Cropper at the Press Conference for the Launch of The Economics of Ecosystems and Biodiversity (TEEB) for Business Report
London, 12 July 2010 - Dear colleagues, members of the press:
Thank you for your interest and attendance today.
This is a critical report for the business community and its vital role in addressing biodiversity loss - both in terms of future implications for profitability and planning - and defining ways and means to embark upon a new era of business sustainability.
From what we've heard today and in previous studies, there is a moral, financial and development imperative for business to understand and act upon the link between natural resources, the supply chain, consumer demand and the effect on its profitability and share prices. This is also the time to make strides as a dynamic driver in the global transition to a Green Economy.
Why now? We have no choice. The global financial and concurrent ecological crisis provides a window to address our market failures and ecological overshoot with new vigor. Secondly, in everyday language - we're up against a wall.
For over two decades, we've been measuring and predicting the value of our nature based futures, wondering if our stock would increase or diminish? We've survived on credit, ran up expenses, spiraled into debt and now as the science shows, we are dangerously close to a severe reduction of many essential services as ecosystems shift to states from which it may be difficult or impossible to recover.
A first step is making the value of ecosystems visible in the accounts of government and businesses alike. This is part of TEEB's catalytic role. A new awareness combined with intelligent fiscal policies - which may include, for example, subsidies that support both the economy and the environment, incentives to unleash green markets, improved corporate governance and appropriate regulation, as well as other solutions outlined in the report, can spur important changes and improvements for business and biodiversity - our "natural capital."
Biodiversity is disappearing at up to 1,000 times the natural rate, and ecosystems are functioning less and less effectively.
About 60 per cent of ecosystems have been degraded or used unsustainably, including provisioning (food and fibre) and regulating services (climate, flood, water purification).
Around 50 countries face moderate or severe water stress.
By 2030, it is thought that water scarcity could cut agricultural harvests by 30 per cent.
If numbers or statistics we've heard today, either about biodiversity loss or the value of ecosystems seem at first too abstract or too distant, there can be no denying that we are already feeling the effects of biodiversity loss: rising food prices, a lack of once commonly available fish, some of the worst droughts in a decade affecting exports basic foods and in the worst cases, causing severe food shortages and widespread hunger.
Industry Trends - Risks and Opportunities
According to a 2008 UNEP Finance Initiative report, some immediate risks to business from biodiversity loss include access to land, access to capital, a company's reputation, access to markets and ultimately, a lack of raw materials.
An example -increasing cod prices reduced related product margins by 30% as calculated in 2008 for Unilever.
As for sectors impacted by biodiversity loss, the list is long. Agriculture, energy, fisheries, mining, tourism, cosmetics, food and drink production are all at risk if we carry on business as usual.
If we know or are beginning to fully understand the risks, what are the opportunities? There are too many to list here -but perhaps the highest political expression measuring the economic and ecological value of forests, is the REDD (Reduced Emissions for Deforestation and Degradation) initiative.
Under the UN's climate agreements, countries are now moving to pay developing nations to conserve rather than fell forests. It is also an area in which the private sector enterprise can also excel.
Take the Walt Disney Company. In November last year it publicly pledged to provide $4 million to develop large-scale REDD forest carbon projects in Peru and the Democratic Republic of the Congo (DRC).
Looking at other alliances, WWF the conservation organization is working with Coca Cola to conserve freshwater resources across seven key watersheds; and to improve the efficiency of the Coca-Cola system's water use.
Some businesses such as the retailer Marks and Spencer have made their brand synonymous with sustainability.
The increase in global sales of organic foods and drinks reached 50.9 billion US dollars in 2008, according to the International Federation of Organic Agriculture Movements and is an opportunity for increasing trade and income in developing countries.
I live in Kenya, home to UNEP headquarters. Developing countries often feel the impacts of resource depletion first. To give you one high profile example - the Mau Complex is the largest closed-canopy forest ecosystem of Kenya and is the most important water catchment in the Rift Valley and western Kenya. It supports key economic sectors including energy, tourism, tea, rice, subsistence crops and livestock.
Services delivered such as hydropower, drinking water, moisture for the tea industry and water to key tourist attractions are worth an estimated $320 million a year. That figure was based on a calculation in 2008.
The Kenyan Prime Minister Raila Odinga has called the destruction of nearly a quarter of the Mau Complex area over the last 15 years, "nothing less than a national emergency."
However, at the beginning of June, it was announced by the Kenya Forest Research Institute that ecosystem services of the Mau may be more like $1.5 billion a year - after adding drinking water provision to cities and carbon storage of greenhouse gases.
The Mau is in urgent need of restoration and business interests are fully engaged in helping restore the Mau. Is it self interest? My question to you as journalists - does that matter?
Equity Bank, East African Breweries Ltd and Nation Media Group recently joined hands with Kenya Wildlife Service and the Greenbelt Movement and established the Save the Mau Trust. They are also considering "adopting" a Forest Reserve of over 20,000 acres. Finlays Tea is looking into adopting 250 acres in Western Mau.
Echoing Lord Stern's famous description of climate change as "the greatest and widest-ranging market failure ever", the destruction of the natural world is "a landscape of market failures". In this International UN Year of Biodiversity, business, government and consumer power now have the chance to challenge this and the status quo.