Presentation on theme: "1 UNGC Module 2 – Session 1 MODULE 2 - THE BUSINESS CASE Session 1: Setting the Scene The State of the Global Environment THE UN GLOBAL COMPACT."— Presentation transcript:
1 UNGC Module 2 – Session 1 MODULE 2 - THE BUSINESS CASE Session 1: Setting the Scene The State of the Global Environment THE UN GLOBAL COMPACT
The State of the Planet: Cause for Concern?
3 UNGC Module 2 – Session 1 Climate change Freshwater scarcity Biodiversity loss Collapsing fisheries Soil erosion Cropland and forests loss Increasing population Growing waste Growing consumption The State of the Planet Issues of concern: An overview
4 UNGC Module 2 – Session 1 The State of the Planet Climate Change (1) Diagram from IPCC
5 UNGC Module 2 – Session 1 The State of the Planet Climate Change (2) Diagram from IPCC
6 UNGC Module 2 – Session 1 The State of the Planet Access to water is arguably the worlds most urgent resource issue –Every year about 5 million people die due to lack of access to water & sanitation –Almost 30% of people live in countries suffering moderate-to-high water stress –By 2025 more than 4 billion people will be living in water stressed countries Between global freshwater consumption rose six-fold, more than double the population growth rate More than 20% of the world's freshwater fish species have become extinct, threatened, or endangered in recent decades In 60% of the European cities with more than 100,000 people, groundwater is being used faster than it can be replenished Resource Depletion - Freshwater
7 UNGC Module 2 – Session 1 The State of the Planet Population Growth
8 UNGC Module 2 – Session 1 The State of the Planet Population is not the main problem of environmental degradation, but rather consumption and production patterns There is a need to find an appropriate balance between: –The basic needs of the current population (food, shelter, health, clothing) –The needs of future generation –This requires balancing inter- and intra-generation equity Population Growth, Consumption and Production
9 UNGC Module 2 – Session 1 The State of the Planet Unsustainable Consumption Energy consumption (TJ) Greenhouse gases (t) CFCs (Kg) Waste (t) Toxic waste (T) Passenger cars Steel consumption people harm the environment annually by the following factor In Germany Developing Country
10 UNGC Module 2 – Session 1 The State of the Planet Inequalities in Consumption 1.3 billion people live on less than 1 US dollar a day The overall consumption of the richest fifth of the worlds population is 16 times that of the poorest fifth Nearly 160 million children are malnourished More than 880 million people lack access to health services 1.5 billion lack access to sanitation and clean water
11 UNGC Module 2 – Session 1
12 UNGC Module 2 – Session 1 The State of the Planet Consumers Share of National Country (millions) Population (%) United States Japan Germany 7692 Russian Federation Brazil China India Unsustainable Consumption Global Consumer Class: Selected Nations (2002)
13 UNGC Module 2 – Session 1 The State of the Planet Year Private cars million million million million (estimated) Car Growth in China
14 UNGC Module 2 – Session 1 The State of the Planet Ecological Footprints
15 UNGC Module 2 – Session The State of the Planet Consequences: Four Earths needed in 2100
16 UNGC Module 2 – Session 1 Mixed messages from consumers … Id like to end poverty, stop violence and racism, and get rid of pollution. Everyone should be equal. I want to dress in the nicest clothes, drive a great car, talk on the latest mobile phone, and watch my brand new DVD
17 UNGC Module 2 – Session 1 The State of the Planet 20% of the worlds population consumes 80% of its resources. If everyone consumed at this level, it would take four extra planets to provide the necessary resources. Global marketing of this consumer lifestyle is headed for natural disaster. The Ecological Footprint The need for increased resource efficiency Resource use and pollutant discharge will need to decrease to less than 10% of current OECD levels to reach sustainable equilibrium by Netherlands Council for Environment & Nature
18 UNGC Module 2 – Session 1 Fundamental changes in the way societies produce and consume are indispensable for achieving global sustainable development. All countries should promote sustainable consumption and production patterns... Governments, relevant international organizations, the private sector and all major groups should play an active role in changing unsustainable consumption and production patterns. WSSD Johannesburg Plan of Implementation, Sept The State of the Planet The implementation gap
19 UNGC Module 2 – Session 1 Business shifts for natural capitalism –Dramatically increase resource productivity –Eliminate the concept of waste: build on biologically inspired production models –Re-investing in natural capital –Re-invest in people and social systems The State of the Planet Factor Four improvements
20 UNGC Module 2 – Session 1 The State of the Planet We cannot continue to do what we have always done, only incrementally better, and expect to achieve sustainability. If sustainability is to be achieved, we will have to rethink virtually all of our industrial processes. Edgar S Woolard - Former CEO of Du Pont The need for change
21 UNGC Module 2 – Session 1 Understanding the interrelation between eco-efficiency and sustainable consumption - the rebound effect –In terms of the rebound effect, the productivity/efficiency gains achieved through cleaner production and eco-efficiency measures are being overtaken by the overall increases in production associated with growing consumption patterns –While problems of production process are understood, there is generally an important gap of understanding in terms of the consumption (use) and disposal of products –Environmental concerns are not sufficiently integrated into economic and social programmes and vice versa The State of the Planet Sustainable consumption
22 UNGC Module 2 – Session 1 Promoting sustainable consumption and production New product-oriented strategies (life cycle perspective, design and manufacture) Understanding consumption Integrated approach of sustainable consumption and production De-linking environmental damage from economic growth The State of the Planet The Challenge
23 UNGC Module 2 – Session 1 There is no Sustainable Consumption without Sustainable Production and vice versa The State of the Planet
24 UNGC Module 2 – Session 1 So what has been the response of the corporate sector to the global environmental challenges?
