Remarks by Nick Nuttall, Spokesperson to UN Environment Programme Executive Director and UN Under-Secretary Achim Steiner Wed, Nov 21, 2012

At the Launch of the E-RISC Report of UNEP FI

London, 19 November 2012- Ladies and gentlemen,

We meet some six months after Rio+20 held in Rio de Janeiro, Brazil in June.

 A Summit that came amidst a backdrop of an on going financial and economic crisis at least in some parts of the globe and where a sovereign debt crisis still dominates the headlines in Europe and elsewhere.

Rio+20 was not a summit of big new treaties-it was designed to be a summit of finding the means of implementing sustainable development.

UNEP pinned its colours in the run up to Rio+20 to the Green Economy.

In collaboration with many partners, UNEP convened the economists and the experts to assess how a transition to a low carbon resource efficient Green Economy.

An economy where growth is significantly decoupled from natural resource use, where investments deliver on multiple fronts-environmental, economic and social-and an economy able to deliver perhaps the biggest political challenge of all, everywhere: significant numbers of jobs, decent jobs, for young people.

Overall such an economy would be one where environmentalists become more economically literate and economists grasp a wider understanding of wealth and the risks to economies and whole supply chains from ecological shocks and natural resource scarcities.

So did Rio+20 deliver-and does it outcome document, The Future We Want offer a possibility of a different kind of development path for seven billion people, rising to over nine billion by 2050?

Are there in the seeds of that outcome and the follow up processes underway at the UN in New York and elsewhere represent a possible transformation of our economies and better ways of managing risks-including E-RISC in respect to sovereign debt?

The answer is a cautions yes.

Heads of State and governments enabled the inclusive Green Economy, in the context of sustainable development and poverty eradication as one important tool towards realizing a sustainable century.

UNEP, in collaboration with partners including the UN Industrial Development Organization and with funding from the Republic of Korea Are now moving forward on an initiative called PAGE-a partnership for auctioning a green economy in developing countries.

Other nations are now also developing pathways to a Green Economy-last week experts in China predicted that $1.28 trillion will be invested in green development as part of its 12th Five Year Plan up to 2015 for example.

Other encouraging pathways, aimed at realizing an inclusive Green Economy that may reduce risks linked with climate change and ecological scarcities, also emerged at Rio+20.

Beyond GDP

Governments agreed to work towards a new indicator of wealth beyond the narrowness and bluntness of GDP.

The work to craft a new indicator is already underway building on work by the UN statistical office.

Some of this work dovetails with the UNEP-hosted The Economics of Ecosystems and Biodiversity where nations from Brazil to India are valuing the multi-billion, multi-trillion dollar global services provided and generated by nature-from forests to freshwaters-as a step towards building these wealth indicators into mainstream economic and development planning.

It dovetails with the WAVES Partnership (Wealth Accounting and Valuation of Ecosystem Services).

Other encouraging signs are an evolution of corporate sustainability reporting-an initiative led by countries including Brazil, Denmark, France and South Africa supported by UNEP and the Global Reporting Initiative.

Since 1992 and with assistance from UNEP FI, some 25 per cent of large companies report their environmental, governance and social footprints-but 75 per cent do not.

The new initiative is looking to transform corporate sustainability reporting from an opt in to an opt out landscape-a situation where companies have to explain why they do not want to report rather than the other way round.

Sustainable procurement by countries and cities and the go-ahead for a 10 Year Framework of Programmes on sustainable consumption and production also represent steps forward to a more sustainable 21st century.

As do the designing of Sustainable Development Goals by 2015-goals that could bring the North and the South into common cause underpinned by new indicators of sustainability.

It against this promising backdrop that UNEP fi with many partners present the E-RISC report and initiative today.

While some of the previous initiatives are in large part multilaterally and government driven, we also need a complimentary, supportive pathway that is "business focused and business driven".

The drive from food and beverage companies such as Unilever and others to reduce the net environmental impact in their whole supply chain is a good example.

The 'E-RISC report' launched here and aimed at informing your discourse and ultimately action is part of this thrust.

The fact is that while markets may be factoring environmental, social and governance factors into some stocks and share-and while there are several inspiring indexes in place from the Bovespa sustainability index in Brazil to the Footsie for Good in the UK-capital markets are currently all but silent on ESG issues in respect to debt including sovereign debt.

A big reason for not doing so is the perceived level of immateriality.

A second major reason is more technical of nature - namely the difficulty linking ESG factors with mainstream economic and credit risk factors.

The E-RISC report represents a good starting point for bridging these two worlds.

On the one hand it has provided the economic and financial arguments to bond holders, rating agencies and others that natural resource and environmental risks ought to be factored in mainstream sovereign credit risk analysis.

Second, it has also provided a first attempt in identifying how these factors can be integrated in sovereign credit risk analysis.

Your meeting here can, through an in-depth debate, take these issues forward and I look forward to an intense and productive discourse.

We are living in a time where climate change can, almost overnight, disrupt supply chains across the globe.

Where natural resource declines threaten prosperity and our abilities to overcome poverty.

The science is clear-without better valuing and incopoerating the natural capital and its productivity into markets including debt markets we are not on a road from Rio, but a road to nowhere.

There are many positive signals emerging and many inspiring actions by governments, cities, companies and investors-the challenge is to bring these from the fringe into the mainstream.

Your presence here at Bloomberg underlines that you share a similar vision.

Thank you.

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