natural capital dependencies. Examples are food, energy generation, extractives, forestry, water utilities, pharmaceuticals, tourism and the financial services sector underpinning them. 

For example, an estimated 25–50 percent of the pharmaceutical market is derived from nature’s genetic diversity. It is estimated that one major drug is lost every two years due to natural capital degradation.   

Identifying the potential for Stranded Assets in investment decisions, such as for the fossil fuel energy sector, is a particular priority in light of sustainability challenges.  In addition to corporations, banks, pension funds, investors and insurers are increasingly looking at natural capital risk to inform assessment of material risks and opportunities in their portfolios. 

So if you are a business, managing your natural capital will mitigate risk, secure resource supply, resilience, maintain a licence to operate, profit, reputation and ensure long-term value creation.

TW: Does natural capital valuation help to inform assessment of risk & opportunity any more than existing tools?

DM: Assessing the environmental and social impacts of business is largely mainstream. Many tools, standards and schemes exist to support this. Assessing the dependency a business and wider stakeholders have on nature’s services is not. 

Measuring both impacts and dependencies gives a more holistic picture of risks and opportunities. Financially valuing these further translates this ‘non–financial’ information into ‘financial’. 

This common language can play an important role in communicating and prioritising sustainability at the CFO and board level. 

It can enable the most significant or ‘material’ (in financial accounting language) to be understood in commercial terms and the implications for the company and its wider business model.

TW: How are corporations and financial institutions “accounting” for sustainability?

DM: Businesses measuring the costs and benefits of their sustainability impacts and dependencies find this valuable to inform decisions on risk management, capital allocation, Net Present Value (NPV) and Return on Investment (ROI). Sustainability costs and benefits internalised in the market can be incorporated in existing management accounting techniques.  

Marks and Spencer (M&S) are a good example of how measuring the costs and benefits of sustainability in business demonstrates the financial business case. Using management accounting they have shown their Plan A (now Plan A 2020) sustainability programme has delivered savings of £465 million ($US701million) plus wider benefits including staff motivation, brand enhancement and supply chain resiliency over the seven years it has been operating. 

Externalities can also be estimated such as seen in the apparel company Kering Group’s Environmental P&L. They have used this information to inform raw material decisions in the supply chain. Some other examples from business are:

o   The Dow Chemical Company's integration of financial valuation of wetland services identified NPV savings of $US282 million for implementing a constructed wetland instead of an effluent treatment plant over the project’s lifetime, plus a wide range of non-financial biodiversity benefits.

o   The UK’s largest property and landowner, The Crown Estate determined their Windsor Estate delivers £4.4 million ($US6.6 million) per annum gross external benefit by measuring environmental, social and economic value.

As a Financial Institution, for many years, Inter-America Development Bank (IDB) has operated its Biodiversityand Ecosystems Services Program to inform its investments in Latin America and Caribbean region. This is one of the most biologically diverse regions in the world. Through this program, IDB assesses client dependency on nature’s services in ESG to inform lending decisions and to develop green investment products.

TW: Is valuation really just about commoditizing nature?

DM: This is not about commoditizing or privatizing nature, a common criticism of financially valuing nature’s services. The purpose of assigning a financial value is not to change the fundamental value of nature – which is arguably priceless. 

The importance of translating natural capital considerations into financial information is that it allows more informed decision-making especially on trade-offs. At the bigger picture level having a financial value for natural capital shared by society at large, as distinct from being perceived as ‘free’ can shift behaviour away from degradation to restoration.

TW: Beyond Carbon pricing, resource taxes and other market incentives to reduce natural capital degradation are being talked about. What are the key initiatives business should watch? 

DM: National accounting systems to support ‘Beyond GDP/GNP’ metrics are already being implemented in over forty countries by policy makers. This provides the foundation for future policy tools, for example, natural asset pricing, resources targets and taxation, to be developed. New markets driving carbon reductions, conservation of biodiversity, water, forests and sustainable investment are growing opportunities. 

The increasing number of country’s requiring mandatory sustainability reporting is a further driver for increasing financial and non-financial accountability. There are also many initiatives focusing on standardising business metrics for “Natural Capital Accounting”. However, until regulatory or market incentives require action, using these metrics is only a voluntary exercise.

TW: What is your one take away message?

DM: Simply put – societies, business and our economies depend on healthy and functioning natural systems and the resources and services they provide. This is our natural capital and just like financial and other forms of capital it is in our interest to preserve not deplete it.