Redesign Incremental change Rethink Time Improvement in environmental quality Long investment time in R&D Low hanging fruit From Arthur D Little - Sustainable Industrial Development 1996
26 UNGC Module 2 – Session 1 A Brief History of Corporate Environmentalism Broad Phases of Corporate Environmentalism –Before the 1960s: Blissful Ignorance –1960s and 1970s: Confrontation / Reluctant Compliance –1980s: Beyond Compliance –1990s: Changing Course –Beyond 2000: Sharing Responsibility?
Evolving Business Behaviour on Sustainability Issues
Evolving Business Behaviour on Sustainability Issues
29 UNGC Module 2 – Session 1 A Brief History of Corporate Environmentalism 1960s and 1970s - Reluctant Compliance –Growing public consciousness about the natural environment Publication in 1964 of Rachel Carsons Silent Spring 1970 Earth Day demonstrations Publication in 1972 of the Club of Romes Limits to Growth and The Ecologists A Blueprint for Survival 1972 Stockholm Conference on the Human Environment –Businesses began: Building internal technical capacity on environmental issues Installing pollution control measures and initial networking But largely a defensive role Social activities focus mainly on philanthropy
30 UNGC Module 2 – Session s – Beyond Compliance –Increasing pressure to improve performance: Major industrial incidents: Bhopal accident (India, 1984) and Sandoz chemical spill (Switzerland, 1986) Brundtland Report in 1987 put the concept of sustainable development squarely into the international policy arena –Business began to: Develop environmental policies with specific performance commitments Appoint dedicated staff functions, and increase line management integration of environmental and social responsibilities Implement pollution prevention and cleaner production techniques Undertake greater networking with other companies on environmental and social issues (eg chemical industrys Responsible Care initiative) Develop tools such as environmental audits A Brief History of Corporate Environmentalism
31 UNGC Module 2 – Session s – Changing Course –Increasing international policy action on environmental and sustainable development issues Rio Earth Summit in 1992 Growing number of Multilateral Environmental Agreements (eg the UN Framework Convention on Climate Change) –Business response signified by institutionalisation and innovation Launch of the ICC Business Charter in 1991 Formation of World Business Council on Sustainable Development Development of ISO environmental standards Increase in environmental and social reporting practices Development of innovative technological solutions, as well as tools such as life cycle assessment, design for environment & product stewardship A Brief History of Corporate Environmentalism
32 UNGC Module 2 – Session 1 Beyond 2000 – Walking the Talk? –Key strategic trends impacting global companies Growing NGO and community pressure for greater corporate transparency and accountability Increasing activism of institutional investors and the financial community, compounded by post-Enron disenchantment with traditional analysis Tightening global and domestic regulatory pressures (eg the Kyoto protocol, European pension fund requirements) Increasing appreciation of the business case for sustainability and a gradually growing acceptance of the need to address sustainability concerns A Brief History of Corporate Environmentalism
33 UNGC Module 2 – Session 1 Corporate Environmentalism: Strategic Trends Growing NGO and consumer pressure for accountability
36 UNGC Module 2 – Session 1 Climate Change Litigation "What we're seeing is an emerging area of climate litigation. As the impacts of climate change worsen, the number of potential plaintiffs, and the range of legal actions available to those plaintiffs will undoubtedly increase." Australian Product Liability Lawyer International –July 14 launch of Climate Justice Program, alliance of 70 NGOs, lawyers, academics and individuals in 29 countries that seeks enforcement of existing laws to hold the perpetrators of climate damage accountable and liable. Australia –Climate Action Network Australia notified directors of the top 200 listed companies of financial risks and legal obligations of climate change. Targeted major GHG emitters, as well as property financiers. Companies expected to respond by undertaking risk assessment of climate change exposure. USA –Eight US States and New York City launched a public nuisance lawsuit against five of the USs largest power companies – 21 July 2004.
37 UNGC Module 2 – Session 1 Indicators of the next wave of corporate responsibility –Sustainability reports –Strategic partnerships –Participation of financial markets –Academia and education –Media Corporate Environmentalism: Strategic Trends
38 UNGC Module 2 – Session 1 In the next society, the biggest challenge for the large company - especially for the multinational - may be its social legitimacy: its values, its missions, its vision. Peter Drucker Corporate Environmentalism: Strategic Trends Corporations in the next society?
39 UNGC Module 2 – Session 1 Corporate Sustainability: An ideal company? Corporate Sustainability: Features of an ideal company? –Integrates environmental and social issues into its core strategy –Quantifies the social and environmental costs of its activities –Displays innovation throughout the full life cycle of its products and services –Implements sound corporate governance practices –Is committed to transparency and accountability –Promotes meaningful change amongst its peers, within its neighbouring communities, and throughout its supply chain
40 UNGC Module 2 – Session 1 Corporate Sustainability Further resources: Catalysing Change (UNEP): The Natural Step: World Business Council for Sustainable Development: World Resources Institute : Wuppertal Institute: