Sukhdev presents in his new book "Corporation 2020" a number of strategic challenges for sustainable business and recognizes the need for a fundamental transformation of the economy.

1. www.corp2020.com
@corp2020
Stockholm, 28th January 2013
Can Today’s Corporation Deliver
Tomorrow’s Economy?
Pavan Sukhdev
Founder & Author, Corporation 2020
Study Leader, TEEB, &
UNEP Goodwill Ambassador

2. www.corp2020.com
@corp2020
…2011
1989…
“A Green Economy is defined as one
that results in improved human
well-being and social equity, whilst
significantly reducing environmental
risks and ecological scarcities.”
Source: Towards a Green Economy, UNEP, 2011

3. www.corp2020.com
@corp2020
Source : T-21 Model, Green Economy Report,
2% of GDP invested in Greening vs 2% more in BAU

4. www.corp2020.com
@corp2020
Is “Green Economy” possible without “greening” the
Private Sector? (eg: USA)
U.S. Gross Value Added, By Sector
7.1%
5.5% Private Business
12.5% Households
74.9% Nonprofit institutions serving
households
Government
Total = GDP (US$14,526.5 billion)
U.S. Nonfarm Employees
16.7%
Private
83.3%
Government

5. www.corp2020.com
@corp2020
“Green Economy” is the right
economic vehicle to achieve
Sustainable Development
www.unep.org/greeneconomy
“Corporation 2020” is the right
economic agent to achieve a
Green Economy
www.corp2020.com
@corp2020

6. www.corp2020.com
@corp2020
“Corporation 1920”
• Four Defining Behaviours
– Pursuit of Size
– Active Lobbying
– Unethical Advertising
– Unlimited Leverage
….

7. www.corp2020.com
@corp2020
Pursuit of Size…

8. www.corp2020.com
@corp2020
Pursuit of Size…

9. www.corp2020.com
@corp2020
…Leading to explosive growth in trade

10. www.corp2020.com
@corp2020
“Corporation 1920”
• Four Defining Behaviours
– Pursuit of Size
– Active Lobbying
– Unethical Advertising
– Unlimited Leverage
Resulting in Negative Externalities…..

11. www.corp2020.com
@corp2020
Why do we need change?
• Negative externalities of top 3,000 companies
estimated at US$2.15 trillion per annum
Source: Trucost for UNPRI, 2010.

12. www.corp2020.com
@corp2020
Why do we need change?
• We are approaching or have exceeded several
“planetary boundaries”

13. www.corp2020.com
@corp2020
What will drive change?
Macro Issue Micro Driver Micro Solution
Culture of
Ethics &
Consumerism
Excessive Demand Accountability in
Fuelled by
Advertising
Marketing/ Advtg
Limit
Underpriced Supply Unlimited leverage Leverage/capital
adequacy/etc.
Underpriced
Resource Taxes
resources
Resource Depletion replace corporate
(Low royalties /
taxes
perverse subsidies)
Measure & Disclose
Public Capital Losses Externalized costs
Externalities

14. www.corp2020.com
@corp2020
Limiting Leverage
• Tools for limiting leverage:
– Capital adequacy ratios for “TBTF” corporations
– Consortium banking (info sharing between banks)
– Segregate lending/clearing institutions from
investment/ insurance (re-visit Glass-Steagall?)
– Limit tax-deductibility of interest beyond caps
– Constrain leverage from M&As
– Re-align performance bonus systems

15. www.corp2020.com
@corp2020
http://sharequotes.us/robson-walton-biography.html
Rob Walton
Chairman, Walmart

16. See Interview with Rob Walton on
www.corp2020.com
@corp2020
www.corp2020.com
Limiting Leverage
…to see why Wal-mart went public…

17. www.corp2020.com
@corp2020
Accountable Advertising
• Two principles
– Treat all consumers equally, irrespective of market
– Disclose advertising policies & practices, eg:
• Annual “Accountable Advertising Report”
• Four strategies
– Disclose life span of product on packaging and in ads
– Disclose countries of origin
– Disclose the “footprint” of the product on its packaging
(GHG emissions, freshwater, etc)
– Recommend how to dispose of product

18. www.corp2020.com
@corp2020
Jochen Zeitz
Executive Chairman, Puma

19. www.corp2020.com
@corp2020
Accountable Advertising : PUMA

20. See Interview with Jochen Zeitz on
www.corp2020.com
www.corp2020.com
@corp2020
…to see why PUMA disclosed its Externalities…

