"Samsung Smart is shameless and miserable," say activists. Corporations undergo rigorous examination at the IUCN congress.
Credit: Amantha Perera/IPS
Companies Calculate Their Debt to Planet Earth
By Amantha Perera
Since the Industrial Revolution, companies have
continued to operate without putting a value on
JEJU, South Korea, Sep 17 (Tierramérica).- As ravenous consumers of natural resources,
companies are beginning to recognize that they owe
a monetary debt to the planet, and are sharpening
their pencils to calculate it.
In 2004, when the International Union for
Conservation of Nature (IUCN) held its four-yearly
World Conservation Congress in Bangkok, Thailand,
there were only two major business leaders
attending it, recalled Peter Bakker, the current
president of the World Business Council for
Sustainable Development (WBCSD).
"In 2008, in Barcelona, Spain, there were a few
more. This time, the first thing you see when you
enter (the congress site) is the business
pavilion," Bakker told Tierramérica.
Bakker takes the conspicuous presence of private
enterprises at this year’s congress, held Sep. 6-
15 in Jeju, South Korea, as an indicator of the
role businesses can play in saving the environment
and creating sustainable growth.
When the first United Nations Earth Summit took
place in Rio de Janeiro in 1992, the big novelty
was the WBCSD, which ensured the presence of the
private sector in environmental discussions. The
prevailing view at the time was that private
companies were the worst enemy of nature.
Two decades later, that thinking has undergone a
major shift, with large multinationals like cement
giant Holcim and medium-sized companies like Sri
Lanka's Dilmah tea company all showcasing their
nature-friendly side at the congress.
But good intentions are not enough. Experts like
Bakker say that businesses need to embrace change
and recalibrate the way they carry out operations.
A big part of the change would be considering
their impact on their surroundings as a key factor
in the decision-making process. One of the most
important steps forward would be to evaluate and
eventually put a value on the impact on nature
made by each company, big or small.
"Many companies have had a steep learning curve on
assessing their impact on the environment," said
The WBCSD top official said that as companies take
into account their imprint on the world they
operate in, costs are likely to rise, especially
if changes are implemented.
"One of the biggest challenges in the future will
be to analyze the impact on natural capital. How
are we going to value natural capital?" he asked.
It will not be easy in a world where natural
resources like water usually carry zero value.
Pavan Sukhdev, author of the new book Corporation
2020: Transforming Businesses for Tomorrow's
World, also supports the idea that companies need
to quantify and put a monetary value on their
impact on nature.
Sukhdev told Tierramérica that since the
Industrial Revolution, companies have continued to
operate without putting a value on natural
He is calling for a regulatory change whereby
accounting standards are changed to reflect a
company's impact on its surroundings. "The
accounting bodies need to be telling companies
that they need to report natural capital impact,"
Even change within big companies, like Walmart,
can only reach a limited section of the global
population, but if regulatory systems can be
changed, that will be reflected across the board,
The author touched a sensitive nerve by stating
that companies need to look at a business model
that not only creates profits but also human,
social and natural gains.
One of the global giants that claim to be doing
this is Puma, the shoe and sportswear company,
which is updating its accounting methods to
include “the cost to nature of doing business,”
said company representative Holly Dublin.
Puma contracted the consulting firms
PricewaterhouseCoopers and Trucost to prepare an
Environmental Profit and Loss Account, applied for
the first time in 2011.
In the first stage, the tons of greenhouse gases
emitted and cubic meters of water consumed in its
business and operations throughout the supply
chain were calculated and valuated.
The first results revealed a sum of 185 million
dollars in impacts on ecosystems and the
environment during 2010.
Water consumption and greenhouse gas emissions
accounted for roughly 121 million dollars in
impacts. The rest, calculated during a second
stage, corresponded to changes in land use for the
production of raw materials, air pollution and
waste, primarily in the supply chain.
Puma plans to adopt full accounting of
environmental and social costs and benefits which
will also encompass acid rain and smog precursors,
volatile organic compounds, fair wages, employment
creation and tax contributions, among other
Since the first estimate of impacts was
calculated, the company has set a target of
achieving 100 percent sustainable packaging and a
25 percent reduction of carbon, energy and water
use by 2015.
Dublin said that since the conclusion of the
United Nations Conference on Sustainable
Development (Rio+20) in June, Puma has been
overwhelmed by interest shown by other companies
in its new accounting system. But in order for
everyone to have access to this new tool, "it has
go open source," she commented.
However, if changes like these are to have a wider
impact, one more factor is important, stressed
Bakker: the role of businesses in fast-growing
economies like India, China and Brazil.
With a combined population of over three billion,
these countries need to take a firm stand that
they will not compromise on environmental well-
being to achieve rapid development.
"If we can't get these countries to develop
sustainably, then we have no hope," he said.
Bakker believes that the growing economies have
the chance to jump to the next level of nature-
friendly technologies, such as mobile phones over
fixed lines, or alternative energy sources like
wind and solar rather than reliance on thermal
"If they copy the consumerism of the West, we are
in trouble," he said.
The WBCSD has already calculated the damages of
In the last 50 years, 60 percent of the world's
ecosystem services - such as freshwater, fiber,
food, climate regulation, flood control, water
purification and waste treatment - have been
degraded, according to a new WBCSD report released
here in Jeju.
The costs of ecosystem degradation are huge: for
example, between two and five trillion dollars in
ecosystem services are lost each year just from
deforestation, reveals the study “Biodiversity and
Ecosystem Services: Scaling Up Business
Nature, it appears, has a steep price tag.