The big bottom-up natural challenge

A video of the Maui creation myth set off the Valuing Nature conference last week. That was hardly the way to get feet-on-the-ground business to value natural capital seriously.

Then at the tea break conference-goers were shooed out to coffee by a deafeningly thumping soundtrack of an American-accented song about “nature”: a subliminal injunction, it seemed, to hammer nature, not value it.

The actual sessions were not so childlike. International speakers brought challenging ideas and a reminder that this country is slipping off the clean-green pace, not least in climate change policy and (in)action.

But, as David Shearer is finding in a different context, subliminal messages can distract minds and undermine those trying to do the job to the point where it can’t be done and usually represent personal preoccupations, not community, national, global or humankind’s interest. Many mythologise, and so marginalise, nature. Many hammer it. Reason is the casualty.

To a business, fixated on the next quarterly report, or to a family bringing up kids and never quite enough to go round, mythologising greens — and, by unsought association, conservative conservators — can sound irrelevant, a nuisance, smug or a threat.

The key to engaging people is not to invoke myth or admonish them about a “problem”, especially not an apocalyptic problem. People are more likely to be engaged by invitation to an opportunity.

Which is what the Valuing Nature conference mostly did, away from the event managers’ gaffes.

The international speakers brought with them three real-world messages: the value of maintaining natural capital in enabling and underpinning economic activity and development; business’s need (and opportunity) to take this on board for their own long-term viability; and the superior power of bottom-up initiatives, local and private, over top-down ones.

The underlying conceptual theme was one of stocks versus flows. Governments obsess about GDP growth, which is the flow of goods and services (so do most voters). They worry less, or not at all, about whether the capital stocks from which the goods and services are derived are rising or falling — that is whether the ecosystems, on which all life depends, are being eroded.

Yet if ecosystems erode too far — looming as a real prospect — at some point they will not support more GDP growth. Another 2 billion people by 2060 (unless wars, famines and diseases intervene) and likely limits to human engineers’ ability to substitute for ecosystem services make this no longer just a green statement but increasingly a business one.

One dimension is the United Nations-based TEEB, which stands for The Economics of Ecosystems and Biodiversity and describes itself as “a global initiative focused on drawing attention to the economic benefits of biodiversity”. It highlights “the growing cost of biodiversity loss and ecosystem degradation” which it put at $US4.7 trillion a year in a report in April.

It now has a business coalition, backed by a range of international business organisations and a large and growing number of big global firms. An example TEEB economist Pavan Sukhdev gave the conference was clothing and footwear giant PUMA, which in 2011 issued an environmental profit and loss statement.

Natural accounting is also a target of the International Integrated Reporting Council (IIRC), which describes itself as “a global coalition of regulators, investors, companies, standards setters, the accounting profession and non-government organisations”. Former Securities Commission chair Jane Diplock is on the board.

The IIRC has developed a framework for companies to fully account for their use and modification of six types of capital: financial, manufactured, intellectual, human, social-and-relationship and natural. It has support from all international standards setters. The South African Stock Exchange has picked it up — Mervyn King, its originator, is a South African business academic. King said here in June that 97 “iconic” global companies had signed up. It is an impressive list.

The framework is designed to show how sustainable a firm will be over time in addition to the financial profit it made in the last quarter — sustainable not just in the environmental sense, though that is a big element, but in the business sense.

That widening of the word “sustainability” from an environmental concept to an economic one takes the myth out of the environment debate and also makes it clear that businesses cannot hammer nature indefinitely if they are to stay in business. King says: “Reporting does influence behaviour.” So, unpredictably, do the social media when some people don’t like what a company is doing. Hammering nature can now hammer brands.

What about “clean-green”, “100 per cent pure” New Zealand business? There are signs of movement but the evidence at the conference suggested they are far behind the global icons, cruising on the slogans. As the government is.