Sustainable Development from a Business Perspective

Conferance on Sustainable Development and Indicators Oslo, 22 June, 2004

Odd S. Gullberg

Chief Operating Officer

Dedicated to making a difference

Work on

Sustainable Development from a Business Perspective

WBCSD

¾ 175 international companies united by a shared commitment to sustainable development

¾ Members from

¾

35 countries

¾ 20 major business sectors

¾ 48 national and regional BCSDs (NHO is the Norwegian

representative)

Global presence of the regional network

BCSD Gulf of Mexico US BCSD

CentraRSE Guatemala

BCSD Argentina BCSD Vénézuela BCSD Colombia

BCSD Croatia BCSD Czech Rep

BCSD Salvador BCSD Honduras

BCSD Malaysia

PBE Philippines

BCSD South Africa EFZ Zimbabwe

BCSD Thailand CII India

Vernadsky Foundation Russia

APEQUE Algeria

BCSD Brazil

Entorno Spain FFA Spain

EPE France BCSD Austria BCSD UK

CGLI USA/Canada

WASIG O.Australia

BCA Australia

BCSD N. Zeland BCSD Taiwan AEEC

Egypt

Péru 2021 The Excel Partnership Canada

Keidanren Japan

CoRE BCSD India NHO-Norway

BCSD Ecuador

BCSD Mongolia

BCSD Paraguay

BCSD Sri Lanka

BCSD Korea BCSD Mexico

BCSD Bolivia

FEMA Mozambique

BEC Hong Kong Kazakhstan

BFSD AED Costa Rica

CEDIS Panama

BCSD Poland

BCSD Nigeria BCSD Portugal

BCSD China

Sparkling facts

Revenue: USD 4,000 billion

This compares with the GDPs of the three largest economies in the world (2002):

USA 10,400

Japan 4,000

Germany 2,000

Employees: 11.6 millions

Customers: 2.5 billion people buy a product or a service

from a WBCSD member every day

Norwegian Members

¾ Norsk Hydro

¾ Statoil

¾ Det norske Veritas

¾ Storebrand

¾ Norske Skog

¾ Leif Höeg

A member driven Organization

¾ « Business is good for sustainable development, and sustainable development is good for business »

¾ Members are actively participating

9 Seconded business people to the work programs 9 Co-charing the programs

9 Contributing to the working groups

¾ Management with business experience

Policy development and best practice

Council projects

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Reporting

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Sector projects

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Work program: reflecting the business case

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Capacity building

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Cross-cutting themes

The Business

Case

From Stockholm to Johannesburg

¾ 1972, Stockholm: Environment

¾ 1992, Rio, UNCED : UN Conference on the Environment and Development

¾ 2002, Johannesburg, WSSD: World Summit on Sustainable Development

Norms and principles

Implementation of sustainable

development

A World under stress

¾ Doha round on trade rules

¾ No consensus on framework to address climate change

¾ MDGs too ambitious?

¾ Approaching the physical limitations of the planet 9 Carbon levels

9 Growing population

9 Consumption rate of natural resources

A tripartite world

¾ Changing role of the partners

9 Dominance of governments diminished 9 Growing influence of business

9 Civil society maturing

Two sustainable development agendas

Public policy agenda

¾ Driven from outside business

¾ Framework conditions and policies

¾ Growing complexity of issues

Business agenda

¾ The business case for

sustainable development

Public policy agenda

¾ Globalization and global governance

¾ Trade, development and poverty

¾ Sustainable Production and Consumption

¾ Societal services (Water, Energy, Healthcare)

¾ Innovation and Technology

¾ Health of the ecosystems

¾ Accountability and trust

Globalization and Global Governance

¾ Strong tension between parts of the world

¾ ?s for the global multilateral system 9 WTO

9 Kyoto Protocol

¾ Bilateral/regional solutions

Trade, Development and Poverty

¾ The opening of the markets has created wealth, but it is unevenly distributed

¾ Benefits of globalization must come to the poor if we want to maintain open global markets