Dorothy Maxwell PhD is Director of The Sustainable Business Group and author of the new book Valuing Natural Capital – Future Proofing Business and Finance (Dō Sustainability, April 2015)

She will be speaking at Innovation Forum's London conference next week on: The Measurement and Valuation of Corporate Sustainability – does it all add up? How to put hard numbers on sustainability risk – and quantify opportunity. 29th-30th June, 2015, London

100 executives from leading companies, investors, NGOs and business schools will gather to debate the area under the Chatham House rule. 

Friday, June 19, 2015

Forest commitments continue to strengthen

As another major Asian forest products business pledges sustainability practices, pressure increases on governments to keep up 

From the weekly Innovation Forum Business Brief. Sign up for weekly updates at: http://innovation-forum.co.uk
Environmental groups seem to be reaping the rewards of more than a decade of campaigning against the destructive practices of major companies involved in deforestation in Indonesia.

One by one, the big names have fallen into line. In 2011, Indonesia’s largest palm oil producer, Golden Agri-Resources (GAR), after sustained pressure from Greenpeace, put forward a forest conservation policy in which it promised to stop clearing tropical forests.

In 2013, Asia Pulp & Paper (APP), previously seen as a major forest-clearance villain, took similar steps.

APRIL joins the party 

Now another pulp giant, Asia Pacific Resources International Limited – better known as APRIL – has joined the ranks of the righteous. It has published a new sustainable forest management policy in June in which it pledges to no longer clear high-conservation value forest while also protecting peatland.

The conversions of the companies to more sustainable practices have elements in common – not least the prominent involvement of Greenpeace, and other activist groups. In each case, companies have caved in following pressure that led western brands to suspend dealings with them.

APRIL, for example, issued its new policy after a campaign had resulted in Santander pulling funding.

Second, the pledges adopted by the companies have resulted in partnerships with green groups that monitor the multinationals’ ongoing improvement efforts.

Judgement reserved 

The new zero-deforestation policies have all been welcomed by Greenpeace, but with caveats about how judgement should be reserved until the effects can be seen.

So far, the results seem to be much as would be expected. Greenpeace rates the companies as moving in the right direction but warns that this is a long-term endeavour, not a quick fix.

In a December 2014 report on GAR, for example, Greenpeace noted that progress was good in some areas, but mixed or limited in others. GAR deserved some kudos, but “the amount of unfinished work leaves absolutely no grounds for complacency,” Greenpeace said.

Pressure pays off

Nevertheless, it is clear that the campaigners’ strategy of consumer pressure on western brands which has a knock-on impact on Asian companies is paying off.

Richard George, Greenpeace UK’s forest campaign team leader says that the Indonesian companies’ changes of heart should be seen as an evolution: they are moving from rapid expansion-based business models to a greater focus on sustainability.

And the achievements so far should not be underestimated. APP and APRIL, for example, account for about 80% of Indonesian pulp, and about 60% of the global palm oil trade is now covered by sustainability commitments.

However, although companies are changing their behaviour, forest governance in Indonesia still has systemic problems.

Moratorium renewal 

In May the Indonesian government renewed a moratorium on new commercial activity in the country’s primary forest and peatland. This was welcome, but this is widely considered to be full of loopholes, detached from decisions made at local level that can lead to deforestation and lacking basic elements such as decent maps.

The next step to plug these gaps could be for Indonesia’s companies to learn another trick from their western counterparts: how to lobby effectively. Companies such as APP and APRIL should protect their own sustainability gains by ensuring they are not undercut by competitors with lower standards.

Companies are starting to get organised in this respect, for example by signing the Indonesia Palm Oil Pledge to push for better governance and sustainability standards.

The next step is for such initiatives to help tackle the systemic governance failings that mean forests in Indonesia – and elsewhere – remain under threat.

If you've any comments, do get in touch businessbrief@innovation-forum.co.uk

(We're bringing together companies such as APRIL, with leading players in the business, NGO and governmental areas, to debate practical progress in Singapore on 28-29 September. Join us here.

Future sustainable business dates for your diary:

Wednesday, June 17, 2015

Circular economy management briefing

Here's our new management briefing, on the circular economy, trends, company actions and how to take it to scale. Sponsored by Accenture Strategy. Thanks to them for that. Download it here.

