Remarks by Achim Steiner to Ethos Conference 2012 Thu, Jun 14, 2012

Sustainable Development-from 1972 to 2012: the Bumpy Road from Stockholm to Rio+20

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Sao Paulo, 13 June 2012 - Gilberto Carvalho, Secretariat-General of the Presidency of the Federative Republic of Brazil,

Mr. Carlos Lopes and Mr. Ignacy Sachs.,

Members of the private sector and civil society, delegates, friends,

Thank for inviting me to address the Ethos Conference 2012 on the eve of Rio+20.

You have asked me to address the milestones of the past four decades that have in a sense defined a journey that has to date has been marked by a great deal of effort and aspiration.

But cannot be said to have brought now over 190 nations to that safe haven known as sustainable development.

Indeed as we meet here in 2012 it is by far the challenges-somewhat theoretical in 1972, far more clearly glimpsed in 1992-that seem in many ways far more tangible and real than the implemented answers, options and opportunities.

I refer to challenges such as mounting greenhouse gas emissions and climate change; unsustainable consumption and over-exploitation of natural resources from fish stocks to freshwaters; persistent poverty and yawning inequality between nations and within them.

Yet despite these sobering facts-we collectively know that we live at a time in history with all the knowledge, science, policies, financing and experience that could-with leadership and courage-take seven billion people from a grim future to the Future We Want.

Indeed a transition to a low carbon, resource efficient, job-generating inclusive Green Economy is happening already in Brazil and Bangladesh, in Germany and Ghana, in Mexico and in Morocco and in the Republic of Korea and Rwanda-indeed almost everywhere one looks the elements are already emerging.

On Monday UNEP in collaboration with Bloomberg New Energy Finance and Ren21 launched two reports on investments and trends in clean energy.

It showed that despite the on-going economic and financial crisis in many countries, that new investment in renewables hit close to $257 billion in 2011-another record-breaking year.

In Brazil the latest round of auctions and the bids placed by companies indicate that this country-already remarkable in respect to sustainable ethanol production-will soon be generating the cheapest electricity from wind power in the world.

The challenge and the opportunity for Rio+20 is to accelerate and to scale-up these pathways alongside ones ranging from sustainable transport to investing and reinvesting in sustainable management of ecosystems-not as an alternative to sustainable development but as a way of finally realizing it.

Honourable Delegates,

Stockholm to Rio+20

We can perhaps trace the beginnings of the sustainable development journey to the UN Conference on the Human Environment which took place in Stockholm, Sweden in 1972.

The conference also agreed to establish an environment programme of the UN.

UNEP was officially brought into existence at the UN General Assembly later that year-so it is not just Brazil with Rio+20 that has an anniversary this year!!

Over the past 40 years the world has rolled out the machinery to address a range of issues in a sense as they emerged or perhaps more circumspectly put, in a piecemeal fashion.

From the Convention on the International Trade in Endangered Species in the mid-1970s, through the Montreal Protocol on Substances that Deplete the Ozone Layer in the late 1980s; the climate change, biodiversity and desertification conventions of Rio 1992 into the 2000s with the Stockholm Convention on Persistent Organic Pollutants.

Meanwhile the level of scientific analysis has also grown exponentially from the establishment in the late 1980s by UNEP and the World Meteorological Organization of the Intergovernmental Panel on Climate Change (IPCC) to more recently the IPBES-a similar body now for ecosystems and biodiversity.

And the treaties and 'protocols to treaties' go on-negotiations on a mercury convention are for example on-going and will recommence in Uruguay just days after Rio+20 closes.

So the last 40 years have been very busy and overall the world has some 500 multilateral agreements.

So the world is saved?

Institutional Framework-Perhaps More Interesting Than Some May Think!!

Sadly not-while governments spend an inordinate length of time negotiating these agreements, their implementation is often woeful and in far too many cases.

Last week in Rio de Janeiro we launched the UNEP Global Environment Outlook-5-a state of the planet report and part of that science stream which also provided a kind of score card of 90 key treaties and their success.

It showed that "significant progress" had only been made on four of the 90 most important objectives.

These were phasing out substances that deplete the ozone layer, removing lead from fuel, increasing access to water supplies and boosting marine pollution research.

Some progress had been made on 40 other key goals including efforts to reduce deforestation and expand national parks.

But "little or no" improvement was detected for 24 of the 90 key objectives to tackle problems such as damaged and degraded fish stocks, climate change and drought - while further deterioration had been recorded for eight of these goals, including trying improving the state of the world's coral reefs.

There are many reasons why.

Environmental agreements are what you might call 'soft' law rather than the harder laws one sees in trade agreements for example.

Meanwhile environment ministers who often have negotiated them can often find deep seated opposition 'back' home among often more powerful colleagues in finance or trade ministries.

Global environmental issues are often medium to long term challenges that fit poorly with the short termism of many of our political systems and corporate or shareholder demands.

The Green Economy in the context of sustainable development and poverty eradication is perhaps the more familiar and widely debated overarching theme for Rio+20.

But when you look at these kinds of figures in respect to treaty implementation, then perhaps the second over-arching theme of Rio+20-an institutional framework for sustainable development-becomes more interesting and urgent.

I see from this conference's excellent 'Commitments to and Demands for the Future We Want' that this governance question is, in respect to this document, focused around exhorting Heads of State at Rio+20 to establish a Sustainable Development Council.

This is certainly an option-but there are equally well over 100 Heads of State and governments who have signaled their determination to strengthen UNEP perhaps as high as a World Environment Organization.

I mention this not as the head of an institution craving more power!!

But as a development specialist that has long come to recognize that environment is an ally and an indispensible support and catalyst towards a more socially inclusive and prosperous, balanced future.

Equally in empowering a strengthening of UNEP at Rio+20, the world could go some way towards empowering environment ministers and providing them with more authority in respect to the implementation of those 500 multilateral agreements.

Honourable delegates,

Has 40 Years Been a Waste of Time?

clearly the poor showing of treaty implementation might be construed as 40 years of wasted time.

I would counter that impression.

At UNEP's Governing Council last February, our theme or slogan was UNEP and the Green Economy-Four Decades in Development.

Because I would suggest that the 40 years of policy-making, pilot projects and striving by countries and communities has been the incubation period for what we can see now as pathways to an inclusive Green Economy.

And that the old myth that somehow environment was peripheral to development could here in Rio 2012 be finally been challenged, overturned and consigned to the history books.

Certainly there are many governments that now share that view.

And increasing numbers of companies see the bottom line for the 21st century predicated on how they will manage resource scarcities and shocks such climate change that have the potential to destabilize entire supply chains.

This growing interest among companies in environmental sustainability as part of sustainable development has been one of the healthier developments since the Rio Earth Summit.

UNEP, one of the UN agencies that reached out first to the private sector, and its Finance Initiative has grown to over 200 financial institutions as partners.

The Principles for Responsible Investments, launched in 2005 by UNEP and the UN Global Compact, now has some 1,000 partners whose assets under management are around $30 trillion.

UNEP will announce over the coming days a potentially transformational new initiative with the insurance industry modeled on some of these lines.

The UNEP-hosted The Economic of Ecosystems and Biodiversity deliberately engaged governments but also local authorities and the private sector-indeed it was the private sector, and in developing economies, that in many ways emerged as the most concerned over in particular the loss of biodiversity and ecosystem services.

Rio+20 is the opportunity for those forward-looking companies to in a sense empower world leaders and to provide along with civil society and local authorities with the courage to act.

Engaging on the Proposals and Possible Rio+20 Outcomes

So what is on the table in a few days' time that might unlock an inclusive Green Economy for all nations-big and small, developed, rapidly developing and least developed.

In support of these two overarching themes, several so called 'big ticket' items are being put forward.

Some aimed at correcting some of the economic anomalies, if not absurdities that this century has inherited from the past.

Others quite bold and quite fresh in terms of forward-looking directions around which nations-rich and poor, developing and developed -can cooperate again within the context of their national circumstances.

Beyond GDP

Firstly let me mention the considerable discourse and analysis surrounding a new international indicator of progress-again I believe Brazil has a lot to say and a lot to gain from this issue.

We live in a world fascinated by GDP-if it goes up we are happy and if it goes down we all feel depressed.

Yet GDP, invented in the late 1930s, is a pretty poor indicator of human well-being, inclusive progress and sustainability as it excludes the ups and downs of natural resources, pollution and a range of social issues.

In the run up to Rio+20 and during the Summit various new indicators that have been incubating for many years will be on the table which need fostering and frank analysis through both a practical, political and legislative lens.

  • The work on Inclusive Wealth, which is based on the World Bank's Adjusted Net Saving indicator, is developing a more inclusive indicator of national wealth, covering not only produced capital, human capital, and natural capital, but also critical ecosystems -and through the UN a new Systems of Environmental and Economic Accounts has been proposed for use by member states.

Efforts are being made by a growing number of countries to apply such notions to real life economies.

Partha DasGupta, the Indian born economist based at Cambridge University in the UK, has looked at India.

In one study, Dasgupta has shown that against India's per capita GDP growth of 2.96 per cent annually since the 1970s is more like 0.31 per cent if environmental costs including deforestation are taken into account.

A report by the Chinese government and international experts on economic costs and human health impacts of environmental pollution estimates that the combined health and non-health cost of outdoor air and water pollution for China's economy comes to around $US100 billion a year (or about 5.8% of the country's GDP)

  • air pollution, especially in large cities, is leading to higher incidences of lung diseases, including cancer, respiratory system problems and therefore higher levels of work and school absenteeism
  • water pollution is also causing growing levels of cancer and diarrhea particularly in children under-5
  • water pollution is further exacerbating China's severe water scarcity problems, bringing the overall cost of water scarcity to about 1% of GDP.

A report by Deloitte Tousche Tohmatsu and the World Economic Forum presents the concept of a Genuine Progress Indicator or GPI which factors environmental and social factors into its mix.

It cites the United States concluding that while GDP has shown steady growth since the 1970s, measured by the GPI the US has actually stagnated over the past 40 years.

UNEP and the UN University's International Human Development Programme will at Rio+20 publish a report on an Inclusive Wealth Index (IWI) looking at several countries including Brazil.

As measured by GDP per capita, the wealth of Brazil rose 34 percent between 1990 and 2008.

In contrast Brazil's IWI is estimated to have risen just 3 percent in part as a result of losses of natural capital.

I mention these country examples not because they are unique or uniquely startling, but this is where some of the pioneering analysis has already been undertaken towards a new indicator that many believe could assist in accelerating a sustainable future.

Indeed if such indicators had been around for several hundred years, many developed countries would running severe deficits on any of these new yardsticks of progress or inclusive wealth.

There are other pathways towards a new indicator.

  • The EU effort to go "Beyond GDP" - launched in November 2007 aiming to come up with a broader set of macro-level indexes other than GDP and provide information on how economic growth affects its own foundation (stock of all assets)
  • The accounting of Environmental Goods and Services Sector (EGSS) in select countries. OECD and Eurostat have pioneered the development of a statistical framework for measuring the EGSS.
  • OECD's initiative on measuring progress of societies.

The work of the UNEP-hosted International Resource Panel is also providing analysis on how to decouple economic growth from resource use amid concern that resource use could triple by 2050 without that decoupling:

  • In short the aim is to delink economic growth and well being from physical growth as another supportive element of a transition to a Green Economy
  • A transition to a Green Economy is characterized by a significant decoupling from environmental impacts with the global ecological footprint to biocapacity ratio projected to decline from a current level of 1.5 to less than 1.2 by 2050 - much closer to a sustainable threshold value of 1 - as opposed to rising beyond a level of 2 under 'business as usual'.

There are many who anticipate that Rio+20 could launch a process towards an agreement on a universal indicator that might be available for countries to harness in perhaps five years' time, forged in part of in whole from these various pilot ones.

Global Sustainability Reporting-Building on Sao Paulo Stock Exchange

Another possible outcome that is emerging in the final weeks is a cooperative agreement among governments for global sustainability reporting.

Given some of the pioneering work in this field not least through the Sao Paulo stock exchange, this could be another area of interest for Brazil.

Since the 1992 Rio Earth Summit, increasing numbers of companies have been factoring environmental, social and governance (ESG) issues into their operations and business models.

Around a quarter of corporations surveyed by Bloomberg are now encapsulating and disclosing some of these elements in their annual reports side by side with cash flows, debts and liabilities.

Meanwhile several stock exchanges ranging from Istanbul and Johannesburg to Sao Paulo and Singapore are now requiring a serious commitment to ESG issues from their listed firms.

