2Sustain

Last month, the athletic apparel company PUMA announced its first “environmental profit and loss statement.” PUMA’s CEO Jochen Zeitz explained the decision by insisting that, in order to remain profitable, companies must integrate into their business models the true costs of relying on nature.

PUMA’s move is an example of “corporate ecosystem valuation,” the process of businesses making strategic decisions by assigning a financial price to both ecosystem degradation and the services that ecosystems provide. For example, clean water and forests provide services like erosion control, CO2 absorption, and food.

But, why would companies consider adding a value to resources like water or timber? After all, these are not line items an analyst typically finds on a balance sheet. Data from the World Business Council for Sustainable Development (WBCSD) tells part of the story: (more…)

Governments, international agencies and corporations are all beginning to fully recognize what environmentalists have known for quite some time: Climate change is going to have a dramatic effect on water resources.

A report released last week by US Secretary of the Interior Ken Salazar gives us some insight into how significant these effects may be.

The report to Congress, prepared by Interior’s Bureau of Reclamation, is the first comprehensive assessment of how climate change could impact water operations, hydropower, flood control, and fish and wildlife in eight major Reclamation river basins across the western US.

The results indicate that these major river basins, including the Colorado, Rio Grande and Missouri river basins, are all likely to be affected by projected changes in temperature and precipitation. According to the report, the timing and quantity of stream flows in these western basins could impact water available to farms and cities, hydropower generation, fish and wildlife, and other uses such as recreation.

More specifically, the report projects: (more…)

New research from global consultancy Mercer carries a stern warning.

According to the report, Climate Change Scenarios – Implications for Strategic Asset Allocation, continued delay in climate change policy action and lack of international coordination could cost institutional investors trillions of dollars over the coming decades.

Already, we have seen how climate-related natural disasters (drought in Russia, floods in Australia, etc.) can have a devastating impact on regional economies. This new study takes a broader approach and analyzes the potential financial impacts of climate change on investors’ portfolios, identified through a series of four climate change scenarios playing out over the next twenty years. For example, the research found that by 2030:

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Water security has made its way onto the corporate agenda.

Virtually all (96 percent) of companies in a recent survey were able to identify whether or not they are exposed to water risk, and more than half of those that reported risks classify them as current or near-term (1-5 years).

The survey, prepared by Environmental Resource Management (ERM) and sponsored by CDP Water Disclosure, polled more than 100 of the world’s largest companies asking for information on their water use and other water-related business issues. The results show that water is already impacting business operations. For instance: (more…)

The newly updated Climate Counts scorecard, released earlier this month, reveals that over the past year businesses have made some improvements with regard to sustainability issues. However, huge differences remain between sectors, and it appears that, in general terms, industry as a whole is failing to meet the climate challenge. Taken altogether, Climate Counts Executive Director Wood Turner describes the results as “disappointing.”

Here are a few of the details: (more…)