Pavan Sukhdev of the UN says in a new report that the benefits of halting environmental devastation outweigh the costs – not only for the planet, but also for investors.
First published The Guardian 12 July, 2010.
Modern businesses are “soulless corporations” that are in danger of becoming a “cancer” on society, a leading UN environmental official warns today.
Companies usually take a short-term view of the importance of the environment, said Pavan Sukhdev, head of the UN’s investigation into how to stop the destruction of the natural world. This short-term thinking is seen in their lobbying against new policies that could slow environmental devastation, he said.
Sukhdev, now on sabbatical from Deutsche Bank, spoke as he prepares to publish tomorrow one of the most eagerly awaited parts of his report – The Economics of Ecosystems and Biodiversity (TEEB) for Business.
The report will be launched at the first Global Business of Biodiversity symposium in London, where speakers will include environment secretary Caroline Spelman. She will highlight examples of businesses causing damage which imposes a huge cost on themselves and society – including an estimate that global destruction of forests costs the world’s economies $2tn-$5tn (£1.3tn-£3.3tn) a year.
She will also speak of the BP oil spill in the Gulf of Mexico. “BP’s shares have halved since the spill began in mid-April – there will be no dividends this year,” she is due to say. “While the real impact on the local economy, wildlife and marine health may not be fully known for years … What’s bad for biodiversity is bad for business.”
Sukhdev told the Guardian that private businesses were too important as employers and payers of taxes to embark on a revolution, calling instead for society to take a greater responsibility for regulating the behaviour of companies. When the final report is published, at a biodiversity conference in October in Japan, Sukhdev will recommend major changes in the way companies are regulated.
“We have created a soulless corporation that does not have any innate reason to be ethical about anything,” he said. “The purpose of a corporation is its own self-interest. That is law. So it’s up to society and its leaders and thinkers to design the checks and balances that are needed to ensure that the corporation does not simply become cancerous, and that’s something that sometimes we do and sometimes we really don’t.”
TEEB was set up after the success of the groundbreaking 2006 report by Sir Nicholas Stern for the UK government. The Stern report argued that the cost of tackling climate change would be 1-2% of the global economy, while the cost of doing nothing would be up to 20 times that.
In the first two parts of the five-part final report, already published, the UN team argue powerfully that the failure of governments and businesses to put a “price” on ecosystem services provided by nature – from flood protection and pollination of crops, to carbon take-up by forests and the sheer wonder of nature – has led to widespread destruction of whole ecosystems and of the variety of all life on Earth.
Research by London-based consultancy Trucost for the study team estimated the world’s 3,000 biggest companies caused US$2.2tn (£1.46tn) of environmental damage in 2008.
Sukhdev’s final report is expected to argue that the benefits of halting and reversing the devastation outweigh the costs even more powerfully than the case argued by Stern for tackling climate change.
A spokesman for TEEB said that the latest report would argue that many impacts of business were not costed financially and so led to damage to the environments they operate or pollute into, “which in turn may affect human well-being adversely”.
“This report is for a wide array of enterprises, including those with direct impacts on ecosystems and biodiversity, such as mining, oil and gas and infrastructure; for those businesses that depend on healthy ecosystems and biodiversity for production, such as agriculture and fisheries; for industry sectors that finance and under-gird economic activity and growth, like banks and asset managers, as well as insurance and business services; and for businesses that are selling ecosystem services or biodiversity-related products such as eco-tourism, eco-agriculture and bio-carbon,” added the statement.
Previously, Sukhdev has called for governments and businesses to be forced to report their environmental and social impacts alongside – not separately from – their financial accounts, and stricter limits on extraction and pollution.