Agreement on environmental reporting can’t hide looming disappointment in Rio
It’s become apparent in Rio that the international community is struggling to come together.
After nearly two years of negotiations on the Future We Want document, which is to set out targeted sustainability goals for green economic development, the realisation that agreement on many substantive points was unlikely to be reached arrived like a giant thud on Thursday June 21.
Political grandstanding took place in the main plenary hall, while in smaller side events NGO heads and elected officials alike lamented the missed opportunity that seemingly has now passed.
Nevertheless, there were pockets of encouragement, particularly from nations such as Germany and Denmark that are now actively decoupling their economies away from fossil fuels.
Clean energy can be the backbone of energy supplies around the world but it “needs politicians to set the regulatory framework enabling private companies to turn their visions into concrete results and solutions,” declared Denmark’s prime minister, Helle Thorning-Schmidt, at a panel discussion aimed at moving beyond GDP measurements of human development.
Green growth
Denmark, which now holds the presidency of the European Union, has attempted to create a space for public-private partnerships through its Global Green Growth Forum. This is a multilateral initiative that it co-chairs along with Mexico and South Korea.
Thorning-Schmidt said Denmark is also actively pushing to frame the debate differently. “We know GDP is insufficient because it doesn’t incorporate our natural capital. Why?” the prime minister asked. Answering her own question, she said: “Because it’s difficult to measure the economic gains of a green transition.”
She concluded: “A greener GDP measure can guide politicians when making decisions on environmental issues and that’s why we’re so interested in looking into this.”
Valuing natural capital has been a big theme at Rio – with the launch of the Natural Capital Declaration and a natural capital summit convened by the UK government that garnered considerable headlines.
Nearly 40 banks, investors and insurers now back the Natural Capital Declaration along with more than 50 national governments. The declaration is a pledge committing companies to reporting or disclosing natural capital in accounting frameworks.
Environmental value
Puma is, of course, the highest profile company to do this so far, having devised an environmental profit and loss (EP&L) account in 2011.
“The EP&L serves to move the agenda forward as an exercise to focus senior management towards pinpointing and actively reducing impacts,” said Jochen Zeitz, executive chairman of Puma and chief sustainability officer of parent company PPR.
“Our EP&L results showed social environmental impacts were €145m,” Zeitz told the audience at the natural capital summit. “That is to say, the production and sale of our products devalued natural capital of the world by the same amount.”
In the future, thanks to the new declaration, more companies will be able to declare an equivalent measurement.