Gcp drivers11 jun'11
1 like217 views
This document summarizes a presentation about reducing deforestation driven by corporate and financial sector demand for commodities. It discusses how certain commodities like beef, soy, palm oil, and paper drive deforestation. It then outlines the Forest Footprint Disclosure Project which asks companies to disclose how they manage deforestation risks in their supply chains. Over 300 companies have been targeted. The project aims to identify leaders, engage investors concerned about risks, and help companies improve their practices to ultimately reduce the global forest footprint.
Gcp drivers11 jun'11
- 1. Forests and Climate Change Science • Policy • Finance QuickTime™ and a QuickTime™ and a decompressor decompressor are needed to see this picture. are needed to see this picture.
- 2. REDUCING THE FOREST FOOTPRINT OF CORPORATIONS AND THE FINANCE SECTOR THE FOREST FOOTPRINT DISCLOSURE PROJECT Andrew W. Mitchell Chair FFD Steering Committee General Presentation Autumn 2009 Global Canopy Programme
- 3. How does Business Drive Deforestation? • Beef and Leather • Soy • Palm Oil • Paper and Pulp • Bio-fuels • Oil and Gas and Mining
- 4. Building Bridges • Along the length of a supply chain • Between corporates, NGOs and Researchers • Between companies and their investors
- 5. Why Investors care about Forest Footprint Disclosure? • Economics of much deforestation is driven by demand for commodities • Halting deforestation is now a key action on climate change to 2020 • Political and Regulatory frameworks being put into place • $5+ billion has been pledged to make it happen
- 6. The Risks - Ecosystem Services underpin Climate, Water, Food, Health & Energy Security EG: Amazonia • $1 trillion food industry share this eco-dependency • 3 trillion tonnes of water stored • 8 trillion tonnes of water vapour evaporated each year • Deforestation may mean declining service provision • Rising temperatures may compound the effects The Amazon’s Rainfall Service? After J. Marengo, INPE
- 7. 13 Million hectares converted annually
- 9. Global supply chains…. their lives.. and ours QuickTime™ and a dec ompressor ar e needed to see this pic ture.
- 10. A New 21st Century Economic Opportunity? Natural Capital & Ecosystem Services Worth US$1.4 - 4.5 Trillion per year UNEP- TEEB Review 2010 Business in the future must account and pay for the restoration, maintenance, and growth of natural capital it uses
- 11. Eco-Utilities & the ‘Biosphere Economy’ Amazon Eco-Utility draft framework Stewardship • Climate Security • Water Security Community Forest • Food Security • Energy Security Ecosystem • Health Security Services (local) • Livelihoods Ecosystem Services Benefit sharing (regional-global) Economy
- 12. RELEVANCE IN THE UNFCCC PROCESS UN CDM > REDD > REDD+> PINC? 1t/CO2 1 ha/forest? Three complementary and reinforcing mechanisms for conserving and restoring forest and mitigating and adapting to climate change
- 13. HOW TO ENGAGE WITH CORPORATIONS AND FINANCE DRIVERS STOP > MOVE > INTENSIFY • Regulation - disincentivise bad behaviour • Restore degraded land - perverse subsidies? • Increase efficiency - sustainably • Positive Incentives - market pull/Tax credits • Operate at scale - aggregate projects • De-risk investments - Eg. insurance
- 14. KEY ENTRY POINTS FOR REDD • ROUND TABLES (Soy/Beef/Palm/Biof/ etc) • FOREST RISK COMPANIES • FOREST RISK INVESTORS • DESIGNING FINANCE MECHANISMS • FOOD/ENERGY/SUBSIDY REFORM • PUBLIC PROCUREMENT • CARBON/ATMOSPHERE > FOOD/WATER
- 16. A Case Study: Forest Footprint Disclosure • Understand and reduce the impacts of the use of Forest Risk Commodities on deforestation • Review FRC supply chain ‘better practice’ annually • Deliver relevant risk information to investors • Identify sector leaders • Build capacity for change TO REDUCE THE UNSUSTAINABLE GLOBAL FOREST FOOTPRINT
- 17. How does Forest Disclosure work? • Global project - based in the UK • A Disclosure Request is sent to companies asking them how deforestation risk is managed within their supply chains • Key ‘forest-risk commodities’ covered: timber, soy, beef & leather, palm oil and biofuels • US$5.7 Trillion asset managers endorse the disclosure request • Targets 300+ listed companies
- 18. Deliverables • Disclosure Request data series • Sector leaders highlighted in Annual Review • Specific company reports for investors and participants • Input into round tables and investor-focused events on FRC risks to business • Private sector engagement on deforestation supply chains
- 19. Why is the Finance Sector Engaged? • Indentifies risks and opportunities • Provides a forum for deforestation issues within finance community • Safeguards future financial risks • Leads new dialogue with corporates • Opens up potential new markets
- 20. Investor ‘endorser’ engagement is growing Number of endorsers (Column) AUM (USD) line 50 4,500 45 4,000 40 3,500 35 3,000 30 2,500 25 2,000 20 1,500 15 1,000 10 5 500 0 - May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May 2009 2010
- 21. Deforestation: Downside Risks • Reputation impact: Consumer/Customer/Staff • Regulation is tightening • Supply chain dislocation • Commodity price inflation • Decreased access to finance • Exclusion from mature markets • Carbon pricing impact (unclear)
- 22. Upside Opportunities: of Not deforesting • New funding for agricultural reform • Preparedness for new regulations and markets • Marketing opportunities vary globally by consumer education and credibility of labelling • Public procurement increasingly demands sustainability criteria • Investor valuation opportunity (unclear) • Staff and Consumers love you more!
- 23. Selection of Target Companies • Sources: Global 500, FTSE 350 to 100, Eurostoxx and additional major players in key emergent stock markets • Filtered according to known or anticipated Forest Risk Commodity profile • Key privately owned companies known to have a high impact through growing, trading or buying + voluntary participants!
- 24. Performance Improvement • FRC issues are not well understood • Companies want neutral sources of expert support – FFD offers customised feedback • More sophisticated are asking for standards and quantification of impact • Public procurement has a big role to play • FFD builds capacity: Metrics Workshop (Sep 2010) and Peak Soya? (May 2011)
- 25. The 2010 DR Cycle: Sector Leaders • Basic Materials Stora Enso Oyj • Biofuels Greenergy • Clothing/Accessories Adidas AG and Nike Inc • Farming and Fishing IOI Group • Food & Drug Retail Carrefour and J. Sainsbury • Food Products/ Soft Danisco • General Retailers Marks and Spencer • Industrials/Construction DLH and Weyerhaeuser • Media Reed Elsevier • Oil and Gas Neste Oil • Personal care /Household Kimberly-Clark • Travel and Leisure British Airways • Utilities Drax Group
- 26. The FFD Disclosure Request
- 27. NEXT STEPS 1. Building Bridges between Commodity Round Tables and REDD How to fund transition costs IPAM + others 2. Innovation in Forests and Finance How to leverage public funds GCP + others
- 28. We Thank the Institutions Below for their Financial Support: Department for International Development (DFID) The Esmée Fairbairn Foundation The Rufford Maurice Laing Foundation CLUA The Waterloo Foundation