¾ Access to

¾ Markets

¾ Healthcare

¾ Technology

¾ Funding

Sustainable Production and Consumption

¾ Business has done much to improve effiency

¾ To deal with Sustainable Production has become a natural part for many businesses

¾ Sustainable consumption is more difficult

9 Who decides on behalf of the consumer?

Societal Services

¾ Services like water, energy and healthcare are needed to make society work

¾ Business role and contribution is neceaasry 9 Technology and systems

9 Management 9 Funding

¾ Pricing is complicated

¾ A world of

9 Physical limitations 9 Growing population

9 Demands for increasing living standards and poverty alleviation

¾ Innovation and techlology are the only real counterforce

¾ But theconditions for business are unclear, and

¾ The debate often becomes emotional and unrealistic

Innovation and Technology

Health of Ecosystems

¾ Major uncertainties, limited knowledge

¾ Climate is a special dilemma

¾ Growing interest for biodiversity conservation

¾ New alliances between business

and conservation movement

Accountability and Trust

Demands are growing – there is no place to hide

¾ New reporting guidelines

9 GRI and Others 9 USA, France, UK

¾ Many codes of conduct

9 OECD, Global Compact

¾ Socially Responsible Investments (SRI)

¾ Sustainability indexes (DJSI)

¾ Not only for business, also Governments and NGOs

Business Assets

The policy agenda affects the value of business

9 Intangibles are increasingly important

9 Reputation and brand 9 Perceived risks

9 Ability for constructive dialogue and partnerships with stakeholders

9 Ability to change and adapt

The business case for SD

¾ Risk reduction

¾ Operational efficiency & effectiveness

¾ Recruitment and retention of talent

¾ Enhancement of value creation

¾ License to operate and innovate

¾ Protecting the resource base of raw materials

Parnterships

¾ A sustainable future requires parnerships between governments, business and civil society

¾ Parnerships are time and resource consuming. Important to consider goal

¾ Voulontary actions are contributing strongly

¾ Need legislative framework

¾ « The perfect solution » takes long time

Looking ahead

¾ Shared responsibility

9 Companies: Rescource efiiciency, innovation 9 Governments: Provide framework

9 Financial markets: Hold scorecard, asses risk and allocate capital

¾ Where is the business border line for responsibility?

¾ Business leadership - walk the talk

¾ Sustainable development is a long term view

Dedicated to making a difference

¾ The state of the planet

9 Environment inside and outside the fence 9 Life cycle responsibility

¾ Alleviate Poverty

9 Political, Economic and Social Instability

¾ Codes of Conduct

9 Credibility

9 Transparency, CSR

¾ Traffic rules and Framework Conditions

Business cannot succeed in a society that fails

What do we do?

¾ Business leadership

¾ Policy development

sustainable development.

¾ Best practice

¾ Global outreach

WBCSD membership (by region)

Japan &

Korea 13%

Oceania 3%

Africa 1%

Central and Eastern

Europe 2%

Asia (excl. Japan)

2%

Latin America

6% North

America 24%

Western Europe 49%

WBCSD membership (by sector)

World Primary Energy Demand

0 1,000 2,000 3,000 4,000 5,000 6,000

1970 1980 1990 2000 2010 2020 2030

Mtoe

Oil

Natural gas

Coal

Nuclear power

Hydro power Non-hydro renewable

+ 66% 2000 2030

Source: IEA

0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000

2000 2010 2020 2030 2040 2050

megatonnes

Water

2-3 wheelers LDVs

Freight trucks Air

Buses

Freight + Pass rail

Transport-Related CO₂emissions (Well to Wheels Basis) by Mode

A very Negative Trend in Transportation

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000

1999 2002 2005 2008 2011 2014 2017 2020 2023 2026 2029

GW

Existing capacity New capacity

World Electricity Generation Capacity

Source: IEA

4800 GW

2030