2014 Caux Dialogue on Land Degradation

The latest edition of the Caux Dialogue on “Land and Security” took place last week bringing together leading experts and practitioners from around the world to discuss the geopolitics of land degradation, roadblocks to progress and also the numerous success stories of restored lands and retreating deserts. The focus this year was on the scaling up of solutions.

A long History of Land Degradation

easterislandheads1Land degradation is not a new problem. Great civilizations disappeared because they damaged the soil that sustained them. The most famous story is probably that of the Easter Island settlers from Polynesia who raised 887 giant Moai statues weighing up to 80 tons! but sealed their fate by deforesting the island.

1935 Dust Storm in Texas

1935 Dust Storm in Texas

More recent examples of the devastating consequences of land degradation include the dust bowls of the 1930s in the American Midwest. A combination of plowing the prairies for agriculture and prolonged droughts caused massive dust storms on the Great Plains from Texas to Canada. The erosion of the topsoil from 30 million hectares of farmland destroyed the agricultural industry in Texas, Kansas, Oklahoma and Colorado, made 500,000 people homeless and caused the largest migration in American history. Some 3.5 million people moved out of the Plains states during that period.

A Convention to Combat Desertification

Cracked-soil-466In the 1970s and 80s, the African drylands suffered from severe droughts that caused repeated crop failures and mass starvation. African nations pressed the global community to take action ahead of the 1992 Rio Earth Summit, which led to the Convention to Combat Desertification that came out of the Rio Conference along with the conventions on climate change and biodiversity. But while there is a growing awareness about the climate and biodiversity crises, land degradation receives little attention. This is surprising because land plays an important role for carbon sequestration and its degradation directly impacts biodiversity. We will not be able to resolve the climate and biodiversity crises unless we restore degraded lands.

A Global Challenge

Today 1.5 billion people in 168 countries are impacted by land degradation. Desertification is advancing around the world. But land degradation is not a fatality, it is the result of human activity:

1) Overgrazing (35%) – especially in Africa

2) Deforestation (30%) – especially in Asia and South America

3) Poor agricultural practices (28%) – particularly in North America

Overgrazing, deforestation and poor farming practices expose the soil to water and wind erosion, which leads to desertification. Meanwhile, mass irrigation practices cause the salinization of soils that can no longer sustain vegetation. In turn, the lack of soil cover increases erosion and disrupts the water cycle.

zs-5We know that healthy soils are critical for food security and that soil regeneration is a slow process. It takes 100 years on average to generate a millimeter of soil. And yet, we continue to mismanage soils and degrade lands in every region of the world and lose 12 million hectares (or 1%) of the planet’s fertile soils every year as a result.

Impact of Climate Change

Climate change exacerbates the problem. According to the UK Meteorological office, climate change contributed to the 2011 East African drought that killed 100,000 and pushed millions into starvation. This is why Monique Barbut, the new Executive Secretary of the Convention to Combat Desertification, has vowed to work closely with Christiana Figueres from the Climate Change Convention. More cooperation is expected as we approach the Lima climate change conference in December and the awaited Paris climate talks in 2015.

Land Degradation and Security

_70816628_syria_rtrWhile the Syrian crisis has been receiving a lot of press, few know that since 2006 the country has been suffering from one of the worst droughts in its history. The situation was aggravated by the misguided policies of the Assad regime that subsidized water-intensive crops (wheat and cotton) and the use of mass irrigation technologies. This resulted in disastrous crop failures with the loss of livestock and livelihoods that forced 1.5 million to migrate to cities in order to survive. This was a major factor of instability and social unrest that contributed to the Syrian crisis.

The importance of climate and environmental factors, including water and food scarcity, are often underestimated when analyzing the causes of tensions and conflicts. With the growing impacts from climate change, droughts and land degradation on water and food availability, we will have to reconsider their importance as a threat multiplier and as a significant factor in conflicts around the world.

