THE FINANCIAL SECTOR: A LINCHPIN TO ADVANCE SUSTAINABLE DEVELOPMENT (cont.)
These types of pledges are increasingly adopted at industry- level to stimulate sector peers to take action as well. A coalition of over 554 global companies and investors, with combined revenue of US$7.8 trillion, called We Mean Business, are committed to decarbonising their businesses through efforts including purchasing electricity from renewable sources, reducing short-lived climate pollutants, or investing in low carbon assets.[3]
The Consumer Goods Forum–an association of over 400 large retailers, manufacturers, and service providers across 70 countries with combined sales of around US$3 trillion– recommends that its members adopt a policy of “zero net deforestation” in their supply chains by 2020.[4] As a result, Wilmar, Cargill, Golden Agri Resources, Nestlé, Unilever, Mars and other companies have made commitments to deforestation-free sourcing, essentially decoupling production of vegetable oil, beef, or other commodities from forest damage. This effort got a boost during the 2014 UN Climate Summit when 130 governments, companies, civil society, and indigenous peoples’ organisations signed New York Declaration on Forests. The signatories pledge to cut the loss of forests in half by 2020 and to end forest loss completely by 2030.[5] So far, 243 companies have pledged their commitments to reduce deforestation and ecosystem destruction when producing or procuring agricultural commodities.[6]
Global water challenges, and associated risks to business growth and viability, also invite private sector activism. The Water Stewardship initiative of the CEO Water Mandate has attracted over 140 leading companies from a wide range of industries in 40 countries to adopt water sustainability practices that are responsible to the environment and the society. These different initiatives are significantly accelerating corporate commitments to advance towards environmental sustainability, which can minimise material risks in the present and enhance a company’s financial stability and growth over the future.
Definitions
Zero net deforestation
Zero-net deforestation pledge allows companies to offset the impacts of their practices on forests by replanting the deforested areas that can largely maintain forest ‘quantity, quality and carbon density’ in order to have an overall zero-net effect on deforestation
Zero deforestation pledge commits companies to completely remove deforestation from their supply chains
Decoupling
The concept of decoupling can be applied to sustainable development in two dimensions:
Impact decoupling means maintaining economic output while reducing the negative environmental impact of any economic activities that are undertaken
Resource decoupling means reducing the rate of use of resources per unit of economic activity. Absolute reductions of resource use are a consequence of decoupling when the growth rate of resource productivity exceeds the growth rate of the economy24
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