sustainable finance south africa assessing the...
TRANSCRIPT
This third edition of the WWF Sustainable Finance newsletter introduces The 2050 Criteria, a guide to responsible investment in agricultural, forest, and seafood commodities. These commodities are an integral part of our lives: dairy and beef are a component of the middle-class diet, palm oil is used to cook with in many countries and is an ingredient in soaps and cosmetics; sugar sweetens the food that we eat, and forestry products go into the books that we read and the buildings where we work and live. Their production is supported by modern science and technology but it ultimately relies on the well-being of the workers who provide the necessary labour, and on the health of the environments in which these commodities grow.
Modern banking and insurance were founded on the financing and risk management of the trade in commodities such as silk, spices and timber, with banks financing individuals and organisations from the beginning to the end of the supply chain: from plantation owners to merchant ships, to warehouses, to factories, to retailers. Understanding and correctly pricing the risks at each stage of these supply chains was an important factor in the sustainability of these financial institutions. This fact remains the same today, as evidenced by the plethora of regulatory regimes and production and manufacturing standards and that govern these sectors.
The 2050 Criteria guide provides a framework to identify responsible practices in key soft commodities around the globe, including aquaculture, beef, bioenergy, cotton, dairy, palm oil, soy, sugar, timber, pulp and paper, and wild-caught fish. Covering socially and environmentally impacts and practices, this guide represents a break from WWF’s traditional focus on solely environmental factors, in recognition of the fact that these factors are often interlinked and, along with governance and economic issues, form the basis of sustainability.
The report is available on this URL: www.wwf.org.za/2050_criteria.
I hope that you will find it as educational and encouraging as I did.
SuStainable Finance South aFrica
© Jam
es Morgan / W
WF-International
Malango MughoghoProgramme Manager: Sustainable Business WWF-SA
assessing the 2050 criteria
Soft commodities represent funda-mental building blocks of the global economy and play a vital role in hu-man development. Agriculture, forest products, and seafood supply chains are responsible for feeding, clothing, and helping to fuel the world. In the past decade, soft commodity markets have experienced unprecedented vol-atility and scarcity, generating a range of supply chain shocks, social outcries, and policy responses. In many cases, the Earth’s natural resources are prov-ing insufficient to meet accelerating global demand. Such trends pose a threat to businesses and investors, key ecosystems, and society at large. The 2050 Criteria provides a summary framework for mainstream financial actors to promote the global sustain-ability of these resources and the mar-kets that depend on them.
The 2050 Criteria addresses 10 ma-jor global commodity sectors. These sectors are identified as high priority by WWF owing to the depth and sig-nificance of their current and poten-tial aggregate impacts on global bio-diversity, greenhouse gas emissions, and water use. These sectors include: aquaculture; beef; cotton; dairy; palm oil; soy; sugar; timber, pulp, and pa-per; wild-caught seafood; and bioen-ergy. Overall guidance is also provided
for ‘other terrestrial commodities’.
Each chapter contains a summary of the industry and a guide to respon-sible investment. Primary environ-mental and social risks associated with the sector are clearly outlined. Leading standards and certifications, which can function as robust systems of verification and traceability, typi-cally representing current best prac-tices for mainstream financiers, pro-ducers, and procurers, are identified. For markets where credible standards do not yet exist, or for firms just be-ginning on the path to sustainability, the cornerstone of this document is the Key Performance Criteria (KPC) for identifying environmentally and socially responsible companies and projects. The 2050 Criteria’s environ-mental and social risks and mitigation criteria are organised according to 10 cross-cutting themes: Biodiversity Loss & Conversion; Climate Change & Air Quality; Soil Erosion & Degrada-tion; Water Use; Pesticides & Toxicity; Nutrient Loading & Eutrophication; Disease & Animal Care; Labour; Local & Indigenous Communities; and So-ciety & Consumers. In addition, each chapter provides an overview of major trends, emerging investment opportu-nities, and links to external tools and resources.
newsletter - June 2013
Guide promoteS Global
reSource and market
SuStainability
the earth’s resources are insufficient to meet growing global demand.
© B
rent Stirton / G
etty Images
newsletter - June 2013
Investors are keenly aware of the boom in soft commodities, but not ev-eryone fully understands its complex environmental implications. Thanks to WWF and its unique expertise and understanding of the interaction be-tween markets and conservation, The 2050 Criteria sheds much light on the subject. The financial communi-ty will benefit from this timely, sci-ence-based overview of high-impact global commodity sectors. Further, by identifying key performance cri-teria for responsible practice, we now have a tangible framework to evalu-ate companies on the ground and to support the data-driven assessments of business value that sustainability creates.
At Credit Suisse, we believe that fi-nancial institutions should system-atically evaluate environmental and social risk in transactions, which in fact is becoming standard practice in the banking industry. We also believe that this process should be part of a broader commitment to long-term sustainability, including support for organisations such as the United Na-tions Global Compact and the United Nations Environment Programme Finance Initiative and membership in industry sustainability initiatives such as the Roundtable on Sustain-able Palm Oil.
