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Rio+20 agreement encourages companies to report on sustainability

Posted on 25 June 2012

The agreement negotiated at the Rio+20 Earth Summit encourages public
and listed companies to include sustainability issues within their
annual reports, but stops short of actually requiring them to do so.

Over 100 heads of state are meeting today until Friday in Rio de
Janeiro to agree on a path that the world should take to maximise the
chance of sustainable environmental management and the delivery of one
billion people from poverty.

Britain is represented by the deputy prime minister, Nick Clegg,
arriving today, and the environment secretary, Caroline Spelman, who has
been there for four days.

Yesterday's outcome document from the United Nations Conference on Sustainable Development,
arrived at in pre-summit meetings, was called by Rio+20’s
secretary-general, Sha Zukang, a “compromise text” necessary to placate
competing interests.

It has been condemned as inadequate by non-governmental observers:
Friends of the Earth's director of policy and campaigns, Craig Bennett,
called the final text “a damp squib".

Firstly, it merely reaffirms many previous commitments that have not
yet been kept. Secondly, it calls for "urgent action" on unsustainable
production and consumption, without any detail or timescale on achieving
this.

Negotiators and observers blamed developed countries for failing to
offer financial support to developing countries for the latter's refusal
to make further concessions.

A call by activists for negotiators to agree to phase out subsidies for fossil fuel exploitation was all but ignored.

Yet “we think the text contains a lot of action," said Sha Zukang,
“and if this action is implemented, and if follow-up measures are taken,
it will indeed make a tremendous difference in generating positive
global change.”

Company reporting on sustainability

Caroline Spelman said that Britain can be proud that the agreement
includes a call from all nations for businesses to adopt ways of
reporting on their sustainability performance, and credited British
company Aviva, founder of the Corporate Sustainability Reporting
Coalition (CSRC), for pushing this forward on the agenda.

"We said we wanted a drive to get more businesses reporting on their
sustainability performance, and recognition from countries of the
importance of measuring natural and social capital as signs of progress
alongside GDP. All of these things have been achieved at Rio," she wrote
in her online diary.

Yet here, too, the agreement fall short of fulfilling what was asked for by the CSRC at Rio+20,
namely a commitment by UN member states to develop regulations that
would require all listed and large private companies to address
sustainability issues within their annual reports. Any which opted not
to do so would be required to explain their reasons to their
stakeholders.

The outcome document (paragraph 47), however, only talks about
encouraging “companies, where appropriate, especially publicly listed
and large companies, to consider integrating sustainability information
into their reporting cycle". In addition, “We encourage industry,
interested governments as well as relevant stakeholders… as
appropriate, to develop models for best practice and facilitate action
for the integration of sustainability reporting". This falls well short
of mandating the practice.

As well as the outcome text, there have been over 400 voluntary commitments for sustainable development by Member States in the lead-up to the high-level meeting.

Sustainable Development Goals

One next step is to establish Sustainable Development Goals (SDGs), but the agreement lacks substance on what these might be.

Mrs Spelman said: ”Not everything we hoped for has been agreed and
there is more to do to turn the words into actions,” but agreement on
Sustainable Development Goals will "elevate sustainability to the top of
the agenda.

"Starting in September, a group set up by the United Nations General
Assembly will begin work to turn the agreement into actual goals," she
continued. "We would have liked to get some agreement on the themes of
food, water and energy, but what we do have is a clear timeline to get
work underway on the goals."

Denmark holds the EU presidency, and Danish environment minister Ida
Auken said she was disappointed with the document. "The EU would have
liked to see a much more concrete and ambitious outcome, so in that
respect I'm not happy with it".

The US lead negotiator Todd Stern described it as "a good step
forward", and said he did not expect heads of state and government to
re-open discussions; nor does Brazil’s leadership.

Green accounting

Spelman added that the ideas of measuring natural capital and social
capital, also pioneered partly in Britain, "have been recognised as an
important way of moving beyond assessing progress solely through GDP.
This will help countries to grow and develop in a way that improves
their economy, protects their natural environment and improves the lives
of their people."

There are many examples already of how "green accounting" is helping to protect environments and livelihoods.

Discussions over the next few days will be around how to mainstream
these pioneering concepts, such as debt-for-nature swaps, which allow
developing countries to exchange debt for commitments to conserve local
ecosystems, and payment-for-ecosystem-services schemes, which compensate
communities for conserving resources like rainforests that others
depend on.

As it has been for the last 20 years since the first Earth Summit, it
looks as though it will continue to be the work of dedicated
individuals and groups around the world, rather than that of world
leaders, that will contribute the most to sustainable development.