As the the global sustainable development summit, Rio+20, begins this week, 24 of the world’s most valuable companies worth a half trillion dollars have announced a plan this morning to work on assigning a value to the world’s most valuable resources. Companies including Dow Chemical, General Motors, Kimberly-Clark, Marriott and Xerox have joined forces to make the statement that more careful stewardship of the world’s natural resources is a necessary and strategic imperative.
Led by the Corporate Eco Forum and The Nature Conservancy (TNC), these 24 companies are developing a methodology to assign a value to the world’s forests, freshwater and marine systems. Advocates for more sustainable business practices have long claimed that one reason why convincing businesses to embrace sustainability as part of their core strategies has been a challenge is that the most important basic natural resources have long been undervalued. Assigning such a value, however, has long been problematic. In a report titled The New Business Imperative: Valuing Natural Capital, these companies describe the framework underway that will prioritize ecosystems in business planning and investments that in turn will reduce risk, cut costs, enhance brand value and fuel sustainable long term growth.
For MR Rangaswami, a former software executive, Silicon Valley angel investor and founder of the Corporate Eco Forum, this morning’s announcement has been six years in the making. Rangaswami founded the Corporate Eco Forum with the goal of providing C-level executives from Global 500 companies a safe haven to share ideas on how to incorporate ecosystems valuation within their overall decision making. In an interview with Rangaswami before he left for today’s announcement in Rio, he said,
“I have long understood the importance of sustainability, and realized I had three options: first, I could just buy ‘green products’ and hire Greenpeace to advocate for more responsible practices; second, I could focus on public policy; or third, work with the world’s leading companies and push them forward. I chose the third option.”
Rangaswami sorted out that while a bevy of multi-stakeholder organizations working on sustainable business challenges are doing good work, a safe haven where executives from top companies could talk with each other and learn from their peers did not exist. To that end, Rangaswami launched the Corporate Eco Forum with an initial 30 companies. Each year five or six new firms, carefully vetted, join the organization, which in turn hosts several meetings a year to discuss ways in which the private sector can strive to make the solid business case for sustainability. Such meetings are held without any sponsoring organizations or journalist to ensure a “safe zone” in which business leaders can challenge each other to find pragmatic solutions to the growing environmental challenges that are already starting to affect these companies’ bottom line.
The results have been new working relationships between NGOs and leading companies that at first sound counterintuitive. For example, cooperation between TNC and Dow Chemical last year led to a $10 million agreement that aims to create practical business tools that can assess the value of nature to businesses. And this week in Brazil, other companies will announce radical changes to their strategic models and business practices. Kimberly-Clark, for example, will reduce the sourcing from “natural” forests as much as 50 percent and instead source alternative fibers by 2025. More announcements will come this week out of Rio from this diverse group of companies that includes such sustainability trailblazers as Nike, Unilever and Patagonia along with companies that are often in critics’ crosshairs like Clorox, Coca-Cola and Duke Energy.
Past UN conferences have had a solid track record in concluding with more questions than actual agreements, the work of organizations including the Corporate Eco Forum, if successful, could prove to be yet just another example of how the private sector’s actions on the world’s most pressing challenges are often far ahead of government.
Leon Kaye, based in California, is a sustainability consultant and the editor of GreenGoPost.com. He also contributes to Guardian Sustainable Business and Inhabitat. You can follow him on Twitter. Photo courtesy Leon Kaye.