Sunday, June 14, 2015

G7 leaders back measurement apps

Smart apps for measuring and comparing product footprints made the agenda at the recent G7 meeting 
The leaders of the G7 big-hitting economies had plenty to talk about when they met in Germany in early. The global economy, the conflict in Ukraine, terrorism, ebola – all were on the agenda. But, perhaps for some lighter relief, the G7 also apparently found time to discuss shopping apps.

According to the G7 Summit declaration, Obama, Merkel and the rest “welcome initiatives to promote the establishment of appropriate, impartial tools to help consumers and public procurers in our countries compare information on the validity and credibility of social and environmental product labels. One example is the use of relevant apps.”

These tools might not just be a help for consumers and public procurers who want to buy more sustainably. They could also help companies in the measurement and consolidation of their sustainability efforts.

Apps away

Two examples of apps that provide information on brands and the companies behind them are HowGood and OpenLabel.

HowGood, based in New York, has generated sustainability indicators on 137,000 food products, using data from sources including well-known labelling schemes such as the Marine Stewardship Council and the Rainforest Alliance.

It has coalesced this information into simple ratings of products as “good”, “great” or “best” for environment and society. The minimum rating (“good”) indicates that the product is in the top 25% of products on sustainability, while “best” products are in the top 5%. Products without a tag are those that fall outside the top 25%.

Scan then shop 

HowGood partners with supermarkets, which display the ratings on shelf-tags. Consumers can scan the tags with their smartphones to check what is behind the product ratings.

So far, the stores using HowGood tags are mainly ethical supermarkets and smaller groceries that would arguably only stock the most sustainable products in any case. Nevertheless, the scope for expansion is there.

OpenLabel, meanwhile is more like a TripAdvisor for products. It collates product sustainability reviews. In principle, its app works with any product with a barcode – simply scan to see what the reviews say. OpenLabel has received investment from Google and Amazon, among others.

Imprecise information?

OpenLabel also shows the risk to companies that might arise from proliferation of such apps. OpenLabel product reviews are not always obviously well-informed. A review of one milk product notes that it is “rBST-free,” meaning the cows are not treated with a synthetic hormone, but the cows are “probably” fed GMO feed. One coffee machine, meanwhile, is exaggeratedly described as a non-recyclable “crime against humanity”.

In the UK, the long-established Good Shopping Guide has been transformed into an app. William Sankey, founder of the Ethical Company Organisation, which is behind the guide, says that it rates companies rather than brands. Companies are assessed based on the sustainability information that they publish, on the credibility of their promises and targets and on the basis of third party information such as legal reports and studies by NGOs.

Critical friends 

Sankey says that companies should pay attention to sustainable shopping apps. They can be regarded as critical friends and lead to a “virtuous circle” in which companies can check what people are saying about them and take measures to fill in any gaps in their sustainability performance.

Crucially, the apps make it quicker, cheaper and easier for consumers to access sustainability information, and consequently more people are likely to do so. As more consumers pay attention, the pressure will grow for companies to accurately measure and track their sustainability performance, and to provide robust proof of their claims.

If you've any comments, do get in touch businessbrief@innovation-forum.co.uk 

Why smart business wants a clear climate deal

Companies must push for clear innovative leadership at the Paris climate summit, argues Paul Hohnen
In the run up to the COP 21 climate summit, companies are busily positioning themselves as “best dressed and most responsible” on the Paris climate leadership catwalk front.
Whether it’s Ikea pledging €1bn for clean energy and climate action, or European oil and gas majors calling for a carbon price, it’s clear that there is a new level of concern in business sector at the potential stakes.
Based on a more than two decade’s experience following corporate climate strategic thinking, here’s my list of the five top reasons why – more than ever – the private sector wants, and indeed needs, a good outcome in Paris.
1. The level playing field
The holy grail of business is a level playing field, the almost mythical space where competition takes place on equal terms. Companies not blighted by wishful blindness have long understood that climate change is the ultimate non-level playing field. Insurance companies were among the first to understand this, back in the 1990s.
Enhanced climate variability implies a constantly changing physical environment. In turn, this means more supply chain disruption, higher operating costs, rapidly changing consumer demands and increased risk of changing regulations – to name a few. The recent surge in business leader calls for a carbon price are explicitly driven by level playing field concerns.
Some degree of enhanced climate variability is already in the system, but it will make a big difference if we’re heading for 4C or higher, rather than around 2C. Climate change is set to create more losers than winners in the business space. The lower the increase, the more time for everyone to adapt.

Sunday, June 07, 2015

A big company tipping point on deforestation in Indonesia may have been reached

Back in March I taped a podcast with John Sauven who runs Greenpeace UK.

About 14 minutes in we discuss APRIL and the NGO campaign on deforestation against them.

During our meeting he described Asia Pacific Resources International Limited (APRIL) as one of: "the last big players which has not yet come to the table" on the stopping of natural forest clearance.

Last week and this weekend media around the world were reporting that :

"Asia Pacific Resources International Limited (APRIL) announced in Jakarta on Wednesday it had completely eliminated deforestation under its new sustainable forest management policy...

A victory for forest protection

...APRIL, which is Indonesia's second largest paper and pulp company, will now rely solely on plantations to provide the fibre for its pulp. The announcement comes after rival Indonesian company Asia Pulp and Paper (APP) announced in 2013 it would cease logging in natural forests.

This followed a decade-long Greenpeace campaign that cost APP more than 130 corporate customers including Disney, Mattel and Hasbro. Japanese paper mills had also begun to raise concerns.

APP and APRIL account for 80 per cent of Indonesian pulp production and were the only large-scale producers who used rainforest fibre. "This is a major step in our 15-year sustainability journey," said APRIL group president Praveen Singhavi."

This is of course great news all round. The arguments were complex, and sources I know close to APRIL have often said the company was more willing to compromise than NGOs would give it credit for.

Either way, the deal has now been done, and if I was a betting man I'd suggest this deal, as with the one with Asia Pulp & Paper will hold for many years.

The question now is, have we reached one of those famous 'tipping points' that we all love to write about and talk about?

I put it to John Sauven that the market demand in China and India for unsustainable natural resources may prevent this tipping point (20 mins into the podcast) from happening, in a general sense. "This might have been the case 10 years ago, but not today, the world is too interconnected" was his response.

His point is that all big companies want credible banking facilities to re-assure customers and secondly, that large Indian and Chinese companies are increasingly interlinked with Western brands. "The Unilever and Nestle's of this world are big in China too", he points out.

Let's hope that's right, and what's left of South East Asia's forests can be saved for big company over exploitation.

Three future areas of focus are now becoming clearer:

First, the arrangements that banks have to finance further or remaining/existing unsustainable resource extraction activities are going to come under increased focus for campaigners.

That's a long term trend but I can see it accelerating now. NGOs need targets. Banks make good ones.

Secondly the complex challenge of integrating sustainable forest management plans is now underway.

That's going to mean long term and incredibly difficult focus on both smallholder farmer livelihoods and general poverty alleviation in communities now becoming the major cause of deforestation in South East Asia

(perhaps Vietnam, Lao, Myanmar and Cambodia aside, I don't know the numbers / much about the situation there, except that it's bad, and very corruption driven/enabled)

Thirdly a new front is opening, and may be much harder to tackle. That of deforestation in Africa. A recent presentation I put together touches upon that (see slide four) and on general trends.

This may be even tougher to tackle than the issues companies, governments and NGOs struggle with in the Amazon or SE Asia, where fewer governments are involved.

The temptation to use cliches here abounds. Start of a journey, only just begun, a few battles won in the long war, etc etc. All may be true.

One thing that is clear, is companies are going to have to get a lot more granular in their supply chain information gathering, monitoring and management in the coming years.

That is, if they want to be seen to be on the right side of natural capital protection and secure sustainable resources for the future.

There are still many for whom this doesn't register. But at least after last week there's one fewer of those, in the shape of APRIL. That we should celebrate.

(We're bringing together companies such as APRIL, with leading players in the business, NGO and governmental areas, to debate practical progress in Singapore on 28-29 September. Join us here.

Future sustainable business dates for your diary:

Friday, June 05, 2015

Defining the circular economy

From the Innovation Forum weekly business brief. Sign up and join 10,000 weekly subscribers here.

The new EU proposals on circular economy regulation, if they are properly ambitious, could have real positive impact on how business operates
Jean-Claude Juncker: Kingmaker for Circular Economy 'Package'

What will the circular economy look like in practice? That, in effect, is what the European commission is asking in a public consultation published on 28 May. The results will be used in preparing a European Union circular economy package of legislation and other measures that, according to the commission, will be published by the end of 2015.

