Blake Lapthorn Green Breakfast with guest speaker Andrew Mitchell, founder and director of Global Canopy Programme
Finance & ForestsA 21st Century Intelligence Test? Andrew W. Mitchell Founder and Director Founder and Director Global Canopy Programme www.globalcanopy.org www.globalcanopy.orgGreen BreakfastBlake Lapthorn - 12 OCT 2011Blake Lapthorn - 12 OCT 2011
ATMOSPHERE EVOLUTIONNew Value for Forests - Where Life Meets the Atmosphere?
The Amazon as an Eco-Utility Regional to Global Ecosystem Services• 3 trillion tonnes of water stored• 8 trillion tonnes of water vapour evaporated each year?• $1 trillion of industry share this eco- eco- dependency dependency• Deforestation may mean declining• Deforestation may mean declining service provision service provision• Rising temperatures may compound• Rising temperatures may compound the effects the effects The Amazon’s Rainfall Service? After J. Marengo, INPE
Roadmap to a ‘Green Economy’? ‘Green Economy’? Food Security Amazon Eco-Utility draft framework Energy Security Stewardship Climate Security Community Forest Ecosystem Services (local) Ecosystem Services Benefit sharing (regional-global) Economy
Forests as Natural Capital? Forest Owning Nations as as Eco-Services? Providers of global Eco-Services? Eg: Eg: Natural CCS Worth $ billions/yr - and FREE
“20% of Problem Now < 40% of the Solution by 2030” SOURCE: Pathways to a Low Carbon Economy, McKinsey report, Feb 2009
1. Valuing Forest Carbon? Cul-de-sac? Compliance or Cul-de-sac?
“Little Book”“Little Book” Guides QuickTime™ and a TIFF (LZW) decompressor are needed to see this picture.
The FFD Disclosure Request 4 main sections – Deforestation Risk Assessment Management of FRC Issues Coverage of FRCs Reporting, Governance, Risks and Opportunities. Participation/recognition Participation/recognition of all activity - Mature (timber) or emergent (beef / leather) Aim to engage first, then drive improvement
Milestones reached in two Years? Companies up 31% - 285 vs 217 in 2009 - 78 vs 35 in 2009 Engagement more than doubled - 78 vs 35 in 2009 27% vs 16% Response rate increased to 27% vs 16% All 2009 respondents retained (excepting Cadbury, now under Kraft ownership) Global launch in Sao Paulo with Santander Expanded from EU to US 2011 > 65 Endorsers AUM = US$ 6 trillion +
3. Raising Finance -An Emergency Plan HRH Prince of Wales hosted historic meeting of world leaders in London world leaders in London alongside G20 2009 alongside G20 2009 Paris-Oslo > COP 2010 Paris-Oslo > COP 2010 REDD+ Partnership REDD+ Partnership 2011 Offer = USD $4.2 Bn 2011 Offer = USD $4.2 Bn Need = US$ 17 - 33 Bn! Bn! Meeting at St James’s Palace, 1 April’09
How to Bridgethe Financing Gap? 17 Mechanisms to raise funds from $36 Bn /yr to $141 Bn/ year in 2020 A guide to Proactive Investment in Natural Capital (PINC) GLOBAL CANOPY PROGRAMME
Bonds = Public / Private Finance?• Global Bond Market = USD$ 100 T• Regulatory and Country Risk• Lack of Market Demand• Multiple Revenue Streams• Combine Carbon/Forestry/Food• Safeguards
The Challenge…GDP + NCDInclude Natural “Are we creatingCapital in the wealth that’s worth21st Century having?”Economy Clinton Global Initiative, New York, Clinton Global Initiative, New York, October 2007
The “Natural Capital Declaration” Major global FIs Launch in Washington UNEP GTR Governments - World Bank ‘WAVES’’ ‘WAVES Corporations - AVIVA Annual Accounts 2015 - International Integrated Reporting 2020 - Accounting Standard for Natural Capital
Calls in the Declaration1. Work towards the integration of Natural Capital criteria into financialproducts and services – including loans, investment and insurance products– thereby demonstrating a leadership role in the finance sector. Specificallywe aim to build on: a) The UN Principles for Responsible Investment and apply a holistic approach in evaluating bonds and equities by integrating Natural Capital criteria through ESG risk analysis – with a focus on both the risk and opportunity management of investee companies; b) The Equator Principles to systematically consider and value and where possible price Natural Capital in project, corporate, and trade finance; c) The UN Principles for Sustainable Insurance and work with the insurance sector to develop methods for systematically considering and valuing Natural Capital in risk management underwriting, product development and claims management;2. Collaborate with the International Integrated Reporting Committeeand other stakeholders to bolster a global consensus around integratedreporting which includes Natural Capital as part of wider sustainabilitycriteria [by 2015] and work towards developing methodologies that enablethe use of Natural Capital to be accounted in the provision of all goods andservices [by 2020].
Calls on Governmentsa) Requiring publicly-listed companies to disclose the nature of their dependence and impact on Natural Capital through quantitative reporting using audited performance indicators;b) Using fiscal measures to discourage business from eroding Natural Capital unabated, while at the same time offering incentives to companies that integrate, value and account for Natural Capital in their business model;c) Endorsing and implementing international agreements, including but not limited to, those agreed through the Convention on Biological Diversity.d) By setting an example through requiring public spending and procurement to report and eventually account for its use of Natural Capital.