21. www.corp2020.com
@corp2020
Disclosing Externalities : PUMA
PUMA Press Release, November2011

22. www.corp2020.com
TEEB for Business
@corp2020
Coalition:
Measuring, Valuing, Disclosing Externalities
WBCSD… TEEB for
GRI… Business IIRC, SASB, &
CEF… Coalition Accountancy
CDP, WDP… & Network Regulators
Quantifying
Standardizing & Disclosing
Usage, Discovering
Valuing Impacts in
Depend-encies &
Impacts “One Report”
Impacts
Emissions /tCOe Economic Costs of Framework for
Freshwater / CuM Emissions, Integrated Reporting
Forests LUC / Ha Freshwater of All Externalities…
Pollution / … Use, Deforestatio incl Social & Human
Waste / … n, Capital..
Pollution, Waste …
(Value Chain Impacts
“Cradle to Gate”)

23. www.corp2020.com
TEEB for Business
@corp2020
Coalition:
Measuring, Valuing, Disclosing Externalities
TEEB for Business Coalition
• Incorporated as a company
limited by guarantee*
• Incorporated in Singapore Board Advisory Group
• Jochen Zeitz (Puma)
• Michael Izza (ICAEW)
(Company) • Juan Costa-Climent (E&Y)
Board • Herman Mulder (GRI)
• Peter Bakker (WBCSD)
• Fernando Rodes (Havas)
• Pavan Sukhdev (GIST Advisory)
(Chair)
Founder Member Reps - Observer Reps – organisations Ordinary Member Reps – Co-opted board members:
Members of the company – for whom legal ownership is ordinary members of the 1. Pavan Sukhdev, Study Leader
known as Founder Members - complicated but who have been Coalition elect five board TEEB
and therefore its legal instrumental partners are offered members for a three year period 2. Gerard Ee (Chair) (Member of
owners, all have permanent a permanent board seat as Parliament, Singapore)
board seats: observers: 3. Sanjeev Sanyal (Senior Economist
1. ICAEW • CBD Deutsche Bank Singapore)
2. WBCSD • UNEP
3. GRI • World Bank/IFC
4. WWF • Accounting for
5. CI Sustainability
6. IUCN • UK Government (Defra) * A company limited by guarantee is a structure that means
7. IIRC • Others? European there are no shares in the company; its members are guarantors
8. Global Initiatives Commission; Singapore rather than shareholders. There is therefore no need for share
Economic Development transfers as members join or leave the company.
Board; other donor gov’ts

24. www.corp2020.com
@corp2020
What will define a “Corporation 2020”?
• Four Characteristics
–Goal Alignment with Society
–Capital Factory
–Institute
–Community

25. www.corp2020.com
@corp2020
Corporation as “Institute” : Infosys
World-class Training for 30,000 p.a.

26. www.corp2020.com
@corp2020
Infosys Externalities Disclosure
Financial Statements Y/e March 2012
Source: Annual Report, 2011-12

27. www.corp2020.com
@corp2020
Corporation as “Community” : Natura
Greater Economic Security for Women
http://totallybeautyaddict.fr/mon-jolieapero-chez-natura-brasil/
Source: http://www.managementexchange.com/story/innovation-in-well-being

28. www.corp2020.com
@corp2020
In Summary : Reforms for “Corporation
2020” to become the DNA of Business
Accountable Advertising : Making advertising
responsible & accountable via norms & standards
Limiting Leverage : Introducing rules & limits to
govern financial leverage
Resource Taxation : Replacing Corporation Tax
(profits) with Taxes on Resource Use & Extraction
Disclosing Externalities : Measuring & disclosing
all major corporate externalities (+ve & -ve)
From : www.corp2020.com Source: Why Corporation 2020?, Island Press, 2012

29. www.corp2020.com
@corp2020
Planks Disclosing Resource Accountable Limited
Stages Externalities Taxation Advertising Leverage
Research &
Ideation
GRI, IIRC
Outreach GRI, IIRC,
& Advocacy WBCSD, ? ? ?
AFS,
B4E
Institutional
Championship ? ? ?
Implement-
ation ? ? ?
(Funding & UK (Defra)
Proj. Mngmt.) SING (EDB)

30. www.corp2020.com
@corp2020
Thank You !
www.corp2020.com
Pavan Sukhdev
Founder, Corporation 2020
& UNEP Goodwill Ambassador