These EU-level developments, which could ultimately include binding regulations that will apply throughout the 28-country bloc, will potentially have wide-ranging effects on many sectors and companies.

At the very least, companies will need to look at their production and waste management processes to ensure they are not putting themselves at a disadvantage by ignoring resource efficiency concerns.

Thinking change 

The consultation marks a change in thinking among EU regulators. Until now, EU proposals related to the idea of the circular economy have focused on waste and recycling. In July 2014, the commission published draft legislation that would have instituted requirements for 70% of household waste to be recycled by 2030, 80% of packaging to be recycled also by 2030, and sending recyclable waste to land fill to be prohibited after 2025.

However, those proposals were subsequently withdrawn. They would have put the emphasis squarely on the public and private waste management industry to more rigorously collect and manage waste. They would have required companies to more closely pay attention to waste materials from production processes and post-consumer waste.

But they would essentially have been a tightening up of current practices.

More ambition?

With its new approach, the commission claims to be more ambitious. The circular economy package, when it appears in the second half of 2015, will cover sourcing of raw materials, product design, production processes and the lifecycle of products, as well as waste management. In this sense, the impact on companies could be far greater than the original package of waste targets.

The consultation takes it for granted that the circular economy is the way to go. It would “promote competitiveness and innovation, a high level of protection for humans and the environment, and bring major economic benefits, thus contributing to job creation and growth,” according to the consultation paper.

Useful insights
What is at stake therefore is not so much what should be done, but how. Take product design. Better, more reusable and recyclable products can be achieved through regulation, such as mandatory standards for durability, reusability and repairability, or companies can be encouraged and cajoled through voluntary schemes.

Voluntary vs mandatory 

Many companies already understand the rationale for moving towards more circular business models. They might prefer a largely voluntary approach. Environmental groups, meanwhile, are sure to call for tougher mandatory requirements.

One idea put forward by groups such as the European Environmental Bureau is that the previously-proposed recycling targets should be kept and augmented with a “preparation for reuse” target, meaning that a minimum proportion of used products should be repaired and reconditioned, rather than recycled or discarded.

This could have implications for product design, the information that companies provide about their products and intellectual property, as well as waste management.

What looks certain is that the previous target-based approach will be supplemented with a broader suite of measures covering a wider range of company operations. How intrusive these measures will be and which sectors will initially be most effected are yet to be decided.

If you've any comments, do get in touch businessbrief@innovation-forum.co.uk.

More like this can be found here: http://innovation-forum.co.uk 

We'll be publishing a series of articles related to climate, solutions and policy by Paul Hohnen in the coming weeks and months.

Future dates for your diary:

Thursday, June 04, 2015

Climate debate puts corporate power discussion into perspective

Remember anti-globalisation? 

Remember when right and left campaigners said 51% of the world's largest economies were companies?

When "Corporations rule the world", back in the late 1990s?

I recall going to confused anti-globalisation protests in 2000/2001. 

In Prague, where protestors got up at 5am to get ready to later storm McDonald's, and stood around drinking coffee beforehand from er, McDonald's. 

(Turns out it was the only place open at 6am in Prague 15 years ago that sold coffee)

Blaming big companies were all the rage then. Blaming them for the impacts of global commerce. 

Of course, executives in large companies rarely saw themselves this way. The negative impacts were mostly an accident, in that we failed to realise, or to know how to change, systems which caused negative externalities. 

Today most big firms outside fossil fuels (the coming pariah in the case of coal) do much more to ameliorate negative impacts. Often they don't succeed. There are, after all, lots of variables. Some mean it more than others, some fund it more than others. This is fairly clear today.

The climate debate to me, demonstrates a serious rebalancing of the sense of corporate power vs. government. Ever-larger groups of companies, from insurance to food to even energy, now hand wring in public about global carbon prices and taxes. And well they might, as the Guardian reports thus:

Paris climate pledges 'will only delay dangerous warming by two years'

The Guardian claims that: "Pledges made by countries to cut their carbon emissions ahead of a crunch climate summit in Paris later this year will delay the world passing the threshold for dangerous global warming by just two years, according to a new analysis.

The research, led by a former lead author on the UN’s climate science panel, found that the submissions so far by 36 countries to the UN would likely delay the world passing the threshold until 2038, rather than 2036 without the carbon cuts.

However, more than 150 countries have yet to submit their carbon pledges despite a deadline of the end of March. While most are relatively small emitters, commitments by big polluters such as India could significantly change the picture."

The last line here is significant. As is this quote: 

"What we see in the economic and technological potential for emissions reductions gives us hope that if governments are willing to move fast enough in the next 5-10 years, we might still make it. All that is lacking is political will.”

It's clear the 'globalisation power', companies were credited with all those years ago has been both revealed to be a little over done and now offset by greater knowledge of activities or impacts. This has driven significant change, not least by companies themselves now they are more aware of their impacts in the value chain. That's not to say the debate doesn't and shouldn't go on, as the TTIP conversation and negotiation shows. 

That corporate power so overtly debated in the last 15 years now needs to be turned to tackling climate change, if the science is right. 

Some companies are doing this, as we know. The Financial Times reports today that:

"Ikea, the Swedish home furnishing group, has vowed to spend €1bn on renewable energy and other measures to tackle climate change in a move that dwarfs what some countries are doing to address fossil fuel pollution." (More here)

Ikea thinks if companies emulate their investments “we would flip electricity generation into being renewable-based by 2020 or shortly thereafter,” said Steve Howard, Ikea’s chief sustainability officer.

Whilst we'd all like this to happen, the reality is most companies are not going to do what Ikea has announced it will do. Modern, dispersed and short termist shareholder capitalism will not allow it.

So perhaps the key question for companies today is, what can and should they do, when their own investments, CEO public pronouncements, group letters and other cries for GHG regulation do not drive governments to agreement on carbon prices, taxes and enforcement? 

This is most definitely the case today. 

Climate marches by concerned citizens also haven't yet delivered serious political will that lasts (look at the UK on decarbonisation and even Germany, on nuclear).

The question big business collectively needs to think about is, what can be done (outside the fossil fuels sector) to make governments pay attention? When lobbying and individual corporate investments fails, is there another course of action?

Will big business one day sponsor citizen climate marches? Ben & Jerry's advocating climate action is one thing, Unilever across all their brands another. 

Imagine that across every brand in the Consumer Goods Forum. Across emerging markets. 

Imagine every member of CGF hugely improving their public commitments to emissions reduction?

Companies can't really go on strike, like trade unions do to get government attention.

Leading companies, already undertaking fierce and consistent lobbying will be joined by those also making investments in energy efficiency, renewable energy technology, and in the case of energy firms, perhaps even carbon capture and storage (sadly lacking so far). 

Alongside this, collusion with citizen groups, and each other, to create mass pressure on governments may be the only way to literally, save the world. 

More like this can be found here: http://innovation-forum.co.uk 

We'll be publishing a series of articles related to climate, solutions and policy by Paul Hohnen in the coming weeks and months.

Future dates for your diary:

Wednesday, June 03, 2015

Sustainable business conferences for your diary later in 2015

Just a quick update with some dates for your diary. 

Here is what Innovation Forum is planning for the second half of the year:

A make or break issue for Asia’s corporate reputation?
28th-29th September, Singapore
For full agenda, brand line up, and who is coming, go here.

2) Ethical trade and human rights forum
A joint venture between IF and the Ethical Trading Initiative
19th-20th October, London
CEOs and big brand executives wanted: Contact Boris Petrovic    

Innovation in Sustainable Forestry: Technology, Risk and Collaboration
2nd-3rd November, London
A follow up to our recent successful events in London and DC, contact Charlenne Ordonez to suggest speakers or get involved.  

Two days of difficult debate about reality and solutions
9th-10th November, London
Contact Natasha Bodnar to suggest speakers or get involved.

A two-day business sustainability strategy conference
25th-26th November, London
Contact Tobias Webb to suggest speakers or get involved.

If you’d like to be kept up to date with any of the above, either follow the links or get in touch. 

If you have any questions – or if you’re interested in participating in an event, contact:

Oliver Bamford
Innovation Forum
Events and Insight for Sustainability
+44 (0) 203 780 7431
+44 (0) 7870 664 406

Friday, May 29, 2015

Indonesia’s forest moratorium – renewed if not reformed

While Indonesia’s continued moratorium on new forest commercial activity is welcome, it is time for more progress on enforcement 

On 13 May, Indonesia’s president, Joko Widodo, signed a “presidential instruction” that has the effect of extending for another two years a moratorium on new commercial activity in the country’s primary forest and peatland.