Dedicated sustainability indices have also emerged among some international rating agencies and exchanges including the Dow Jones Sustainability Index, the FTS4Good and the NASDAQ Global Sustainability Index.

This progress is welcome: it allows pension funds, shareholders and other investors to pick firms where sustainability is central-not least because there is good evidence that such corporations are better run, manage natural resources more efficiently, have reduced pollution footprints, are less prone to shocks in a globalized world and less vulnerable to reputational risk.

It is also assisting governments across a wide range of challenges from meeting greenhouse gas targets to tracking health and safety improvements for workers across sectors and geographic regions.

However it is not enough: Indeed the Corporate Sustainability Reporting Coalition-an alliance of pension funds and investors with $2 trillion-worth of assets under management along with, UN agencies and NGOs-concludes that existing voluntary arrangements have hit their limits.

The time is ripe for a global policy framework on corporate sustainability reporting and is essential in order to deliver the basic information, transparency and comparability needed to move forward and assist in fast tracking a transition to a global Green Economy.

Why? Firstly several countries including China, Denmark, Ecuador, India, Norway, Singapore and the United Kingdom have recently created laws, procedures, guidelines and standards in line with the proposed convention.

These are to be welcomed. But what business needs most is not many different standards, but a common global agreement on reporting. That will be more effective and lower cost.

Secondly, many of the nuts and bolts underpinning a potential global framework already exist, via such voluntary efforts as the UNEP-founded Global Reporting Initiative, the Global Compact, the Carbon Disclosure Project and the International Integrated Reporting Council which advocates integrated reporting-this being a holistic representation of the "state of play" in a company and in respect to sustainability reporting a necessary stepping stone in achieving such representation.

Thirdly, a survey of stock exchange respondents has found that 80% of those responding wanted a global approach to sustainability reporting; only 30% objected to this being mandated.

There are many other issues on the table.

These range from sustainable procurement of goods and services by governments and local authorities-an area where UNEP and the authorities in Brazil have been collaborating given its potential to push whole economies into the sustainability space and an issue that President Rousseff embraced by signing in a new law in the field.

There is also the long standing issue of the up to $600 billion of fossil fuel subsides that distort energy choices, perpetuate inefficiencies in energy generation and increase greenhouse gas emissions and-and this is the key fact-rarely if ever assist the poor.

Finally, we also have on the table proposals for Sustainable Development Goals.

Two brief remarks on these.

If they become a sort of Millennium Development Goals Mark II or 2.0 then an opportunity will have been missed-the developed countries with their unsustainable consumption and production profiles need to be part of the overall, global target-setting too.

In addition, the global public needs to be engaged and to be aware that leaders can envision challenges and opportunities in new and creative ways based on the latest science.

For example some governments are suggesting a target for cutting food waste-an issue that intuitively unites people in the North and South in ways that cover the entire supply chain from post-harvest losses in developing countries to those in the retail sector and at the level of the household in developed ones.

Honourable delegates,

some have said that Rio+20 comes at an inopportune moment-in many developed countries the economic crisis is the preoccupation and many rapidly developing economies are perhaps not yet ready to lead from the front.

But when will an opportune time be?

The multiple crises in the world today and the ones looming ever closer have their genesis in what have become the stale, short term, economic models inherited from a previous century.

Rio+20 could go down as anti-dote to the frustration and sense of powerlessness many people feel if-and this is the big if-all sectors of society can unite around a sense of vision.

And signal in these last few days by thought, word and deed to their political leaders that the Future they Want is not the timid, play safe, default to the policies and practices of the past.

But a Future where the economy invests in securing and supporting the real wealth of the planet that rests upon human creativity and ingenuity alongside the natural and nature-based resources of the world.

And that at Rio+20 governments devise and define the policies and programs that ensure this wealth is equitably shared, sustainably managed and fostered in ways that echo to a fundamental right to development for everyone-call it the inclusive Green Economy or the pink, purple or polka dot economy.

Many of you in this room know what it looks like and how it can be scaled-up and accelerated-so let's together make it happen by Rio+20's close and put the prosperity and progress of seven billion people, rising to nine billion by 2050 at the heart and the centre of international cooperation rather than on the periphery.

 
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