Speech prepared for delivery via video at the United Nations Global Compact virtual Leaders Summit.
We are in the midst of the intensifying triple planetary crisis of climate change, biodiversity and nature loss, and pollution and waste. A triple crisis that threatens human health, prosperity, equality and peace – as we have seen only too clearly in COVID-19. A triple crisis that also threatens the operations of businesses, big and small, across the globe.
Sustainability is, on every level, in the best interests of business. This is because the financial implications of the triple crisis are countless: from reduced commodity yields to changing consumer attitudes and operational environments.
One recent survey found that 73 per cent of people would change their consumption habits to reduce their impact on the environment. A court in the Netherlands ordered Shell to cut its emissions. Chevron shareholders voted to cut pollution. This is just the beginning of a sea change that will sweep away those companies that follow the status quo.
For the sake of the planet, and for the sake of long-term profitability, big business has to be proactive and lead change. So, how does business reform?
The first step is to start accounting for the value of nature. UNEP is encouraging governments to use natural capital alongside produced and human capital to deliver a true, inclusive measure of growth. The same applies to businesses. If a business is making money in the short-term, but damaging the planet in the long-term, it needs to reflect this in the balance sheet.
The next step is to set science-based targets for nature, climate and pollution. This means adopting a transparent and time-bound plan for net-zero operations. That means ensuring that business operations are nature positive; It means adopting circular models, to reuse and recycle resources. And it means dealing with the toxic trail of pollution that industry and business can leave behind.
The third step is to hold suppliers and trading partners to high standards. We are talking about being comprehensive and holistic. A business’s internal operations can be squeaky clean, but if it is outsourcing environmental damage either domestically or abroad, it is still part of the problem.
All of this applies equally to investors, bankers and insurers. We can no longer afford to have ethical finance on the fringes. These issues cannot merely be left to the CSR Director, but must be the key business principle held in the C-suite and by the CEO. They must power the change. We are seeing every-stronger commitments on this front. We have 229 banks, covering one third of the global banking industry, signed up to the Principles for Responsible Banking. The Net-Zero Banking Alliance (NZBA) has 44 banks with USD 30 trillion on board. The Net-Zero Asset Owners Alliance brings together 40 asset owners with USD 6 trillion to work towards decarbonization.
Finally, we need transparency and independent oversight on these process and commitments to avoid greenwashing. Greenwashing is a cynical attempt to gain the financial benefits of a sustainable profile without doing any of the work. It directly harms our efforts to build a better world.
Because of course. Businesses run on earnings and profitability. And that is a fine thing. But there can be no profit, if there is no planet. Backing sustainability is the only sensible way to boost the corporate bottom line and to makes everyone’s lives better. And the private sector needs to lead the way.
Thank you.
Executive Director