Excerpt from The 2050 Criteria - Guide to Responsible Investment in Agricultural, Forest, and Seafood Commodities
Biod
iver
sity
Los
s &
Con
vers
ion
CATEGORIES OF IMPACT
Clim
ate
Chan
ge &
Air
Qual
ity
Soil
Eros
ion
/ Deg
rada
tion
Wat
er U
se
Pest
icid
es &
Tox
icity
Nutri
ent L
oadi
ng &
Eut
roph
icat
ion
Dise
ase
& A
nim
al C
are
Labo
r
Loca
l & In
dige
nous
Com
mun
ities
Soci
ety
& C
onsu
mer
s
Biodiversity Loss & Conversion
Climate Change & Air Quality
Soil Erosion / Degradation
Water Use
Pesticides & Toxicity
Nutrient Loading & Eutrophication
Disease & Animal Care
Labor
Local & Indigenous Communities
Society & Consumers
2050 CRITERIA OVERVIEWKEY PERFORMANCE CRITERIACATEGORIES OF IMPACT ENVIRONMENTAL & SOCIAL RISKS COMMODITIES PAGE
Wild Brood and Seed
Water Use
Water Discharge from Mills
Genetic Modification
Timber Rights
Soil Health, Compaction, & Erosion
Smallholders
Riparian Areas
Respiratory Risks to Laborers & Communities
Poor Working Conditions
POME Discharge
Overgrazing and Loss of Pasture Biodiversity
Nutrient Loading in Runoff
Nutrient and Waste Loading in Water
Loss of Pasture Biodiversity
Land Conversion
Irresponsible Forestry Practices & Habitat Conversion
Indirect Land Use Change
Importing Labor
Illegal, Unregulated and Unreported (IUU)
Illegal and Untraceable Products
Health & Safety Risks
Habitat Loss
Greenhouse Gas Emissions
Food Safety
Global Food Security
Food Insecurity
Food Displacement
Fishery Collapse
Fish/Shrimp Feed
Excessive Chemical & Antibiotic Use
Escaped Fish
Encroachment on MPAs
Ecosystem Services
Disease
Credit and Debt
Conflicts Over Shared Commons
Community Displacement
Child Labor and Debt Bondage
Cattle Feed
Bycatch
Benthic Impacts
Animal Health & Welfare
Air Quality
Agrochemical Use Impacting Reefs
Agrochemical Use
Animal Health and Welfare
BEEF 21
AQUACULTURE 15
DAIRY 33
COTTON 27
SOY 45
SUGAR 51
TIMBER, PULP, AND PAPER
57
WILD CAUGHTSEAFOOD
65
PALM OIL 39
BIOFUELS 73
OTHER TERRESTRIALCOMMODITIES
79
Price volatility and scarcity in soft commodity supply chains pose significant challenges for businesses and financiers. Navigating these risks and uncertainties in agricultural, forest, and fisheries sectors grows increasingly complex as environmental and social impacts are brought to light. WWF’s 2050 Criteria unravels this complexity, identifying the primary environmental and social risks for each commodity and pinpointing the Key Performance Criteria needed to smartly manage these issues and identify good practice. Throughout the publication, the Key Performance Criteria of utmost priority are identified by boldface type.
Area Based Management
Chemical Use
Ecosystem Functions
Food Security
Greenhouse Gas Emissions
Indirect Land Use
Labor Rights
Land Management System
Legal Production
Life Cycle GHG
Local & Indigenous Communities
Manure Management
Non-Target Species Impacts
Nutrient Management
Operational Health & Safety
Pest Management
Priority Areas Protection
Soil Management
Sustainable Feed
Transparency and Traceability
Water ManagementDesign by TRUTHstudio© World Wildlife Fund
KPC_Overview_A4_sign_04.pdf 1 10/17/12 12:34 PM
expert opinion
The 2050 Criteria - Guide to Responsible Investment in Agricultural, Forest, and Seafood Commodities
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John TobinManaging Director, Global Head of Sustainability Affairs, Credit Suisse
newsletter - June 2013
policy Support For ShiFt towardS a Green economy china GoeS beyond Gdp aS a meaSure: Our first newsletter in November 2012 focused on the Natural Capital Declaration, which is a pledge by financial institutions and other stakeholders to work towards integrating natural capital considerations into their products and services, and to support the requirement for public spending and procurement to report and eventually account for the use of natural capital. Last year, the China Centre for Internal Economic Exchange (CCIEE) launched a ‘Beyond GDP Indicators System’ in partnership with WWF. The indicator system aims to help evaluate local governments’ achievement of green development, a goal of the 12th Five-Year Plan, and to facilitate the development of China’s green economic policies.
Another important policy development in China was the recent inclusion of the concept of ‘ecological civilisation’ in the list of five pillars that are used to measure China’s overall development. The other four pillars are Economic, Political, Cultural and Social.
Other countries that are taking a beyond GDP approach to their national accounting include Botswana, Colombia, Costa Rica, Madagascar, and the Philippines.
we welcome your FeedbackPlease send your feedback, comments or suggestions to [email protected] more information on WWF-SA’s Sustainable Business Work go to http://www.wwf.org.za/what_we_do/sustainable_business/
WWF-SA is a registered Non-Profit Organisation, number 003-226 NPO. © 1986 panda symbol and ® “WWF” Registered Trademark of WWF-World Wide Fund For Nature (formerly World Wildlife Fund), Boundary Terraces, Bridge House, 1st Floor, Mariendahl Lane, Newlands 7700, P O Box 23273, Claremont 7735, Tel: +27 21 657 6600, Fax: 086 535 9433, www.wwf.org.za
SuStainable Finance South aFricawwF.orG.Za
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artmut Jungius / W
WF-C
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