MOVING TOWARDS A RESTORATIVE ECONOMY

29 SEPTEMBER, CHARTERED ACCOUNTANTS HALL LONDONCLIMATE SUMMIT 2014

SUMMARY REPORT

Climate change, extensive biodiversity loss and global population growth represent the greatest challenges we are facing in the 21st century.

Together, we have the knowledge, funding and technology available to successfully reverse these destructive impacts. All groups and people on ‘enterprise earth’ have a role to play in harnessing our collective resources to transform the global economic model.

On Monday 29th September 2014, the 4th B4E Climate Summit was held in London. Organised by Global Initiatives in partnership with WWF-UK, The Climate Group, Forum for the Future and ICAEW, the event asked participants to define net positive impact whilst agreeing on practical actions for business, governments and civil society, covering energy & carbon, forestry & biodiversity and water. This document summarises the discussions and recommendations agreed by participants.

NET POSITIVE IMPACT

Pioneering companies are already demonstrating their capability as a restorative force to strengthen society, spur innovation and combat climate change. They are replenishing more water and creating more energy than they use, whilst enabling biodiversity to thrive.

They have chosen to go beyond zero impact and the circular economy by creating regenerative business models that have a net positive impact on the triple bottom line. Net positive approaches go beyond traditional CSR in their vision, scale and scope. Strong investment and innovation requirements mean this cannot be achieved alone.

The concept of net positive is relatively new. Consequently, there is a need for more sophisticated definitions and universal mechanisms, as well as the ideal political and financial frameworks, for a restorative economy. Delegates were in agreement that despite uncertainties, organisations should begin with practical action, with a view to learning through doing.

PARTNERSHIP AND COLLABORATION

Delegates agreed that radical partnerships and pre-competitive peer-to-peer collaboration will be critical to achieve the system-level change required. The opportunities arising from net positive business strategies are only realised through becoming engaged with relevant networks, both including and going beyond the value chain.

To achieve net positive, business should:Look at ways to stabilise supplier relationships, enhance traceability and support

suppliers to act sustainablyBegin dialogue with local governments and communities to map impact hot spots and

interdependenciesEnsure that industry bodies, certification schemes and investments align with the

material issues and values of the business Create products and services to help customers have a net positive impact Crowd source for net positive ideas among employees and other stakeholdersBe transparent in internal and external communication

THE ROLE OF BUSINESS

The Net Positive Working Group, hosted by Forum for the Future, WWF and The Climate Group, includes innovative companies who are already working towards net positive outcomes and demonstrating business benefits. There is an important role for pioneering companies to set an example for net positive and ensure that incremental efficiency improvements sit within a bolder vision for change.

To support the move to a restorative economy, businesses should:Help other organisations work towards the same agenda, including those who do not

have a direct operational impact on the environment Together advocate for a clear, appropriate and stable regulatory framework Work closely with national governments in their countries of operation to ensure

businesses are both addressing the national agenda and helping to shape itDemonstrate that business stakeholders welcome and demand both disincentives and

incentives required for transformation in the short and long term

THE ROLE OF GOVERNMENT

Whilst the international community is currently working towards a global climate agreement, local and national governments have a significant role to play in the governance of inherently localised environmental entities such as water and forest.

To support system-level change, government should:Work more closely with businesses to produce long-term strategies that go beyond GDP

and consider natural capital Tailor and more widely implement policies that have already successfully produced

restorative outcomesEnsure that subsidies for sustainability as well as tender processes a) support new

innovative businesses as well as the incumbents, and b) recognise business’ vision for the future, not just what they have done in the past

Ensure that public procurement policies support net positive strategies Create ministerial synergies to work towards a restorative economyImprove communication systems between governments at all levels

THE ROLE OF CIVIL SOCIETY

Non-governmental organisations, think tanks and consultancies are connectors between businesses, governments and communities.

To enable organisations to shape their future operating context, these groups can:Facilitate sharing of net positive roadmapsHelp to pilot net positive projects, for example customer choice editing and reward

schemes for the purchase of net positive products Work with government to establish clear environmental disclosure standards Develop guidelines for the monitoring, (integrated) reporting and verification of net

positive strategiesExplore opportunities to support business in convincing their CFOs and board of the

business logic around a value-enhancing net positive approach Help to formulate incentives for the achievement of net positive KPIs up to board levelAid capacity building, training and financial support for natural resource managers,

in cluding indigenous peoples and farmers in emerging economies, to allow them to benefit from working sustainably

RECOMMENDED RESEARCH

Business and government should be informed by the latest science. These key areas are identified for further analysis:

What restorative business practices can learn from a) nature, b) indigenous communities and sharing economies, c) innovation sources including start-ups and young people

The applied definition of net positive management across industrial sectorsThe feasibility of moving beyond foot printing and natural capital accounting to produce

a framework that incorporates monetary, environmental and societal valueThe estimated triple bottom line impacts of modelled ‘climate finance’ options, financial

innovation and economic policy mechanisms (such as re-pricing commodities, facilitating trade, green bonds, permits and tax)

RECOMMENDATIONS FOR A NET POSITIVE ENVIRONMENT

The actions recommended by participants in three event working groups are listed in their focus areas below. Although, holistic net positive approaches should acknowledge that our ecosystems are interrelated. More than three quarters of the world’s accessible freshwater comes from forested catchments, which also play a large role in carbon sequestration. Potential trade-offs between these ecosystems should be identified, addressed and avoided.

ENERGY & CARBONRecommendations for business:

Drive energy efficiency and reduce energy use across the entire value chain If possible, look at capturing carbon and producing renewable energy for others to use Advocate for sophisticated carbon pricing as well as the mandatory disclosure of carbon

data at a higher quality and quantity Scope 1, 2, 3 levels of carbon emissions should be covered in measurement

Recommendations for government policy:Provide a realistic price for carbon with a clear timeline for its depreciating valueProvide favourable incentives for creators of renewable energy, retrofitting and efficiency Support the decarbonisation of the national grid Create a policy framework that supports the availability and affordability of clean tech

FOREST & BIODIVERSITYRecommendations for all:

Produce research that models various approaches to tackling the root causes of biodiversity loss

Look for restoration opportunities in the areas surrounding those used by business to ensure that the carbon absorptive capacity is greater than before operations began

Focus initiatives on products that cause deforestation, for example soy and palm oilEnsure it is more valuable to keep trees standingWork to address the need for education of business and wider society around the link

between companies and products with the natural worldDemarcate and conserve high value primary forest

WATER

Recommendations for business:Measure and reduce water use, then look at the feasibility of processes such as

desalinisation, pollution prevention, on-site waste water treatment plants Replenishing water to go beyond net zero impact in the water basinRaise awareness among suppliers and consumers to help them reduce their own use

Recommendations government policy:De-commoditise the water market by developing a tiered water pricing structure that

takes into account localised factors of water quality, scarcity and accessibilityImplement price penalties for extraction from water sources such as deep acquirersEnsure better transparency from water utilities, for example around leaking pipesProvide geographically-specific caps that are related to environmental indicators like

water flowRevise safety standards so they ensure public health, but do not inhibit the use of safe

waterProduce regulation that encourages the use of rain and grey waterRain water harvesting should be included in new building regulations

MOVING TOWARDS A RESTORATIVE ECONOMY TODAY

The net positive agenda sets the future for a business strategy where positive externalities match financial growth.

Every individual and organisation has something to give and something they can do. The actions being taken need to be institutionalised, widely communicated and scaled up, inclusively.

Organiser: Partners:

Event Partners: