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3 Signs of Progress in Curbing the Illegal Wood Trade

The global market for wood and other forest products is changing quickly. The industry has long struggled to address the problem of illegal logging, which damages diverse and valuable forests and creates economic losses of up to $10 billion a year. In some wood-producing countries, illegal logging accounts for 50-90 percent of total production.

But recent developments indicate that we may be turning a corner: Illegal logging rates worldwide have declined by about 20 percent since 2008.

This was the topic on everyone’s minds at the recent Forest Legality Alliance meeting in Washington, D.C. This meeting brought together nearly 100 members and experts representing a wide array of companies, trade associations, NGOs, and governments involved in the harvest, manufacturing, and trade of legally produced forest products.

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3 Ways to Achieve Zero Tropical Deforestation by 2020

This post was co-authored with Carita Chan, an intern with WRI's forests initiative.

As the crisis of tropical deforestation reaches a new level of urgency due to forest fires raging in Indonesia, an important question is how can the world satisfy the growing demand for forest products while still preserving forest ecosystems? This week, some of the world’s largest companies will join U.S. and Indonesian government officials in Jakarta at the Tropical Forest Alliance 2020 (TFA 2020) meeting to discuss this issue.

The meeting comes three years after the Consumer Goods Forum (CGF), a group of the world’s 400 largest consumer goods companies from 70 countries, announced their commitment to source only deforestation-free commodities in their supply chains and help achieve net-zero deforestation by 2020. The TFA 2020, a public-private partnership established in 2012 at the Rio+20 Summit, aims to provide concrete guidance on how to implement the forum’s pledge.

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New Integrated Reporting Framework Aims to Tackle Profit and Planet

This post originally appeared on The Guardian's Sustainable Business blog.

The way companies report on their financial status has changed little since corporate accounting standards were first created 80 years ago. Yet the world they operate in, and the risks and opportunities they face, have changed almost beyond recognition.

Global population has soared from two to seven billion, with human and manufactured capital now in abundance. Natural capital, on the other hand, has become scarcer and more precious. Once-plentiful forests, food, water, wetlands, minerals and metals are in short supply, creating supply chain and operational risks.

Today, a global coalition of regulators, investors, companies, and accounting organizations launched a new integrated reporting framework in six major cities, which aims to address this gap. The draft framework from the International Integrated Reporting Council (IIRC), based on input from 85 pilot companies and more than 50 investors, represents a much-needed milestone in the evolution of corporate reporting.

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Accounting for Environmental Externalities Is Good for Business and the Planet

This post also appears on Greenbiz.com.

This is Part Four of a five-part blog series, Aligning Profit and Environmental Sustainability. Each installment explores solutions to help businesses overcome barriers that prevent them from integrating environmental sustainability into their everyday operations. Look for these posts every Thursday.

David Roberts at Grist, the online environmental news organization, commented on Twitter last week that “people talk about ‘externalities’ like they are just bad vibes or something. But that money is real money. Those costs are real costs.” How real is that money? Dr. Pavan Sukhdev, author of The Economics of Ecosystems and Biodiversity and Corporation 2020, claims that these “externalities”—or costs to society from carbon emissions, water use, pollutants, and other byproducts of business activities—are more than $2 trillion.

Putting a financial value on these environmental costs can help businesses make better informed decisions about how they manage their environmental risk. Not all companies recognize this—and even fewer actually know how to value these externalities correctly. But a few corporations are starting to show us the way.

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Factoring Sustainability into Financial Decision-Making

This is Part Three of a five-part blog series, Aligning Profit and Environmental Sustainability. Each installment explores solutions to help businesses overcome barriers that prevent them from integrating environmental sustainability into their everyday operations. Look for these posts every Thursday.

This post also appears on Greenbiz.com.

A large, multi-national company likely spends hundreds of millions of dollars every year on new projects. How these projects are designed, constructed, and operated clearly impacts costs in the short-term, but also poses huge implications for a company’s “sustainability footprint” in the long-term.

A major challenge is that most corporate sustainability experts within a business are not involved in capital budget requests at the outset. A company’s financial leaders make investment decisions with upfront costs and projected revenues in the front of their minds. They are far less likely to take into account a project’s potential environmental risks and benefits. Not coordinating financial and sustainability decisions can lead to projects that are cost-efficient to build today, but may not hold up to sustainability pressures over their lifetime. For example, a company might invest in a factory that is inexpensive to build, but then realize that it’s in a location that locks them into buying only fossil fuel-based energy sources.

The lack of integration between financial and sustainability-related decision-making is a main barrier to scaling truly impactful corporate environmental sustainability. But as WRI found in its new working paper, Aligning Profit and Environmental Sustainability: Stories from Industry, there are companies who are starting to show us ways of overcoming this challenge.

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4 Barriers to Overcome in Achieving Corporate Environmental Sustainability

This post also appears on Greenbiz.com.

This is Part One of a five-part blog series, “Aligning Profit and Environmental Sustainability.” Each installment will offer solutions for businesses to better integrate environmental sustainability into their everyday operations. Look for these posts every Thursday for the next four weeks.

Implementing corporate environmental sustainability strategies is increasingly becoming standard practice. For example, more than 300 of the S&P 500 report their greenhouse gas (GHG) inventories each year to the Carbon Disclosure Project, and companies from the Fortune 100 and S&P Global 100 are investing billions of dollars to reach renewable energy procurement targets. Some companies are going further and taking steps to reduce the environmental impact of their products, services, and supply chains.

Despite this encouraging progress, a confluence of global environmental challenges is putting more pressure on corporate environmental sustainability strategies to get to scale quickly. Not enough global businesses have integrated environmental sustainability into their long-term decision making. And, as it stands today, existing practices are not enough to protect the natural resources that society and businesses depend on.

WRI examines this gap between existing corporate sustainability practices and the environmental protection needed for the 21st century in our new report, Aligning Profit and Environmental Sustainability: Stories from Industry. We interviewed sustainability managers from AkzoNobel, Alcoa, Citi, Greif, Johnson & Johnson, Mars, Natura, and Siemens to better understand why strategies that are good for both business and the planet are not getting to scale.

We identified four barriers in these discussions, as well as ways companies can overcome them:

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Water Risk to Business Is No Small Drip

At the World Economic Forum in Davos two weeks ago, I was struck by how often the issue of water risk was raised by business executives. As the global economic turmoil is receding, many CEOs and global leaders are turning to other threats—and water is high on the list. For the second year in a row, water crises were named among the top four global risks at the WEF.

It’s easy to see why. More than 1.2 billion people already face water scarcity. By 2025, two-thirds of the world population will experience water stress. That’s largely due to population increase and climate change, but also behavior patterns: Water use grew twice as fast as population growth in the 20th century. The “food-water-energy nexus” was one of the top four megatrends to watch in the recently released Global Trends 2030 report by the U.S. National Intelligence Council.

CEOs increasingly recognize that water is essential for their business models and economic growth. Disrupted availability of affordable, clean water leads to business interruptions, increased commodity costs, and reduced earnings. The extreme drought gripping much of the United States is likely to cost up to one percent of GDP, potentially making it the costliest natural disaster in U.S. history.

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New Ventures

Voices of the Entrepreneurs

“Voices of the Entrepreneurs” is both a celebration of what New Ventures has achieved so far and a springboard to its future. This report highlights the experience of 32 New Ventures entrepreneurs and provides valuable insights into the challenges that hinder the growth of environmental...

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