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Business and Sustainable Development– The Green Race is on
Goteborg, November 2010Björn Stigson
Visiting Professor in Applied Corporate Management
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Agenda
1. WBCSD
2. The Sustainable Development Context
3. The Green Race is On
4. WBCSD Work Program
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Coalition of some 200 leading companies
• Market capitalization: 7,000 BUSD
• Total member company employees:13 million
• Global outreach– Supplies products and services to half of the world’s
population every day
WBCSD
WBCSD Membership
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68
40
24
18
16
11
7
2
1
Swedish Members
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WBCSD Sectors
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18
14
13
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11
10
10
8
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WBCSD Regional Network
Channel to globally disseminate WBCSD’s messages, to promote implementation of concrete projects on the ground and to provide input to WBCSD work program
A World in Transition to Sustainability
SocietyEconomy
Environment
The Future Society: A growth story
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3
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5
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8
9
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1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
Source: United Nations Population Division, World Population Prospects: The 2006 Revision.
World population (in Billions): 1950-2050
85%
15%
Population in less developed countries
Population in more developed countries
2010= 6.9 billion
2050= 9.2 billion
+33%
85%
15%
Income poverty: Over 2 billion people live on less than $2/day
Energy poverty: 1.6 billion people today without access to electricity
Mobility poverty: 900 million people without access to transport
Water poverty: 1.8 million deaths per year due to lack of sanitation,
poor hygiene and unsafe drinking water.
Development: The Poverty Challenge
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Urbanization
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50% urban in 2010: 3 billion
The Urbanized Future
Billions of inhabitants47% urban
60% urban
1970 2000 2030
36% urban
urban
rural
70% urban
3.2 3.32.9
5.0
1.3
2.42.8
6.4
2050
Source: United Nations, World Urbanization Prospects: The 2007 Revision
70% urban in 2050: 6 billion 2010: 3 billion
Shifting demographics
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Source: UN population prospects, 2008
A largely aging world The cost of growing old
Age-related spending (as % of GDP in selected countries) Source: Standard and Poor’s 2010
Shifting Fortunes
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Emerging economies > 50% of global GDP and trend will continue
Sou
rce: A
ng
us M
add
ison
, OE
CD
; IMF
From
Th
e E
cono
mist p
rint ed
ition.
“Wre
stling
for in
flue
nce
.” July 3rd
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08.
% Share of GDP
0
20
40
60
80
1913 1950 2005 2025
Emerging economies Developed economies
* At purchasing-power parity
Risks and Returns
Financial Sector
Societies
Com
pani
es
A World in Transition to Sustainability
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Mindsets
Prioriti
esEquity
Shared visio
n ValuesEnvironment
SocietyEconomyNat
iona
l vs.
Glo
bal
GeographyA
sia vs. NA
& E
U
“The Green Race is on” between countries to transform to low carbon economies and to become the leading supplier of resource efficient technologies & solutions
If you want to win:oTransform your home market to build domestic
demand, competences and scale for exports
The World is Turning Green
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The Green Race is On
EU – Market leader today on green technology exports (40% market share)– 300% increase in R&D for green technologies in 2009– Transformation of the internal market?
US – Mobilizing the US innovation capability?– Transformation of the home market?
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The Green Race is On
China – About to become the leader in the race– Key component of next 5-Year Plan (2011-
2015)– Clean energy investment : No. 1 rank with
21% of the 162 billion USD invested globally– Taking the lead on solar & wind
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The Green Race is On
Japan
– Most energy efficient economy
– Has a good technology platform for green solutions
Korea
– Largest share of economic stimulus devoted to “green” sector (80%)
– Presidential Decree: Green New Job Creation Plan 2009
– GGGI – Global Green Growth Institute
India
– Supplier of low cost solutions based on domestic demand from a large, poor population
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WBCSD Work Program
Focus Areas
- Water - Buildings
- Forest Products
- Cement
- Electricity Utilities
- Tires-Mobility
- Mining
-Eco Patent Commons
-Maritime
ProjectsDev
elopmen
t
Energy and
Climate Ecosystems
The Business Role
Joint ventures
• Urban Infrastructure• Sustainable Value Chains
• Urban Infrastructure
• Sustainable Value Chains
Systems Solutions
- GHG Protocol
- SDMI
WBCSD Vision 2050
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Vision 2050:A platform for dialogue about the role of business in a resource & carbon constrained world.
Vision 2050: Living well, within limits of the planet
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Human Development Index (HDI)
Eco
log
ica
l Fo
otp
rint
(Glo
ba
l He
cta
res
pe
r P
ers
on
)
Source: G
FN
/ UN
DP
Vision 2050 Pathway: 9 elements
23TODAY
The pathway to Vision 2050
Turbulent Teens
24TODAY
The pathway to Vision 2050
Opportunities in Vision 2050
Size of potential additional sustainability related business opportunities
Sector Annual Value in 2050 (US$ trillion at constant 2008 prices)(+/- 50%)
% of projected world GDP in 2050 (+/-50%)
Energy 2.0 1.0
Forestry 0.2 0.1
Agriculture 1.2 0.6
Water 0.2 0.1
Metals 0.5 0.2
TOTAL: Natural Resources
4.1 2.0
Health and Education 2.1 1.0
TOTAL 6.2 3.0
26PwC estimates drawing on data from IEA, OECD and World Bank
Follow-up of Vision 2050
Green Growth / Green Race– Cooperation with OECD
Consumption and Lifestyles
People Matter– Sustainable Management Institute
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WBCSD Work Program
Focus Areas
- Water - Buildings
- Forest Products
- Cement
- Electricity Utilities
- Tires-Mobility
- Mining
-Eco Patent Commons
-Maritime
ProjectsDev
elopmen
t
Energy and
Climate Ecosystems
The Business Role
Joint ventures
• Urban Infrastructure• Sustainable Value Chains
• Urban Infrastructure
• Sustainable Value Chains
Systems Solutions
- GHG Protocol
- SDMI
Focus– To contribute to a sustainable future for emerging
economies and developing countries
Development Focus Area
Key Workstreams:
1.National Market Participation
2.Inclusive Business
3.Energy Access Partnerships (Africa, Asia-Pacific)
Development Focus Area
“Business & Development”
Message:– Business is a key source of
economic growth, employment & technology
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UN Millennium Development Goals
Summit September 2010 Workshop: “Accelerating progress towards the MDGs through
Inclusive Business” Organized by WBCSD and other leading business
organizations and networks
UN Private Sector Forum UN Secretary-General Ban Ki-moon:
“Business is a primary driver of innovation, investment and job creation. There is no longer any doubt that business plays an integral role in delivering economic and social progress."
World Bank President Robert Zoellick:
"The problem of the poor is not the dominance of markets, but its absence."
Measuring Impact Framework – Helping companies measure
impacts to inform investment decisions and conversations with stakeholders
Forthcoming: summary of impact measurement methodologies relevant to business
Measurement & Reporting
WBCSD Work Program
Focus Areas
- Water - Buildings
- Forest Products
- Cement
- Electricity Utilities
- Tires-Mobility
- Mining
-Eco Patent Commons
-Maritime
ProjectsDev
elopmen
t
Energy and
Climate Ecosystems
The Business Role
Joint ventures
• Urban Infrastructure• Sustainable Value Chains
• Urban Infrastructure
• Sustainable Value Chains
Systems Solutions
- GHG Protocol
- SDMI
Takeaways:
Copenhagen saw the end of old ways of intergovernmental negotiations
The Copenhagen Accord– A non binding “Letter of Intent”– But little clarity on how this will be implemented
COP 15 Copenhagen
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Main elements: – Committed limiting global warming to 2°C– Encouraged pledges of cuts from
developed countries and actions from developing countries
– Agreed to transparent reporting of actions– Proposed new mechanisms to manage
finance, technology and REDD+• Committed $30 to 2012• 2nd phase - 100 bln$ annually by 2020
The Copenhagen Accord
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UNFCCC COP 16 Cancun
Little urgency in UN negotiations post-Copenhagen
Expectations for COP16 Cancun played down
Major obstacles:
– Lack of US domestic legislation
– Country commitments to further reductions?
– Reporting and verification principles?
– Technology transfer and funding to developing countries?
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Climate negotiations and business
Governments recognize necessity for business input
WBCSD study for the EU focused on improving this interface
– Need to build an informal track for engagement to complement stronger links to the formal proceedings
Mexican Dialogues 2010
– Providing input on Finance, Carbon Markets and Technology
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Technology
Key issue for business– Need for long term plans to guide
investments and funding of RD&D New WBCSD reports:
1.“Enabling Frameworks for Technology Diffusion”
2.“Innovating for green growth - Drivers of private sector RD&D”
IEA cooperation with WBCSD:– IEA Technology Roadmaps– IEA “Technology Perspectives to 2050”– IEA Technology Platform project
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WBCSD Work Program
Focus Areas
- Water - Buildings
- Forest Products
- Cement
- Electricity Utilities
- Tires-Mobility
- Mining
-Eco Patent Commons
-Maritime
ProjectsDev
elopmen
t
Energy and
Climate Ecosystems
The Business Role
Joint ventures
• Urban Infrastructure• Sustainable Value Chains
• Urban Infrastructure
• Sustainable Value Chains
Systems Solutions
- GHG Protocol
- SDMI
Ecosystems degradation is a risk and an opportunity for business– Core operations – Value chains
Convention on Biological Diversity (CBD)– COP 10 Nagoya, Japan
Ecosystems
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Convention on Biological Diversity
COP 10 Strategic Plan approved by 193 parties which have 2
years to adjust their national biodiversity action plans
– “Aichi” targets for biodiversity by 2020 e.g.
• Increase land Protected Area by 17%; marine to 10 %
• Halve rate of habitat lost including forests
– Nagoya Protocol on Access & Benefit Sharing (ABS)
• Consultation obligations for use of genetic resources
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WBCSD and Ecosystems
Ecosystem Services Review (ESR)– method to develop strategies to manage
risks and opportunities arising from dependence and impact on ecosystems
“Ecosystem Valuation Initiative”
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Convention on Biological Diversity (CBD)
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New WBCSD publications:
1. Effective Biodiversity and Ecosystem policy and Regulation
Business has a strong interest in ensuring ecosystems continue to function properly to deliver both business and societal value
A framework for closer collaboration between business and policy makers on biodiversity conservation is needed
2. Responding to the Biodiversity Challenge 30 member company case illustrations responding to
CBD core objectives
WBCSD Work Program
Focus Areas
- Water - Buildings
- Forest Products
- Cement
- Electricity Utilities
- Tires-Mobility
- Mining
-Eco Patent Commons
-Maritime
ProjectsDev
elopmen
t
Energy and
Climate Ecosystems
The Business Role
Joint ventures
• Urban Infrastructure• Sustainable Value Chains
• Urban Infrastructure
• Sustainable Value Chains
Systems Solutions
- GHG Protocol
- SDMI
Urban Infrastructure Initiative (UII)
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Overall objective: Involving business early in the urban planning process will
help create a cross-cutting strategy and provide competitive and effective solutions
Sustainable Value Chains Initiative
Focus 1st Phase:
– Fast Moving Consumer Goods
– Co-chaired by:
• Unilever and Coca-Cola Objectives:
– A practical “how to” guide including best practice information, templates, case studies, etc.
– Leadership on the Rio +20 (2012) Sustainable Consumption agenda
Material sourcing
Manufacturing
Distribution
Sales & retail
Consumer purchasing
Consumer use
Consumer disposal
End-of-life
New potential Systems Solutions
Food, water, land-use, energy, and climate change
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WBCSD Work Program
Focus Areas
- Water - Buildings
- Forest Products
- Cement
- Electricity Utilities
- Tires-Mobility
- Mining
-Eco Patent Commons
-Maritime
ProjectsDev
elopmen
t
Energy and
Climate Ecosystems
The Business Role
Joint ventures
• Urban Infrastructure• Sustainable Value Chains
• Urban Infrastructure
• Sustainable Value Chains
Systems Solutions
- GHG Protocol
- SDMI
“Water, Energy and Climate Change”– Water & Energy linked
– Impacts from ecosystems and climate change
Measuring water use & assessing impacts:– WBCSD Global Water Tool
– Water Footprint Network
– Development of ISO standard on water footprint
Business input to major water events
Water
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Cement Sustainability Initiative
5 Chinese members Cooperation with
China Cement Association
5 Chinese members Cooperation with
China Cement Association
24 member companies - 10 years of successful collaboration Achievements:
–Cement CO2 Protocol
–Global database on energy and CO2
–Industry guidelines & company commitments (emissions, fuels, raw materials, safety management)
Outlines existing and potential technologies, and how they may help the industry support a halving of global CO ₂ emissions (Dec. 2009)
CSI/ IEA Technology Roadmap
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CSI – expanding scope
Impacts on biodiversity Sustainable use of concrete
Water management
CO 2 M
anagement
Micro-pollutant e
missions
Supply chain
management
Sustainable construction
Trilogy of policy reports– “Power to Change: A business
contribution to a low-carbon electricity future”
– Roadmap of sector specific policy recommendations
Next phase: – Input into the IEA– Global Energy and Water Initiative– e8 project
Electricity Utilities
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Co-Chairs:
Buildings represent 50 % of world energy use
Business opportunity for new buildings as well as refurbishing of existing ones
Report: “Transforming the Market” Key Message: Cutting building emissions by 50%
globally by 2050 is possible at an average abatement cost of 25USD/tCO2 (PIIE, 2009)
EEB Manifesto – 95 Signatories so far Global Building Sector Roadmap in
collaboration with IEA (2011)
Energy Efficiency in Buildings (EEB)
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Co-Chairs:
A World in Transition to Sustainability
WBCSD Book 1991: Changing Course Eco-efficiency : “Doing more with less”
Aim:• To demonstrate that pollution is waste
and sign of bad management• To argue that reducing pollution,
improving efficiency and profit go hand in hand
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The future is going to be resource and carbon constrained
– I.e. The Green Race
Business has a major role to play as a solution provider
Business cannot succeed in a society that fails
A World in Transition to Sustainability
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www.wbcsd.org
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