If you've been watching any of the news coming out of the Rio+20 Earth Summit, you would not be blamed for thinking that it will ultimately fail. Many have decried the final Rio outcome document as weak and watered down. Several leaders have spoken out against the final version expressing dismay that it does not offer a more ambitious agenda. United Nations (UN) Secretary-General Ban Ki-moon, said in his opening remarks to the general assembly earlier this week, "Let me be frank: Our efforts have not lived up to the measure of the challenge... Nature does not negotiate with human beings."
But, I have been on the ground in Rio de Janeiro for over a week, attending side events focused on accelerating action on sustainable development among the business community, and the news is not all bad. Amidst the negative sentiments about Rio+20, there are three new areas of commitment that foster hope that we are making meaningful progress in moving the needle on the sustainability agenda.
1) Mainstreaming of Social Enterprise
At the start of this week, the UN Global Compact (UNGC) and the Rockefeller Foundation announced "A Framework for Action on Social Enterprise and Impact Investing." This new report outlines ways that companies, investors and government can help scale the social enterprise sector. Importantly, it provides a clear rationale for engaging with social enterprise, defines strategies for doing so, and identifies specific approaches to execute. In the report, the UNGC estimates that through the framework, 100,000 new start-up social enterprises could be created and $12 billion in investments could be generated. It is remarkable to see the adoption and acceptance of social enterprise and impact investing by the UNGC, a group that comprises over 6,000 business participants around the world, including giants like Cisco, DuPont, Nike, PepsiCo and Pfizer. The launch of the framework will help to mainstream the concepts of social enterprise and impact investing and bring in new understanding and new funding, and will likely increase collaborations within both movements.
2) Valuing Natural Capital
We are moving closer to a methodology for valuing natural capital through substantive commitments announced this week. The first is a collaboration between Coke, Unilever, Dow and about 20 other corporations, assembled by The Nature Conservancy and the CorporateEcoForum. The Natural Capital Initiative aims to develop a methodology to assign value to the world's forests, freshwater and marine systems. In so doing, companies will be able to decouple their growth from resource use, reduce impacts to ecosystems, and reduce risks caused by resource scarcity.
Meanwhile, 37 CEOs of financial institutions including banks, investment funds, and insurance companies launched the Natural Capital Declaration, a commitment to work towards integrating natural capital considerations into their products and services. As providers of growth capital throughout the global economy, financial institutions are a key leverage point in the economic system. Their endorsement and follow-up action to take stock of the stress put on ecosystems within their own business models and the models of those they finance could be a game-changer. Both commitments have the ability to put us on the path to implementing natural capital accounting within the next decade.
3) Injecting Sustainability Into Stock Exchanges
Another key node in the inner-workings of our economic system are stock exchanges, which manage the ebb and flow of funds into public companies. This week, through the Sustainable Stock Exchanges initiative, NASDAQ OMX, BM&FBOVESPA in Brazil, and the Johannesburg Exchange (amongst others), have committed to promoting sustainable business by encouraging listed companies on their exchanges to disclose environmental, social and governance performance. These leading exchanges, with over 4,600 listed companies in developed and emerging markets, have committed to work with investors, companies and regulators to promote long-term sustainable investment.
Perhaps even more impressive, is the announcement that the London Stock Exchange will require all of its listed businesses to report total greenhouse gas emissions for the year beginning in April 2013.
Both of these promising announcements come after a long campaign led by Aviva, the UK-based insurance company, urging all nations at Rio+20 to commit to develop an international policy framework that would lead to reporting on sustainability issues from all listed and large private companies. The oft-repeated refrain is what gets measured matters. In the examples listed under this theme, measuring may be the key to continuing to access public funds in certain regions.
Leading up to Rio+20, SustainAbility spoke to stakeholders from civil society, multi-lateral institutions and corporations who had their sights set on the Earth Summit. Most said that they did not hold out much hope for the formal outcome document being negotiated in advance of the summit. However, some encouraged us to watch for individual commitments from companies and countries that came to Rio alongside the government meeting. The collection of commitments we identified above are just a few examples of new leverage points in the system. They could prove that even without a substantive top-down international agreement, we can make bottom-up change through collaboration across companies, and between actors.