Blake Lapthorn were pleased to welcome Andrew Mitchell, founder and director of Global Canopy Programme to the first breakfast of the new Autumn 2011 series.

1. Finance & Forests
A 21st Century Intelligence Test?
Andrew W. Mitchell
Founder and Director
Founder and Director
Global Canopy Programme
www.globalcanopy.org
www.globalcanopy.org
Green Breakfast
Blake Lapthorn - 12 OCT 2011
Blake Lapthorn - 12 OCT 2011

2. science
policy finance
Research / Action

3. Where are greatest losses?

4. Drivers of deforestation

7. ATMOSPHERE EVOLUTION
New Value for Forests - Where Life Meets the Atmosphere?

8. 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

9. 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

10. 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

11. “20% of Problem Now < 40% of the Solution by 2030”
SOURCE: Pathways to a Low Carbon Economy, McKinsey report, Feb 2009

12. 1. Valuing Forest Carbon?
Cul-de-sac?
Compliance or Cul-de-sac?

13. “Little Book”
“Little Book” Guides
QuickTime™ and a
TIFF (LZW) decompressor
are needed to see this picture.

15. 2. Reducing
Drivers of
Deforestation
Emerging Risks
-Reputational
-Environmental
-Regulatory
-Earnings

16. Building Bridges
Along the
length of a
supply chain
Between
corporates,
corporates,
NGOs and
Researchers
Between
companies
and their
investors

17. Business drivers of
deforestation
Beef
Soy
Palm Oil
Timber
Oil
Mining
Mining

20. 13 Million hectares converted annually

21. 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

22. 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 +

23. 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

24. How to Bridge
the 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

25. 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

26. The Challenge…
GDP + NCD
Include Natural “Are we
creating
Capital in the wealth
that’s worth
21st Century having?”
Economy Clinton Global Initiative, New York,
Clinton Global Initiative, New York,
October 2007

27. 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

28. Thank You!
www.globalcanopy.org
www.forestdisclosure.com
www.theREDDdesk.org

29. Calls in the Declaration
1. Work towards the integration of Natural Capital criteria into financial
products and services – including loans, investment and insurance products
– thereby demonstrating a leadership role in the finance sector. Specifically
we 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 Committee
and other stakeholders to bolster a global consensus around integrated
reporting which includes Natural Capital as part of wider sustainability
criteria [by 2015] and work towards developing methodologies that enable
the use of Natural Capital to be accounted in the provision of all goods and
services [by 2020].

30. Calls on Governments
a) 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.