National Park burning, Riau Province, Sumatra
It was the second time the moratorium has been extended – it was first adopted in 2011, and renewed in 2013.

The moratorium’s original aim was “improving management of forest resources by ʻpausingʼ business-as-usual and allowing time to implement reforms”, according to the World Resources Institute. The Indonesian rainforest is the world’s third biggest, and its protection is vital, among other things, for reducing the country’s greenhouse gas emissions, 80% of which come from deforestation and the destruction of peatlands.

Four years on, business-as-usual – such as conversion of forest into oil palm plantations – remains paused. But despite this, there seems to be little real reform.

‘Space to improve’

Commenting on the renewal of the moratorium, Indonesia’s deputy minister for environmental degradation control and climate change Arief Yuwono says the objective was to “give more space to improve our management”.

Progress seems to have been slow on fundamental issues such as mapping. Yuwono says Indonesia is still working on getting a detailed overview of its primary forest as a “basis for management”.

Critics of the moratorium say it has too many loopholes, that there was a rush of new permits granted “in principle” ahead of the 2011 moratorium, that local governments continue to allow activities in areas supposedly covered by the moratorium and that areas have been re-designated to take them out of its scope.

Riau Province, Sumatra
In addition, WRI surveys have shown the moratorium is poorly understood by local officials. And enforcement is also lagging, with no specific powers to pursue violators, though Yuwono argues that the moratorium should be seen in the context of other laws and enforcement provisions that apply in Indonesia.

On the positive side...

But there is a more positive take on the renewal of the moratorium, which was put in place following an Indonesian agreement with Norway under which the Norwegians agreed to provide $1bn in support for better forest management.

Rannveig Formo, a forest and climate councillor at the Norwegian embassy in Jakarta, says that at least the moratorium has been extended. It was originally put in place by previous Indonesian president Susilo Bambang Yudhoyono, and has now been continued under the new government that took office in October 2014. “The fact that there is a continuation and not a weakening is a positive sign,” Formo says.

She adds that in some places the moratorium has been highly effective – even if in other areas implementation has been weak.

Deforestation decline 

Riau Province, Sumatra
Also, there is evidence that the moratorium has had some positive effect. A Norwegian preliminary analysis in April 2015 showed that deforestation in Indonesia declined by 48% between 2012 and 2013. Other factors probably contributed to this, such as zero-deforestation pledges from companies, but the moratorium may well have played a part.

But the best way of reinforcing the gains might be to promote a change of attitude. Instead of defaulting to new forest clearance for palm oil, for example, it would be better to improve the productivity of existing plantations through better management. Limiting new forest concessions might spur this.

Here is where brands can lend their support, by continuing to adopt and reinforce zero-deforestation promises while offering targeted support to help producers of commodities such as palm oil improve their practices. This could take the pressure off the forest, and help the Indonesian government to move more quickly in its forest protection efforts.

From the weekly Innovation Forum Business Brief, which is sent out to 10,000 executives each Friday. Sign up for it here. 

If you've any comments, do get in touch businessbrief@innovation-forum.co.uk

Relevant upcoming PPT free discussion event in Singapore, September:

How business can tackle deforestation - A make or break issue for Asia’s corporate reputation?

28th-29th September 2015, Singapore / Details here

With: Cargill, Sime Darby, Unilever, Asia Pulp & Paper, WWF, WRI, Robertsbridge, Rainforest Action Network, UBS, Center for International Forestry Research, Musim Mas, Asia Pacific Resources International Limited, Great Giant Pineapple, TFT, Wilmar International, Forest People's Programme

How business can tackle deforestation – A make or break issue for Asia’s corporate reputation? is the third in our global series of events in combating deforestation and designed to be an annual meeting place that discusses the trends, debates the issues, connects the key players and drives change. 

Through an interactive and engaging agenda, and by bringing together the corporate practitioners and NGOs that make a difference, the conference is designed to bring maximum value and maximum action. 

The legal risks of not knowing your supply chain – The latest trends and what they mean for business.
  • How business is responding – Hear how leading firms are putting targets into action.
  • Develop credible policy – Find out how to fit deforestation into your sustainability framework.
  • Beyond certification – In-depth critical analysis of certification’s limits, and how to go beyond them.
  • Leverage supplier engagement – Learn how to communicate with and incentivise your suppliers for improved traceability.
  • Successfully engage with government – How can business effectively engage with government to close the enforcement gap?
Sign up to attend or updates at: