The Road to Rio + 20
Calvert’s perspective on what to expect from the upcoming UN Conference on Sustainable Development, Rio+20, happening June 13-22.
Twenty years have passed since the first Earth Summit took place in Rio de Janeiro, bringing together over 100 heads of state to address thorny issues like poverty and climate change. The 1992 summit was a watershed event, reaching significant agreements and new frameworks for addressing sustainable development. First, the Rio Declaration on Environment and Development (or "The Rio Declaration"), established 27 principles designed to inform global sustainable development after the conference. Second, delegates at the summit agreed on a Climate Change Convention—a treaty that limited greenhouse gas emissions and that served as the basis for the Kyoto Protocol. Other key agreements were to respect the rights of Indigenous Peoples, and the launch of the Convention on Biological Diversity.
The focus of this year's meeting (Rio+20), is "The Future We Want," promoting economic development through the advancement of greener economies. Although the meeting was originally conceived to be a vehicle for securing governmental climate change commitments, it is now clear that the weak state of carbon markets and economic turmoil in Europe may dampen this effort. Nevertheless, we see significant opportunity for improving international cooperation on a number of issues.
- Rio+20 will address carbon emission and pollutants through general carbon policies and commitments to alternative energies. For example, "Delivering Sustainable Energy for All," will work to ensure universal access to modern energy services while doubling the share of renewable energy in the global energy mix by 2030. We expect to see greater commitments from China on carbon emissions reduction and a continuation of strong uptake of renewable energy. US Government commitments will likely be hampered by the uncertainty of US Presidential and Congressional elections.
- The Natural Capital Declaration (NCD) seeks to engage investors, governments, and insurers to develop tools for valuing "natural capital," or goods and services derived from the environment, such as food, fiber, clean water, biodiversity, erosion control, etc. Calvert is a signatory to the NCD and will speak at the launch in Rio.
- Several key investor coalitions are calling for greater transparency on environmental, social and governance (ESG) indicators by companies. These include efforts such as the Corporate Sustainability Reporting Coalition, to which Calvert has signed on.
The global community, with leadership from the United Nations (UN), has achieved real progress on some of the goals set at the Earth Summit in 1992, particularly through the development of the Millennium Development Goals (MDGs). The MDGs commit over 190 UN signatory nations to achieve clear targets for sustainable development by 2015. One of the greatest successes under the MDGs has been cutting the number of people living in dire poverty by half, and dramatically improving access to safe drinking water. The 1992 summit's legacy also includes the growing consensus by governments, companies, and scientists (acting through the Intergovernmental Panel on Climate Change), that climate change is a serious global issue that must be addressed.
The biggest question for investors, companies, and ordinary citizens, is if the collection of smaller commitments to address climate change and environmental degradation will be sufficient, absent a new global and binding climate change treaty.