The II World Forum on Natural Capital took place recently in Scotland and was attended by numerous personalities involved in making progress for incorporating biodiversity and ecosystem services in business ordinary accounts with the purpose of contributing to their necessary conservation and maintenance. Among them, we had the pleasure to interview Braulio Ferreira de Souza Dias, Executive Secretary of the Convention on Biological Diversity. Spanish version.
MMA.- From your experience, is the private sector aware about the importance and need to incorporate Natural Capital Accounting (NCA) in corporate strategy?
BFSD.- It´s very critical. The business sector is the main user of natural resources and therefore the main responsible of the overuse of natural resources, their overexploitation and the degradation of the ecosystems. We need to urge businesses to understand better their links to natural resources, their dependency and the need for them to change the practices from business as usual to more sustainable practices.
This means the accounting is critical. Business usually talks about assets, money, costs… We need to use the same language. Most environmentalists are not very confortable with this. We don´t want to transform nature into a commodity but we do live in a capitalist world and we need to be realistic. Of course, indigenous people in the middle of the Amazon, for example those who live in my country (Brazil), they don´t live in a monitorized world. So you don´t need money to live a wealthy or a good life. But this is how it works for tribal communities, for small communities.
But for many many centuries now we are living in a globalized world, with a globalized trade and that´s the reality and of course biodiversity is a main source of products. You can not do anything in agriculture without biodiversity, in forestry, in fisheries, in the biotechnology sector, in the health sector, in large part of the tourism industry… So it is a significant source of products of wealth and therefore we need to convey with companies that these natural resources are not infinite. In fact, they are disappearing very fast. They need to pay more attention to this because if these natural resources disappear then the conditions to operate will cease and change completely and many of the current businesses might not be viable any more in the future.
It is in the companies own interest to use wisely natural resources.
MMA.- Which sectors are more interested NCA? In Spain, the sectors that are more interested in monitoring progress made in Natural Capital Accounting are construction and energy.
BFSD.- I think there are many sectors interested. Each one is different. For example, those sector which depend on biological resources as raw materials, agriculture, food and beverages, cosmetics, pharmaceutics… they understand that they depend directly of biodiversity but they used to think that these resources were infinite. They are having to change the way so they pay more attention. In part, this change is happening through changes in regulation in the legal system. For example, the CBD established the Nagoya Protocol with new rules for access to genetic resources. There´s a growing interest among all these sectors.
Agriculture is an interesting sector, it´s huge and a main user of biodiversity and also it is a main source of pressure on biodiversity. Agriculture needs water, fertility in the soils, pollinators… It depends on genetic resources. There is an increasing interest from these sectors but still there are some conflicts of interest in terms of land use, for example. In many countries there is a crash between the production sector and the conservation sector. Ideally for the long term, it should be a conversion of interests because agriculture should be also interested in making sure that we conserve the natural resources and that they are available in the future.
But in the short term we still see major conflicts. Fisheries is a good example and in Spain this sector is very important. We have been seeing over the last decades we have seen the collapse of many fisheries in the world such us the cod in the coast of Canada and the US. Two countries where traditionally had the largest stocks of cod worldwide. The collapse took place in the early 90´s of the past century and they haven´t managed to restore it. They have spent a lot of money trying to restore it and this hasn´t happened. So this is a good indication of the kind of dangerous that we face. It is not that we can fix everything that is destroyed. I f you extinguish species it will be impossible to restore them.
We need to understand more the limits. There is a lot of talk about the planetary boundaries concept. There are some limits about how much can we exploit nature and we need to understand that. People talk a lot about ecological footprint. Currently we are extracting more from nature than what nature can restore. Clearly this is very unstable.
That goes back to the issue about the accounting. Companies can not understand the cost of ecology so they need to understand the issue of biodiversity in economic terms. Even though there are concerns from environmentalists defending that we should not try to put a price on nature and just trade everything related to nature because there are different kinds of values, the economic values are important components. So we need to pay due attention.
Having tools to assess the economic values of biodiversity is a first big step but it is not sufficient. We need them to find ways to measure the trends whether we are still depleting biodiversity and natural resources or whether we are able to exploring more sustainable ways.
The capacity to monitor is important. Then there is the issue of changing corporate policies in the practice. Both issues are relevant.
There is a big danger of greenwashing. It´s easy and cheep so many companies go for it. That is a big problem. There´s a lot of greenwashing and we need to separate what is really meaningful efforts and what we want to see is companies right from the top (the CEOs) to all the staff understanding the issues related to biodiversity and the environmental aspects.
MMA.- Take the example of Puma. They have done an amazing job incorporating their biodiversity assets to their Profits and Loss accounts. This is the path all companies should follow but sometimes businesses, even when they have done important efforts to conserve or mantain environment, prefer not to report this information because they probably are aware of the fact that they could have done more. Isn´t it controversial for companies to show the real biodiversity impacts they cause?
BFSD.- Many companies are aware of some of the issues and the fact that they are not very sustainable but they don´t want to take the responsibility. As long as the governments, the consumers, NGOs… accept this many companies will prefer to continue like that. Continue business as usual not to face their issues and their responsibility. The problem is that this leads to a disaster.
The results of the report in Puma reflects the pattern in most big companies which is most of their ecological footprint is in their supply chain not in their main production plants. Since most companies operate in a globalized world their footprint is distributed all over the world. That´s one of the big challenges that we have.
For example, currently the main standard for reporting doesn´t include the supply chain. Many companies are very confortable with this because they want to dismiss their responsibility but this is not good for environment and this is not good for society. So governments and society should keep a pressure on companies to change this behaviour.
This will come starting measuring things and we need transparency, standards… At the same time, companies need a more long-term strategic view. Unfortunately, most businesses operate with short-term strategy. For example, we saw recently the news about the big disaster in Brazil where there were two main reserves of mining residues wasted because the dams they had built were not good enough so they collapsed in the city in Mariana in the state of Minas Gerais. It was a huge quantity of mud that was released with toxic minerals and it completely destroyed the whole valley and travelled 1000 km to the sea. There was so much mud that killed all the fishes along the river.
Which is interesting and related to this is that recently in the Brazilian Congress they were discussing to review the legislation of environmental requirements for the mining industry. What happened is that many big mining companies had paid to help the election to many Parlamentarians and these Parlamentarians are the ones defendinf the interests of the mining industry. What they have been trying to do is to reduce the environmental requirements right in licensing, etc.
Now you have to ask the company what is worse: if the companies have a short-term gain in reducing the regulations and the environmental requirements because they have to spend less but when a disaster comes the price that the companies will have to pay is huge. They will have to afford billions and billions of compensation to restore all destroyed environment, the houses, the infrastructures, the animals that were killed, etc.
If these mining companies were more intelligent they would have seen that for a long-term benefit is much better to have good environmental regulations.
During these two days in the World Forum on Natural Capital we have been talking about engaging the private sector to be more responsible and to take leadership, which is fine and we need that. But at the same time, governments need to play their role. We need regulations because as some participants have been saying during the Forum the market alone will not assure sustainability and conservation of biodiversity.
MMA.- Companies learn from each other, is this one of the key levers for needed change?
BFSD.- Yes, I think offering opportunities for exchange of views and learning is important. This transition phase is happening and is a learning curve. All companies and players have to learn. The better that we facilitate the exchange of experiences the faster this learning curve will be. Otherwise this would take a long-term.
MMA.- During recent CBD Business & Biodiversity Forum 2015 one of shared messages was: «We must be able to change biodiversity language to ensure that biological diversity is fully integrated part of all business models, including procurement and public policy». How such goal could be achieved?
BFSD.- We need to play in several fronts. One is encouraging governments to enhance create more enabling policies. For example, most countries still have operating sectorial policies. Very often these sectorial policies are not coherent among themselves, so something might be look and correct under a sectorial perspective but if you take a broader perspective you see that there are many disadvantages in some of these policies.
The good thing is that the EU has established the 2030 Sustainable Agenda and all the participants in this process agreed that what we need is more integrating and coherent policies. There is a lack of mechanisms to promote these more coherent and integration policies because all governments are organized in many sectorial Ministries and agencies and legislations… in silos. That´s one of the big challenges.
Governments need to create some interministerial mechanisms establishing some policies that works across the different sectors to conduct analysis of potential impact of new policies across different sectors. Economic instruments are key so governments spend a lot of money in the wrong things.
Many of the existing subsidies for energy, agriculture, fishing… have been established years ago and maybe at the beginning they made sense but now many of these subsidies are very out of place and most of the people receiving these subsidies really don´t need many of them.
If you look at agricultural subsidies in some rich countries is usually the rich farmers who get the money. The money spent for subsidies is huge. For example, most governments still subsidy the building of fishing ships, the buying of new gears for fishing and the fuel. So what the governments have been doing is to promote overfishing.
Then we should not be surprised that the result is depleting of fisheries stocks. Ideally, fishing sector should be working together with the conservation sector to increase conservation efforts to restore fisheries stocks and then we´d have more fishes to be fished and more job opportunities.
The problem is an issue of timing. Fishing community is concerned about the jobs but in the meantime we need to reduce fishing efforts. We have a problem of adjustment. Part of this problem comes from governance. We need to develop appropiate governance mechanism for each situation. For example, both in forestry and fisheries we always talk about the tragedy of the commons. These are common goods and there isn´t any incentive for anyone to stop extracting because if you don´t fish others will go out and fish.
One of the solutions is the so called Territorial Use Rights for Fisheries, the TURF, which is the capacity of governments to give exclusive rights of access for fishing for some fishermen communities but exclude others. You designate some territories where you decide these people can fish here but others can not. Doing this you create a new governance structure where those people who have exclusive rights for fishing have an incentive to conserve because they know if they reduce their fishing efforts and allow the stocks to restore they are the ones who get benefit not others. So that´s a big incentive for conservation and for sustainability.
But to do that governments need an appropiate legal frame that allows them to give access rights for some and restriction to others. For example, Chile revised its fisheries law at the end of the 1980´s and since 1995 they started to give these exclusive access rights. Now they have more than 700 of these TURF areas along their coasts and from the information we have their stocks are recovering.
MMA.- What do you think about the following thought: «We need a regenerative development and this must come from the heart, we have to bring the spiritual dimension to the objectives relating to biodiversity»?
BFSD.- Of course, economics should not be the only criteria for doing things and that´s one of the problems including how we measure progress and wellbeing because it´s usually GDP. If you look into some forests areas like Amazon in Brazil, for example, the communities living in the forests don´t have an income so you would classified them as poor. If they would have an income it would be less than one dollar a day but in fact they are not poor. They have a territory, they have natural resources… they have all they need. They can fish, collect fruit, they can plant. If you at them, they look healthy. They are healthy and they are happy.
We need to find better ways to measure health and wellbeing.
MMA.- .- Around 50 leading businesses has recently began testing the latest draft of Natural Capital Protocol developed by Natural Capital Coalition. The aim of this project is to enable business to assess and better manage their direct and indirect interactions with natural capital. It is expected that the launch of NCP will take place in June 2016. In your opinion, what are the main benefits NCP will bring to business?
BFSD.- The Protocol will give the guidance of how to implement NCA in a more standarized way. It brings business from an idea to a more practical implementation of their biodiversity assets. Ideally we need some minimum standards because if people measure and report in different ways it will be difficult to compare companies, to assess progress, etc. Even though we recognize each sector is different from the other, there have to be some common ground. That´s what having a Protocol will help a lot.
Many companies find it difficult on their own to move in this direction so they need support, some references and materials, so the Protocol should help a lot.
MMA.- COP21 is just around the corner. What are your expectations? Do you trust the coveted global climate agreement will be achieved?
BFSD.- We have already seen some progress. More than 150 countries have submitted their reducing emission targets, the INDCs, which is a great achivement and together if all these commitments are implemented it will have a significant impact to reduce emissions of greenhouse gases.
There has to be a progress in financing for climate change. The Green Climate Fund and others mechanisms are becoming really effective.
We have seen a shift in some major countries. For example, the US with Obama is much more progressive in terms of climate change. Other positive shifts come from Canada and China, which is more proactive. I think it´s a good conversion that all the main countries that have significant emissions are supporting the needed change.
But there is a big problem: Obama doesn´t have the support of the US Congress so he can´t commit to a legally binding agreement. Ideally we should have a legally binding instrument but it only makes sense if all the major players are part of it.
We have learnt some lessons with the Kyoto Protocol. It was a good commitment, but many important countries emitting greenhouse gases did not commit so it didn´t work.
Things are changing. Even in a country like US where there was a lot of skepticism about climate change in society, press, politicians… now surveys show that more than 60% of US citizents believe in climate change. Things are changing.
There was a recent article in The New York Times about the farmers in Iowa, which is a very representative of a very highly industrialized agriculture. It´s one of the main producers of soya and maze and is one of the centres of the conservative political parties, the Republicans. In this article they interview farmers in Iowa showing that they are more and more investing in renewable energy, solar and wind and also in some sustainable agriculture practices.
The article shows that farmers are more aware about costs going up so they have to find ways to be more economic and also mentions the increase of floods and droughts, so they are suffering from these impacts. That´s why they know they have to change the way they are doing agriculture.
This view is interesting because shows that even the most conservatives sectors of society are finally seeing that climate change is really real, it´s happening and they need to pay more attention.
All this will help to make Paris a successful COP. We might not get a legally binding agreement from Paris but it will be probably a package good agreements and one of the expected outcomes are commitments to review goals to reduce greenhouse emissions in a few years time so the Parties can increase their commitments.
Some major companies are also changing their policies. We are seeing this more and more. In the finance sectors there have been also some good changes so it´s still a partial change, we are not there yet, but we can see it.
For example, Brazilian livestock sector used to be the least sustainable. Traditionally is responsible for deforestation, fires and other problems and illegal activities and now it´s changing completely. For a number of reasons one of the major ones is because the government monitors deforestation and fires on a regular base so we know what is happening and all the society also knows the pressure, but also because of the targets. Once the government has started to commit the targets in terms of greenhouse gases emissions in 2009, it adopted targets for each sector. Livestock sector was suddenly putting this reality, this pressure, to operate under new conditions. But this is happening because this sector has good signals from the government, because the targets committed are being measured, because the financial sector is using this information and putting pressure to companies to meet the goals and saying: «if you continue to deforest, you will not have access to funding or it will cost you more».
The government is also penalizing the deforestation and there is a partnership between the government and the Brazilian Central Bank and when a companies reaches a high level of deforestation is excluded from public funding. There is also pressure from the Independent Prosecutors Office that is using legal procedures against high deforestation and is being very active. There is also a big social movement claiming for legal meat. They are putting pressure on big companies, governments and all big supermarket chains not to buy meat from places that have being deforested. This means things are changing and moving fast.