Your SlideShare is downloading. ×
Franz Knecht
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×

Introducing the official SlideShare app

Stunning, full-screen experience for iPhone and Android

Text the download link to your phone

Standard text messaging rates apply

Franz Knecht

100
views

Published on

TBLI CONFERENCE™ EUROPE 2012 - Zurich - Switzerland

TBLI CONFERENCE™ EUROPE 2012 - Zurich - Switzerland

Published in: Economy & Finance

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
100
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
1
Comments
0
Likes
0
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. BES – Biodiversity and Ecosystems Services: Challenge for SRI Rating and Corporate Performance Reporting Selected Results of a Study for the Swiss Federal Office for the Environment (FOEN) * TBLI, Zurich, 08.11.2012 * Franz Knecht, Managing Partner, CONNEXIS Strategy Consultants and ESG Advisory, Basel (CH) Franz.knecht@connexis.ch - Tf. +41 79 4159302
  • 2. Biodiversity in a Nutshell:1. Biodiversity consists of three elements: Diversity of species Genetic diversity Diversity of (supporting) eco systems2. Preservation of Biodiversity in two dimensions: Protection of biodiversity Sustainable use of biodiversity and eco systems3. Action on three levels: Local National Internationallokal, national und international BES - Challenge for SRI Rating andTBLI WS 12 - 08/11/2012 Corporate Performance Reporting - 2 franz.knecht@connexis.ch
  • 3. Loss of Biodiversity & Degradation of Eco Systems BES - Challenge for SRI Rating andTBLI WS 12 - 08/11/2012 Corporate Performance Reporting - 3 franz.knecht@connexis.ch
  • 4. Biodiversity – Dependency and Impact on Industries BES - Challenge for SRI Rating andTBLI WS 12 - 08/11/2012 Corporate Performance Reporting - 4 franz.knecht@connexis.ch
  • 5. Upcoming Regulation on BES is aheadThe Convention on Biological Diversity (CBD) - entered into force on 29 December 1993 - with three main objectives: Conservation of biological diversity Sustainable use of the components of biological diversity (e.g. ecosystem services) Fair and equitable sharing of the benefits arising out of the utilization of genetic resources BES - Challenge for SRI Rating andTBLI WS 12 - 08/11/2012 Corporate Performance Reporting - 5 franz.knecht@connexis.ch
  • 6. CBD’s 20 Aichi Targets Achieving BES Some of high Economic Relevance Target 3: By 2020, at the latest, incentives, including subsidies, harmful to biodiversity are eliminated, phased out or reformed in order to minimize or avoid negative impacts ... Target 7: By 2020 areas under agriculture, aquaculture and forestry are managed sustainably, ensuring conservation of biodiversity. Target 11: By 2020, at least 17 per cent of terrestrial and inland water, and 10 per cent of coastal and marine areas, especially areas of particular importance for biodiversity and ecosystem services, are conserved.... Target 16:By 2015, the Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization is in force and operational, consistent with national legislation. BES - Challenge for SRI Rating andTBLI WS 12 - 08/11/2012 Corporate Performance Reporting - 6 franz.knecht@connexis.ch
  • 7. Objectives of the Study for FOEN: Creating a Base Line for Discussion by1. Understanding SRI rating agencies’ application and practice of BES aspects in their corporate rating approaches2. Reviewing BES relevant information publicly disclosed by Switzerland based companies (with a global biodiversity footprint)3. Collecting the concerns of companies about BES- indicators: how used today and in (possibly) applied in near future, Opinions about BES foot-printing, and what matters most to companies/sectors. BES - Challenge for SRI Rating andTBLI WS 12 - 08/11/2012 Corporate Performance Reporting - 7 franz.knecht@connexis.ch
  • 8. Study Part 1: BES Practice of SRI Rating firms: (active in Switzerland)Findings: BES SRI evaluation schemes use different approaches, often combining two or more of them, e.g.: Application is focussed on high and medium impact sectors: i.e. the usual suspects extraction, agro, food, tourism Assessing the level of inclusion in corporate guidelines and policies, and the supply chain Investigating information about general perception but also IPR or compensation aspects (i.e. anticipating PES) Identifying the grade of transparency and level of compliance with international agreements and conventions (so called norms based rating) Evaluating how BES is actively covered in plain risk and/or ESG management systems, action plans and measures BES - Challenge for SRI Rating andTBLI WS 12 - 08/11/2012 Corporate Performance Reporting - 8 franz.knecht@connexis.ch
  • 9. Diversity of BES Indicator Systems used in different Rating Approaches1. The BES indicator systems identified show SRI sectors’ attempts to identify so called ‘materiality’ by looking at:  accounting standards,  market prices,  regulatory liabilities and their consequences  strong signs of demand or  expectation by influential stakeholders2. Assessment of externalised effects3. Assessment of positive or negative social effects4. Assessment of impact on tangible economics5. Assessment of sector specific risk indicators6. Assessment of BES topics with an effect for the whole sector BES - Challenge for SRI Rating andTBLI WS 12 - 08/11/2012 Corporate Performance Reporting - 9 franz.knecht@connexis.ch
  • 10. BES Trends Addressed by SRIExample: MSCI 2012 ESG Trends to Watch: Accounting for Natural Capital (Research News, Linda-Eling Lee, Global Head of MSCI ESG IVA Research) The rapid degradation of ecosystems and depletion of natural resources will weigh on the long-term sustainability of major economies around the world. Assessing countries ability to protect and harness their endowed resources will be a crucial step to integrating country- level risks into investment decisions. Currently, in over two thirds of the 156 countries in our data-set, the consumption/production levels have already exceeded their bio-capacity. We anticipate that these countries attractiveness as investment destinations will increasingly be called into question ... BES - Challenge for SRI Rating and TBLI WS 12 - 08/11/2012 Corporate Performance Reporting - 10 franz.knecht@connexis.ch
  • 11. We know about the Facts – but what about the Range of Consequences? BES - Challenge for SRI Rating andTBLI WS 12 - 08/11/2012 Corporate Performance Reporting - 11 franz.knecht@connexis.ch
  • 12. As far as the Indexes on Nature show Consequences ask for tough action ... BES - Challenge for SRI Rating andTBLI WS 12 - 08/11/2012 Corporate Performance Reporting - 12 franz.knecht@connexis.ch
  • 13. Study Part 2: Selected Industries’ Practice -> Swiss based + Global BES-FootprintSelection of Sectors1. Agro, Food, Retail & Pharmaceutical The companies in these four sectors have one in common: they are in many ways directly and indirectly depending - not only impacting – on biodiversity and ecosystems.2. Extraction & Metals Manufacturing: The companies in these two sectors impact directly thru raw materials and supply chain on biodiversity and ecosystems, but they do not depend on them.3. Finance : Banks & Insurance The companies in the financing and insurance sector are indirectly impacting on biodiversity and ecosystems through their financial products and the investment decisions they influence or finance upon third party requests (e.g. project finance). BES - Challenge for SRI Rating andTBLI WS 12 - 08/11/2012 Corporate Performance Reporting - 13 franz.knecht@connexis.ch
  • 14. Example: Findings Food & Retail Sector1. Awareness: Overall significant BES awareness according to perceived range of impact:  Holistic focus: many biodiversity aspects are addressed  Specific focus: few biodiversity aspects are addressed  Ubiquitous focus: unspecific biodiversity aspects are addressed (water use)  BES with CSR & reputation inclusion: companies with a global value chain strategy are aware of social and reputation conflict potential2. Policies and systems as well as reporting capacity and content: from complete to very limited, and not all refer to GRI.3. Stakeholder involvement: according to the companies’ own awareness about their relevance, importance and exposure to stakeholders.4. For benchmarking and comparing purposes: system thinking needed re: -> Business model: B2B, B2C, horizontal or vertical integration, and -> BES boundary conditions and exposure: regulation, standards, NGOs. BES - Challenge for SRI Rating andTBLI WS 12 - 08/11/2012 Corporate Performance Reporting - 14 franz.knecht@connexis.ch
  • 15. Q1. What is the Actual Use of BES Indicators?Findings (all sectors)1. The answers indicated the respondents’ level of preparedness as well as exposure and/or contribution to the BES-debate.2. All sectors showed a certain common understanding about what to use as indicator and how to get the accurate information.3. As the critical factor appears the complexity of the value chain.Conclusionsa) Normalisation/standardisation process regarding the development and implementation of BES indicators has to intensify and accelerate.b) Aggregation, comparability and analysis of indicators (e.g. for a national or international stakeholder debate) can best be done if sector preferences and traditions are somehow in line and brought to a common understanding regarding cause and effect loops. BES - Challenge for SRI Rating andTBLI WS 12 - 08/11/2012 Corporate Performance Reporting - 15 franz.knecht@connexis.ch
  • 16. Q2. How to present a BES-‘Footprint’ in the future?Findings (all sectors)1. The term BES-Footprint seems of critical importance for gaining a holistic picture of an overall (corporate) BES impact.2. Some respondents found it desirious to normalize BES similar to carbon and water on corporate level.3. A BES-Footprint on a product group – compared to corporate or total value chain focus – was seen to be the most feasible.Conclusionsa) BES-Footprint as term is not generally accepted by industry.b) The acceptance of footprinting on product group and in some sectors (R) also on value chain level may be an opportunity. BES - Challenge for SRI Rating and TBLI WS 12 - 08/11/2012 Corporate Performance Reporting - 16 franz.knecht@connexis.ch
  • 17. Q3&4. What are BES topics of importance foreach company, what is of influence to a sector?Findings (all sectors)1. BES topics of importance base on the history (experience with ESG in a wider context) of a company and in a sector.2. Of equal importance to all is a need for data: more general data and more topic-related data, including how to get it.3. Regarding sector importance was named the variety of the today accepted (GRI) and some recently discussed topics (PES).Conclusionsa) There is a broad and differentiated understanding about what is important and what matters to each sector.b) Companies seem better prepared for debating corporate BES topics about the (near) future then about today’s impacts. BES - Challenge for SRI Rating andTBLI WS 12 - 08/11/2012 Corporate Performance Reporting - 17 franz.knecht@connexis.ch
  • 18. Last but not least: Two quotes from 2008 BES - Challenge for SRI Rating andTBLI WS 12 - 08/11/2012 Corporate Performance Reporting - 18 franz.knecht@connexis.ch
  • 19. Thank you for your interest! Franz Knecht, Lic.iur. (MLaw) CONNEXIS AG, Strategy Consultants CSR&ESG Advisory St. Jakobs Strasse 108, CH-4052 Basel Tel: +41 79 4159302 franz.knecht@connexis.ch - www.connexis.chReferences Swiss citizen, born 1953, Master in Law of the University of Basel, additional education in legal practice and proceedings, economics, banking, marketing andupon request: communication, environmental management systems (lead auditor ISO 14001), and•Arcadis sustainability reporting. Professional experience: 2 years as lawyer, 4 years as VP for•CAT Alliance business associations, 12 years several management positions as VP in banking (SBC/UBS), 13 years founding and managing partner of CONNEXIS AG, sustainability•COWI consulting for finance, manufacturing, service and public sector.•URS CONNEXIS’ work embraces a wide and growing area of topics like CSR/ESG risks and•Finance Sector economic/financial effects, SRI rating solutions as well as ESG Due Diligence for capital transactions, integrated sustainability reporting, green IPOs and responsible•Swiss supply chain management solutions. Clients are mainly from the private sector andGovernment are based in Europe, but the outreach of the projects is often global. The sectors•UNEP FI covered are finance, manufacturing, service and governmental, EU and international institutions. BES - Challenge for SRI Rating andTBLI WS 12 - 08/11/2012 Corporate Performance Reporting - 19 franz.knecht@connexis.ch