Calvert  News & Commentary

Rio+20: Missed opportunities and signs of progress

Calvert’s perspective on outcomes from the UN Conference on Sustainable Development, Rio+20.


Twenty years ago, the first Earth Summit in Rio de Janeiro, Brazil, was a watershed event. It created climate and biodiversity conventions and set the stage for formal and informal frameworks and platforms to address global environmental degradation, climate change and poverty. But at this June's "Rio+20 Summit" it was the side events—especially the external meetings led by the private sector and civil society—that achieved the most compelling and concrete commitments. The Eurozone financial crisis and the U.S. election limited progress in the formal negotiations among governments. Tensions among developing and OECD countries over the extent, pace and cost of carbon reductions also hindered the negotiations.

After months of preparations, a ten-day conference and meetings involving over 40,000 people, the final outcome document of Rio+20, called "The Future We Want," makes broad statements in support of placing economic value on natural resources, the promotion of sustainable consumption, and the importance of women and Indigenous Peoples to developing solutions. Aside from achieving the goal to keep the negotiations moving forward to 2015, the agreement falls far short of the concrete commitments required to make significant further progress on the critical sustainability challenges of climate change, water scarcity, biodiversity loss, and poverty. In fact, in many ways "The Future We Want" at best only reaffirms and in some cases even weakens goals set at the 1992 Summit.

Civil society held its own "People's Summit" in Rio to establish goals for sustainable and just development. Both the Latin American and Asian Pacific delegations developed strong statements against the promotion of biofuels, genetically modified crops, and nuclear energy. The groups protested the Green Economy proposal in "The Future We Want" document for its emphasis on the commodification of nature and the use of financial instruments to value ecosystem services. In the rush to secure carbon credits, they argue, local communities may be denied basic rights, pushed off land or inadequately compensated. Instead, they urge developed countries to reduce greenhouse gas emissions aggressively and abide by their climate commitments. Overall, the People's Summit expressed a keen distrust of the role of corporations and even more fundamentally the capitalist system in providing equitable solutions.

Sustainable and responsible investors can be reasonably disappointed by the lack of concrete commitments coming out of the formal conference, as well as the apparent disconnect with many NGOs and grassroots organizations. However, there are a number of innovative initiatives and positive outcomes from the entire Summit, many connected to companies which are held in Calvert funds and in some case major dialogue partners as well.

Barbara Krumsiek, CEO, Calvert Investments

Calvert's President and CEO, Barbara Krumsiek, attended Rio+20 and spoke at several events, both in her Calvert capacity and as Co-Chair of the United Nations Environment Programme Finance Initiative (UNEP FI). She addressed themes ranging from board oversight of sustainability, social enterprise and impact investing, the role of business in promoting gender equality, the business case for the green economy, and natural capital. Read more details about her speaking events in Rio here.

Some examples of corporate commitments:

  • Some of the most promising gains made at Rio were related to improved reporting and disclosure. Most notably, the Corporate Sustainability Reporting Coalition, to which Calvert is a signatory, worked hard to keep language in the outcome document that promotes "report or explain" disclosure and integrated financial and sustainability reporting of major companies. In support of this effort, the governments of Brazil, Denmark, France and South Africa announced they will launch a platform for developing international sustainability reporting, working with the Global Reporting Initiative (GRI) and the United Nations Environment Programme (UNEP). The Sustainable Stock Exchange Initiative (SSEI) aims to improve disclosure and performance of corporations held in key stock exchanges. A number of stock exchanges—such as those in China and Brazil —already require corporate sustainability reporting. Other exchanges—including NASDAQ (NDAQ)—agreed at Rio to encourage their listed companies to report on environmental, governance and social (ESG) issues, or explain why they do not do so.
  • 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, clean water, and biodiversity. Calvert is a signatory to the NCD and spoke at the launch in Rio, stressing the need for companies to disclose their use of natural resources and clarify potential impacts on local communities and Indigenous Peoples.
  • Forty-five CEO members of the UN CEO Water Mandate committed their companies to make water use efficiency and wastewater goals for their own operations. Companies will also lobby governments to include more input from civil society, improve water infrastructure and pricing, and increase efficiency. Some of the signatories include Coca-Cola (KO), PepsiCo (PEP), and Unilever (UN).  Calvert is also a signatory.
  • Private investors committed to invest over $50 billion, and more than 50 governments pledged to adopt clean energy goals as part of the "Sustainable Energy for All" initiative. Microsoft (MSFT), for example, announced that it would go carbon neutral, establishing an internal carbon fee within its international business operations. The Sustainable Energy for All program aims to provide access to electricity services to everyone on earth by 2030, and to double energy efficiency and alternative energy production.
  • Other corporate commitments focused on improving company operations and products. For example, Infosys Limited (INFY) committed to sourcing 100% of its electricity from alternative energy, and becoming carbon neutral by 2018. Procter & Gamble (PG) committed to replace 25% of all products based on petroleum with sustainably sourced renewable materials.
  • A coalition of over 400 companies in the Consumer Goods Forum reaffirmed a 2010 pledge to reach zero net deforestation within their supply chains by 2020. The difference in the Rio pledge is that it is in partnership with USAID, which will provide funding for key program work. The Avoided Deforestation Partners sponsored the kickoff event, with Jane Goodall as the keynote speaker. Companies involved in the program include Coca-Cola and Unilever (who co-chair the Consumer Goods Forum), Procter & Gamble, 3M (MMM), Hewlett-Packard (HPQ), General Mills (GIS), Kellogg (K), and others. The program was widely praised by business leaders and many NGOs, such as World Wildlife Fund, which will help to implement the program. Several grassroots organizations, however, expressed concern that the program might harm forest communities.

Even if further global agreements among governments remain elusive, there are tangible commitments by major companies and the promise of continued negotiations. Progress on disclosure of environmental, social and governance impacts by companies and investors is a real step forward. Concrete pledges in the areas of water and energy are also encouraging. Indeed, the Executive Director of the UN Environment Program, Achim Steiner, explained that the outcome document has a "hidden richness that will allow many activities to go forward.1

Commitments by companies and investors are no substitute for broad agreements by governments on climate change and political leadership. Calvert expects that companies and investors are likely to remain the main drivers of progress over the next several years. While they are to be encouraged and commended, their efforts cannot substitute for binding governmental commitments.

1. SciDev.Net, Science and Development Network, Aisling Irwin, "Scientists criticize lack of urgency in Rio+20 accord, June 25, 2012.

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