International leaders from business, government and non-governmental organizations gathered in Singapore this month to launch officially the new TEEB (The Economics of Ecosystems and Biodiversity) for Business Coalition Headquarters, which aims to achieve a shift in corporate behaviour to preserve and enhance, rather than deplete, the earth’s natural capital.
The Coalition brings together global stakeholders to study and standardize methods for natural capital accounting to enable its valuation and reporting in business. This is the business application of the G8+5 and UNEP-supported TEEB programme, led by Pavan Sukhdev, which provides a compelling economic case for the conservation of natural capital and is a cornerstone of the Green Economy.
“The work of TEEB makes another sound case for an inclusive Green Economy in the context of sustainable development and poverty eradication, and highlights an urgent need to integrate the valuation of natural capital into business practices in the vital private sector – the Business Coalition aims to do exactly that,” said Achim Steiner, UN Under-Secretary General and Executive Director of the UN Environment Programme.
The Coalition focuses on global stakeholder engagement, focused research and development of methods for natural capital accounting. The Coalition’s founding members have pioneered much of the science and business case for natural capital valuation and accounting, providing a credible platform to take the business application of this forward.
These existing activities will be built on to ensure the necessary stakeholders from business, government, support organizations, academia and civil society inform effective and pragmatic methods. This will maximize uptake and enable the transformative change that valuing natural capital in business can bring.
“The invisibility of corporate externalities is a root cause of many errors of judgement across economics, ecology and governance,” said Pavan Sukhdev, Study Leader of TEEB, & UNEP Goodwill Ambassador. “Solving this complex problem is a crucial challenge for sustainability, and it will need global collaboration and research expertise of significant scale. I am therefore delighted that so many leading global institutions, who are represented in this Coalition, are combining forces to address this challenge.”
For businesses to be viable in the long term, the ecosystems and resources upon which they depend must be maintained. Businesses rely on ecosystems that provide critical provisioning services (e.g. water and food) and regulatory services (e.g. climate regulation, water purification, flood management and waste treatment). However, 60 per cent of the world’s ecosystem services have been degraded over the past 50 years.
Resource constraints represent a significant business risk. This is not only from the potential inability to source the necessary inputs for products but also from the threat of political and/or regulatory intervention into operations.
Currently natural capital is invisible in many business decisions – most ecosystem services are environmental externalities and not accounted for in market economics. However, government and business alike are recognizing the importance of valuing natural capital.
Jochen Zeitz, Chairman of PUMA SE who serves on the Advisory Group for the TEEB for Business Coalition, said: “Continuing to disregard externalities is no longer a viable option with regard to the long-term prospects of our businesses, let alone our planet. Having been the first company to place a monetary value on the environmental impacts along our entire value chain with our E P&L, valuing and accounting for natural capital will help businesses minimize their environmental impacts while simultaneously preparing for the future economic impact of ecosystem services on a business.”
Dr. Dorothy Maxwell has been appointed as Director for TEEB for Business Coalition. Dr. Maxwell joins the Coalition with over 20 years professional experience working in the sustainability arena in business, government and academia in the EU, USA and Asia Pacific.
The ceremony, held at Burkhill Hall, Botanic Gardens, Singapore, took place as part of the Responsible Business Forum on Sustainable Development, which presented practical ways to accelerate solutions for a more sustainable world while increasing business and industry growth.