Solutions are Available

And yet, every day innovative solutions are being deployed around the world and degraded lands are being restored – often through low-tech cost-effective solutions. Last year I reported on how Tony Rinaudo was bringing back life to trees and vegetation with a pocket-knife and how Allan Savory uses cattle to restore degraded lands. 2011 Caux participant Yacoubé Sawadogo, also known as the the “man who stopped the desert”, has re-greened areas of Northern Burkina Faso using such methods where international institutions and scientists had failed to make a difference:

This year again numerous solutions were discussed – from permaculture to water catchment with examples from coming Somalia to Sudan. But our first priority should be to stop land degradation from occurring in the first place. Avoiding damage is much easier, faster and cheaper then restoration. We urgently need to stop the misguided policies that lead to deforestation, biofuels that compete with food and carry an unfavorable footprint, and the wasteful mass-irrigation techniques for crops that are not suited for local conditions.

Massive Scaling up of Solutions


2014 Caux Panel on “Scaling Up the Solutions”

Dialogue convener Martin Frick and Ian Johnson from the Club of Rome agree that: “if land degradation and desertification are to be slowed down and reversed, we need to urgently and massively scale up the solutions”. A major obstacle remains the lack of media coverage and low public interest. Policy makers and political leaders do not fully comprehend the scale of the problem, its implications in terms of security and the urgent need for restoration. “Educating policy makers, the media and the wider public” is a top priority for Jakob Rhyner, Vice-Rector of the United Nations University and while one can find comfort in knowing that  organizations like Ramsar (Convention on Wetlands), the International Union for the Conservation of Nature, the International Migration Organization, the UN Environmental Programme, IUCN and Green Cross International are working collaboratively to raise the profile of land degradation as a major threat to security, the political will to provide serious support for the large scale deployment of solutions is still missing. Even more worrying is the continuation of policies and practices that result in land degradation around the world and the powerful influence of vested interests that work to maintain the status quo. The Caux Dialogue continues to be a leading platform for constructive engagement on this issue. Let’s hope the call will be heard ahead of the Lima climate talks this December.



New Energy Law Announced in France

Segolene-Royal-invente-la-consultation-participative-pour-nommer-son-projet-de-loi-sur-la-transition-energetiqueLast week French environment and energy minister, Ségolène Royal, presented her energy law proposal to  put France on the sustainable low-carbon energy path ahead of the 2015 Paris climate talks and fulfill one of the key commitments of Francois Hollande for his presidency. The main targets of the package are to:

- reduce fossil fuel consumption by 30% by 2030 (versus 2012)

- increasing the share of renewables in the energy mix to 32% (versus 13.7% in 2012)

- reduce the share of nuclear for electricity from 75% to 50% by 2025

- reduce waste to landfills by 50% by 2025.

475px-DPE.svg80 measures are proposed to put France on the green path with energy efficiency set to  play a major role. So far, so good. Energy efficiency is the best way to reduce emissions, lower costs and eliminate waste in general. Improving energy efficiency will be mandatory during building retrofits and supported by a 30% tax credit and interest free loans for up to €100,000. Buildings are responsible for 43% of the total energy used in France, about a quarter of CO2 emissions and 30% of household budgets.

015200BE04272336-c1-photo-peugeot-ion-une-electrique-au-quotidien-solution-d-avenir-ou-solution-galereThe electrification of automobiles will receive a major boost with investments to install 7 million charging stations across the country by 2030 and subsidies of up to €10,000 for the purchase of an electric car when exchanging an old diesel one. Half the vehicles purchased by the State and State-owned enterprises will have to be electric. With 19 million diesel vehicles (61% of the 38 million vehicles in France in 2013) air pollution is a major problem in cities. During the pollution peaks in March, authorities made public transport free of charge in some 30 French cities including Paris, Lyon, Grenoble and even smaller and remote locations like Boulogne-sur-Mer. The electrification of vehicles in cities, especially taxis and postal vehicles will be most welcome.

Reducing waste to landfills by 50% by 2025 through resource recovery (recycling, circular economy, etc.) to reduce energy needs and costs while reducing environmental consequences of waste. Commendable objective but are the French ready for this? In recent years we have seen a surprising level of resistance by households to measures that would help reduce household waste. There seems to be a determination for many to oppose any form of recycling. Perhaps education efforts would be worthwhile. The need for collectivities to compost their organic waste is proposed. Organic waste typically represents one-third of the waste going to landfills and their incineration is energy intensive (expensive) given that they are mostly water (80%).


Nicolas Hulot, Ambassadeur du Président pour la Planète (Photo Farouk Batiche. AFP)

Reactions to the proposal have generally been positive with the expectation that 500,000 households will be retrofitted by 2017 with significant savings on energy costs and the creation of some 100,000 jobs. The electrification of transport is expected to position  France for the future and reduce pollution from diesel vehicles. Questions have been raised however on the technicalities of financing the deployment of renewable energy and why other measures to mobility have not been proposed. Improving public transport, car sharing, biking and measures to improve fuel efficiency are  lacking.

Of course more could be done. There are many low-hanging fruits that could further help France reduce energy waste and costs and thereby improve competitiveness (and this is urgently needed). The priority remains energy efficiency and conservation. One suggestion to Ségolène Royal would be to make sure that energy efficiency measures implemented accomplish their stated objectives before paying out any tax credits. One example is the window retrofit scheme where the credit is provided as soon as windows have been replaced by ones that fulfill the new energy efficiency requirements but without making sure that they have been properly installed. As a result of poor craftsmanship many retrofits perform below expectation and the expected energy savings never materialize. Such measures are as good as throwing money out the window… but are unfortunately commonplace. More on this soon.

Celebrating The World Day to Combat Desertification


UN picture

In 1995, June 17 has been proclaimed the “World Day to Combat Desertification and Drought”. The problem of land degradation is not new. In the 1970s and 80s, African drylands suffered from severe droughts that caused repeated crop failures. This situation  led to a Global Action Plan to Combat Desertification and for a Desertification Convention that would come out of the Rio 1992 process. Of the three Rio Conventions (Climate Change, Biodiversity and Desertification), the UN Convention to Combat Desertification (UNCCD) is the one that receives the least attention and support. This is surprising because land degradation and desertification is one of the biggest challenges of our time. 1.5 billion people depend on degraded lands for their livelihoods and three-quarter of world’s poor are affected by land degradation which leads to tension and political instability. Soil also plays a key role in mitigating climate change while land degradation threatens biodiversity. And yet, few are aware of this.

June17To raise awareness about this problem and prepare the grounds for the “2014 Caux Dialogue on Land Security” that will take place in Caux from June 30 to July 4, a conference was organized at the Graduate Institute in Geneva on June 17 that brought together various experts for a solutions-oriented discussion around ways to combat desertification.

One key message came out: land degradation is not a fatality. It is mainly a result of human activity including overgrazing, poor farming techniques, deforestation and it is certainly exacerbated by climate change. The erosion of top soil is already having severe impacts around the word and is accelerating. It is estimated that arable land degradation is taking place at 30 to 35 times the historical rate while 13 million hectares of forests disappear annually.

But solutions exist. Reforestation and tree-regeneration can play a key role. Not only to reduce soil erosion but to help regulate the water cycle. Over 2 billion hectares can be reforested worldwide. Better water management is critical – rainwater harvesting, water conservation and drip irrigation can play an important role.


Overgrazing is a serious problem

Overgrazing must be addressed and sustainable farming practices must be implemented – one-third of the world’s farmland has been abandoned since 1960 because it has been degraded beyond use.

More on this in July! I will be one of the speakers in Caux. Full program, details and registration: click here.

For more on solutions to land degradation: click here.

Blue Future: Protecting Water for People and the Planet Forever – Book Review

BlueFuturePublished in late 2013, Blue Future is the latest in a series that includes Blue Gold (2002) and Blue Covenant (2007) by Canadian water-activist and former UN General Assembly President advisor (2008/09) Maude Barlow. For over two decades, Maude has been working to raise awareness about the global water crisis and was a  prominent leader in the campaign to recognize access to water and sanitation as a human right that led to its adoption by the United Nations General Assembly on July 28, 2010, with the acknowledgement that access to water and sanitation are essential to the realization of all human rights.

Deepening Crisis

Despite this victory for the water justice movement, the crisis is worsening. According to UN figures some 800 million people lack access to clean water and 2.5 billion people do not have access to a toilet. By 2025, it is expected that two-thirds of the world population will be living under water stressed conditions, a situation that is exacerbated by climate change, disruptions in the water cycle and increasingly devastating extreme weather events.

In “Blue Future” Maude Barlow provides a comprehensive account of the global water situation and the way forward if we are to avert a global water catastrophe with mass starvation, large scale migration and escalating tensions and conflicts over access to water resources. Her proposed solution path is based on four pillars:

1) The implementation and fulfillment of the Human Right to Water and Sanitation represents a fundamental obligation for governments across the world to fulfill. This is not a question of charity or CSR.

2) Water resources must be protect, conserved and managed as a “common” that belongs to everyone and for the benefit of all – including future generations.

3) Water is an essential element to allow life on earth and biodiversity to flourish and is essential to ensure the health and resilience of the ecosystems. Our failure to properly manage watersheds and water resources undermines the prospects for human development and progress. Economic development policies must recognize these fundamental laws of nature.

4) Increased water stress can increase tensions, disputes and conflicts over access to scarce water resources. But they can also become a source of cooperation as communities search for solutions for sustainable ways of producing energy and food.

A Crisis of Poor Water Management

Blue Future provides an urgent call for action to address the crisis of poor water management around the world. Modern agriculture is a case in point: it is responsible for  70% to 90% of global water withdrawals for mass-irrigation that are siphoning aquifers, rivers and lakes. Water “mining” is lowering water tables and drying up rivers around the world. The drying up of the American Ogallala  aquifer would destroy $20 billion worth of annual agricultural revenue and turn the region into a giant desert. Withdrawals from rivers by large-scale farming operations reduce water flows to the point that some of the world’s largest watercourses like the Yellow River (China), the Colorado and Rio Grande (USA), or the Murray and Darling Rivers (Australia) no longer reach the sea.

Water Energy-Nexus

The book also provides an fascinating account of the water-energy nexus and the growing impact of our energy policies on water resources, including the consequences of dams for electricity production, the pollution of water from coal powered electricity production, the impact of biofuels, tar sands, fracking, nuclear energy but also from renewable energy – namely large scale solar thermal plants that use water for cooling. By far the largest impacts are caused by coal power plants and biofuels. Ironically, some of the largest coal plants are located in regions that are on the frontline of the water crisis with China accounting for 50% of world production. Biofuels not only represent a threat to food security, they also carry an unfavorable carbon footprint versus fossil fuels and a massive water footprint. Instead of being a response to climate change, corn ethanol represents a threat multiplier that contributes to soil pollution and causes greater water scarcity.

Hope for the Future

Blue Future is ultimately a book of hope. The development of large-scale drip irrigation can reduce water needs by up to 90% and requires a fraction of the energy to operate. Ancient and highly effective solutions like rainwater harvesting can be deployed on a large scale to reduce pressure on aquifers and rivers and compares favorably to the modern practice of water mining. Local, organic and sustainable farming practices can reduce water requirements, improve food security and provide livelihoods. Most importantly Maude Barlow demonstrates that solutions are available. What is missing is the public awareness and the pressure on governments and authorities that will bring about the political will to necessary for their deployment. This story is far from over!

For more about Maude Barlow and her work see the Council for Canadians website.

Economists and the Mounting Cost of Natural Decline


We have been very slow in recognizing the true relationship between nature and the economy but economist Robert Costanza figured out that the value of the services that nature provides us (for free) are far greater then what we previously thought and even exceed the value of the global economy. In 1997, Costanza conservatively estimated that “ecosystem services” (clean water, clean air, pollination…) where worth far more then the global GDP. This realization helped dispel the myth that we need a strong economy to “afford” to protect the environment. In fact, it is the other way around. We depend on nature and so does the economy. Hence we should aim to enhance and improve the state of the natural world that sustains us.

Bees for pollination

Unfortunately, we are not moving in the right direction. Costanza just updated his 1997 study (see Global Environmental Change) and it turns out the total value of global ecosystem services fell by $20 trillion (14%) between 1997 and 2011 (from $US145 trillion to US$125 trillion a year). This compares with a 2011 global GDP of just $US75 trillion. “Nature is not just a pretty place. Nature is a big and important part of the real economy which adds to human well-being,” says Costanza. The drop was partly due to the loss of tropical forests, wetlands and coral reefs. Tropical forests declined by 642 million hectares between 1997 and 2011, while deserts had grown by 234 million hectares. (more on land degradation)

In Australia, where Robert Costanza is now based, ecosystem services were estimated to be worth around US$5 trillion ($5.4 trillion) a year, compared to GDP of around US$1.5 trillion.

We urgently need better measures of human progress to overcome the limitations of GDP and of the traditional Profit and Loss statement. Flawed indicators lead to dysfunctional and shortsighted decision-making that can undermine the natural capital we depend on. Think of the newspaper commentaries by J.P. Morgan Chase that economic activity surrounding the BP oil spill in the Gulf of Mexico outweighed its negative impacts, timber companies saying that forests have no value until they are cut down (Fletcher Challenge in British Columbia, Canada) ignoring the impacts on soil erosion, nutrient loss, fisheries, biodiversity, etc.

NY WaterEnvironmental degradation is mainly an unintended consequence of industry and commerce activities but it does not necessarily need to be so. There are compelling examples of innovative approaches where protecting natural environments and economic considerations have been reconciled. In New York, protecting the Catskills watersheds North of the City has helped avoid $6 to $8 billion in capital investment into chemical filtration and hundreds of millions in operating costs. It turns out that watershed protection was a far better investment then chemical water treatment. Similarly in Munich, it was cheaper to subsidize organic agriculture to keep the water clean then to invest in chemical filtration. The city provides 320 million liters per day thanks to natural soil filtration. Munich has the cheapest water in Europe and also one of the cleanest – it contains 10 times less nitrates then the European norms.

The Costanza study provides policy makers with powerful arguments to protect watersheds, forests by recognizing their benefits in a way that traditional economics tends to ignore. Given the large-scale environmental degradation (see Millennium Ecosystem Report), policy makers must encourage practices that help restore and enhance natural capital while condemning destructive activities. The clock is ticking.

The report was written by scientists and economists from the Australian National University, Wageningen University in The Netherlands, the University of Denver in the United States, the University of South Australia, the University of Pittsburgh in the United States, and the University of East Anglia in Britain.

Accountants, the Unexpected Heroes of Sustainability

John D. Rockefeller

John D. Rockefeller

Few are aware that business tycoon and philanthropist John D. Rockefeller, who became the richest person in recent history, started his career at 16 as an accountant. His diligence, uncommon ability to “see everything and forget nothing” and exceptional understanding of business financials allowed him to build his oil empire by making every major decision on the basis of precise to-the-penny financial calculations. “I charted my course by figures, nothing but figures” said John D. His success underscores the importance of accurate and reliable financial information for business leaders to make the right decisions.

Accounting Records, the Military and Sustainability  

Recognizing the importance of relevant and reliable financial information, former Undersecretary of Defense Sherri Goodman said that “You can’t manage what You don’t measure” and called for better monitoring of energy use and full tracking of the Department of Defense (DoD) carbon footprint with the aim to get the US military off oil by 2040. But where did this determination to move away from oil come from?

afghan convoy deloitteAn important element is the realization of the growing number of casualties in convoy operations that deliver fuel and water to the battlefield. The other  is economic and has to do with the way fuel costs were accounted for. Historically, fuel purchases were recorded at their purchase price, say 2 to 3 US$/gallon or 0.50 to 0.80 US$/liter. More recently however, the military started looking at the “fully burdened cost of fuel” – that includes the cost of buying, moving and protecting fuel until it is ready to be used in the battlefield. In remote areas these can be hundreds of times higher than the  purchase price. Figures of US$600/gallon (US$158/liter) and more have been reported.

With delivered fuel costs representing up to 36% of the total operations budget in Afghanistan, one can understand that energy efficiency has become a top priority for the military. A priority that lowers risk while generating dramatic cost savings. In one example, $95 million was invested in Iraq to insulate tents and temporary infrastructure reducing the need for cooling during daytime and heating at night. This measure saved US$1 billion in 2010 alone and removed the need for 11,000 fuel trucks. For more see Energy Security, America’s Best Defense.

The Need for Business Leadership

Yvo de Boer and Adam Koniuszewski

Yvo de Boer & Adam Koniuszewski

Business has a key role to play when it comes to sustainability. Of the largest 150 economic entities in the world, more then 59% are not countries but corporations and our most pressing sustainability challenges are largely caused by the way businesses operate and the impact of the products they sell. But today only business has the capacity and the ability to provide solutions to these problems. According to former Executive Secretary of the United Nations Framework Convention on Climate Change (UNFCCC) and KPMG Special Global Advisor on Climate Change and Sustainability Yvo de Boer, “The bulk of the solutions to environmental degradation and climate change must come from the private sector”.

And forward looking businesses, including some of the world’s largest corporations like IBM, Dupont, Walmart and world leading carpet-tile manufacturer Interface, have profitably embarked on the path towards sustainability. Interface Founder Ray Anderson said that: “The business case for sustainability is crystal clear and we are pressing ahead with our sustainability initiatives as fast and as far as we can because it has proved to be so good for business”. From the beginning of their sustainability journey, greenhouse gas emissions per unit of production are down 71% (since 1996) and profits are up. In Ray Anderson’s words:

-       “Costs are down, not up, dispelling that myth

-        Products are the best they have ever been because sustainable design has opened up a wellspring of innovation

-       People are galvanized around a shared higher purpose

-       And the goodwill of the marketplace is just amazing!”

Check out as Ray Anderson shares his passion for sustainability with George Stroumboulopoulos:

The Interface journey began by attacking waste and diverting the savings to invest in reducing carbon intensity while developing innovative business processes and products. Proper accounting records and monitoring played a central role. Accountant Buddy Hay led this part by implementing the EcoMetricsTM measurement system to track all the materials and energy inputs and all outgoing products, waste and pollution. He says that: “When implementing sustainability programs, you have to measure, understand and articulate the drivers of success. This requires the same rigor and thinking used in financial accounting but applied to natural resources and environmental impact”. Improved tracking allowed Interface to reduce waste to landfills per unit of production by 95% since 1996, and to avoid millions of dollars in costs. This helped fund additional sustainability efforts while rewarding shareholders with a 444% share price increase (5 year period ending Dec 31, 2013).

The Prince of Wales and Accounting for Sustainability 

HRH-A4SConcerned that our current measures of profit and GDP are providing the wrong signals to leaders in business and government, His Royal Highness The Prince of Wales has embarked on a global project with the accounting profession to help embed sustainability into the DNA of business organizations. Through his Accounting for Sustainability (A4S) Project, The Prince of Wales aims to demonstrate the business case for organizations to embed sustainability into their operations, develop the tools and build the capacity for action and create an enabling environment for change. The objective is “To help ensure that we are not battling to meet 21st century challenges with, at best, 20th century decision-making and reporting systems.” And by working with the A4S Accounting Bodies Network representing two million accountants around the world, The Prince’s Accounting for Sustainability Project is helping the profession to overcome the false choice between business success, environmental sustainability and the development of human happiness and wellbeing.

A4S Executive Chairman, Jessica Fries, knows the importance of involving Chief Financial Officers in the process of building sustainable business models: “The A4S CFO Leadership Network is the first grouping of its kind to bring together leading CFOs to explore their role in developing practical approaches to integrate environmental and social issues into financial decision making. There is a growing commercial imperative for businesses to take these factors into account if they are to future-proof their organisations; and there is now clear evidence that companies which address environmental and social issues in a strategic manner can deliver improved commercial returns.”

Another area of focus is how to account for natural and social capital. One organization that has really helped to highlight the importance of better accounting for natural capital is PUMA, the global sport-lifestyle company. Jochen Zeitz, the company’s then CEO, conceived the development of PUMA’s Environmental Profit and Loss account: “We understand the importance of healthy ecosystems to the future of our business. We have embarked on a journey to develop an enterprise and supply chain wide view of our environmental impacts in monetary terms, so that we could take these impacts into account strategically and embed them in our business decision making processes.” 

Valuing Natural Capital in the Montreal Region

David Suzuki and Adam Koniuszewski

David Suzuki and Adam Koniuszewski

Few realize that some of the greatest biodiversity hotspots in the Province of Quebec, are located in the Greater Montreal Region and are at risk from urban sprawl. The David Suzuki Foundation issued a report that valued the ecosystems services of a greenbelt that would protect 19% of the greater Montreal territory to be worth $4.3 billion per year! This work  helped convince the Communauté métropolitaine de Montréal to create this greenbelt as part of its new urban plan and the Government of Québec to invest $150 million for its protection.

“With the robust analysis and quantification that the accounting profession can provide, we can better understand the value of natural capital and the importance of preserving and enhancing ecosystems and natural habitats for the greater benefit of our communities” said Quebec Chief Scientist, Rémi Quirion.

Sustainability reporting and the risk of Greenwashing 

Despite the growing interest in CSR and sustainability reporting, the surge in revenues for accounting firms is not without risks. Professor of Social and Environmental Accounting at ESSEC Business School in Paris, Dr. Charles Cho, has published numerous studies on these topics. His particular field of interest is accounting and the public interest. Dr. Cho warns that “The recent proliferation of the ‘sustainability’ buzz, particularly within the business community, should certainly not become an avenue for opportunistic strategies and behaviors. We really need to pay close attention to what makes it substantive versus what is likely to become a mere symbolic representation—unfortunately, the latter happens more often than the former. A typical example is the production of stand-alone sustainability or CSR reports—recent mounting evidence has been provided that most of the information contained in these reports is generally biased, selective, trivial and sometimes misleading. Nevertheless, they provide a ‘legitimate’ shield, or a veil, on what is really happening inside organizations. Therefore, such reports should at least be monitored by a set of enforceable regulations, but it is far from being the case.

As for the role of the accounting profession—I remain skeptical on certain aspects such as the Big 4 public accounting firms seeking the next sustainability or CSR report assurance/audit engagement (this type of service is exponentially growing and one does not have to be Nobel Prize winner to understand that this is another great, highly profitable consulting opportunity for the Big 4). However, I am now more convinced that there are potential avenues for accountants, especially management accountants, to make a meaningful contribution to the sustainability agenda, notably by utilizing their technical skills to measure and report on real social and environmental impacts of organizations.”

Concordia University Professor, Dr Michel Magnan, FCPA, FCA, agrees that significant aspects of corporate sustainability reporting are symbolic rather than substantive. But in his view: “There has been progress in the quality of such disclosure over the years among European and North American firms. My research with colleague Denis Cormier shows that such reporting is relevant for market stakeholders (investors, analysts) when a firm exhibits good environmental performance (as measured by objective metrics) but comparability across firms and reliability of disclosed information are still major issues. One has to keep in mind that even for financial reporting, with strict regulatory enforcement and formal standard setting, there are still discussions as to comparability, relevance and reliability!

 Another major issue is the scope of sustainability reporting: i.e., when do we stop? For instance, when looking at greenhouse gas emissions for a dairy confectionary company such as Nestlé or Danone, how far do we go to capture the emissions underlying the production process? Do we include the methane emitted by the cows that produce the milk, or even the process by which they get fed (which is often highly mechanized and polluting as well)? In my view, this is the next stumbling block for sustainability reporting to take off.”

“With the evolution towards a `materiality-focused` sustainability reporting, not only are we currently auditing (internally and externally) to provide accurate and reliable information, but our sustainability practices are also allowing organizations to better understand the material issues that relate to the overall strategy of the organization. With early stage moves towards Integrated Reporting, we anticipate an increase in the need for these services that are currently being provided across Quebec, Canada and internationally.” 
– Luc Villeneuve, FCPA, FCA, President, Deloitte Quebec.

Accountants and Sustainability 

More then a century has passed since John D. Rockefeller retired from running his oil empire but the importance of robust and relevant accounting and financial information is more important then ever. The new global context, the state of the environment and the accelerating depletion of natural resources, present immense and unprecedented challenges and opportunities. Our ability to create economic systems that promote and reward businesses for restoring and enhancing natural environments, for conserving resources and for eliminating pollution and waste will help define our future prosperity. The accounting profession, the preferred provider of unbiased, relevant and reliable information, is ideally positioned to speed up this transition.

In this regard, Mr. Daniel McMahon, FCPA, FCA, President and Chief Executive Officer of the Ordre des CPA du Québec, mentions the strategic direction for 2013-2015 adopted by the Board of Directors : “ The Order aims to be recognized for the key role it plays in Quebec’s economic and social development and intends to highlight the role CPAs play in sustainable development. “

Other links of interest: CPA Quebec, Global Reporting Initiative (GRI), Center for Social and Environmental Research (CSEAR), Sustainability Accounting Standards Board (SASB), AICPA & Sustainability

About the Author: Adam Koniuszewski, CPA, CA, CFA is a Commerce Graduate from Concordia University in Montreal. He started his career with Big 4 Accounting-firm Deloitte & Touche in Montreal and London (UK) before continuing his international career with a global corporation (North America, Europe, North Africa) where he gained experience in strategy and business development, planning and risk management, corporate and government affairs. Adam has now joined the world of civil society where he works in the field of sustainability. He is a public speaker at international forums on global sustainability challenges and their business and financial aspects. Adam is also involved in several social and charitable initiatives.

Les comptables, héros inattendus du développement durable

John D. Rockefeller

John D. Rockefeller

Peu de gens réalisent que le magnat des affaires et philanthrope John D. Rockefeller, qui a bâti la plus grande fortune de l’histoire, a commencé sa carrière à 16 ans comme comptable. Son assiduité, sa capacité à « tout voir et ne rien oublier » et sa compréhension exceptionnelle de la finance d’entreprise lui ont permis de construire son empire pétrolier en basant toutes les décisions importantes sur des calculs financiers précis au centime. «J’ai tracé mon parcours par des chiffres, rien que des chiffres », a déclaré John D. Son succès souligne l’importance d’une information financière fiable et précise pour que les dirigeants puissent prendre les bonnes décisions.

La comptabilité, le secteur militaire et le développement durable

Reconnaissant l’importance d’une information financière pertinente et fiable, l’ancienne Sous-Secrétaire à la Défense, Sherri Goodman, a déclaré « Vous ne pouvez pas gérer ce que vous ne mesurez pas » et a appelé à une meilleure surveillance de la consommation d’énergie et à un suivi complet de l’empreinte carbone du Département de la Défense, avec l’objectif que l’armée américaine n’ait plus besoin de pétrole d’ici 2040. Mais d’où vient cette volonté de trouver des alternatives au pétrole?

afghan convoy deloitteUn élément important est l’augmentation du nombre de victimes dans les opérations de convoi qui fournissent le carburant et l’eau durant les opérations militaires. L’autre est économique et résulte de la façon dont les coûts de carburant sont comptabilisés. Historiquement, le carburant était comptabilisé au prix d’achat, soit environ 2 à 3 $ US/gallon ou 0,50 à 0,80 $ US/litre. Mais récemment l’armée a commencé à surveiller le « fully burdened cost of fuel » – qui comprend le coût d’achat, le transport et la protection du carburant jusqu’à ce qu’il soit prêt à être utilisé sur le terrain. Dans les régions éloignées, ces coûts peuvent être des centaines de fois plus élevés que le prix d’achat et atteindre plus de 600 $ US/gallon (158 $ US/litre).

Avec des dépenses de carburant représentant jusqu’à 36 % du budget total des opérations en Afghanistan, on comprend pourquoi l’efficacité énergétique est devenue une priorité absolue pour l’armée américaine. Une priorité qui réduit les risques tout en générant des économies considérables. Par exemple, l’armée a investi 95 millions de dollars US pour isoler les tentes et autres installations militaires en Iraq et réduire les besoins de climatisation pendant la journée et de chauffage la nuit. Cette mesure a permis d’économiser 1 milliard de dollars US dans la seule année 2010 et de réduire de 11,000 le nombre de camions de carburant. Pour en savoir plus : La sécurité énergétique, la meilleure défense de l’Amérique par Deloitte.

Le leadership du secteur privé

Yvo de Boer and Adam Koniuszewski

Yvo de Boer et Adam Koniuszewski

Les entreprises ont un rôle clé à jouer quand il s’agit de durabilité. Sur les 150 plus grandes entités économiques du monde, 59 % ne sont pas des pays mais des multinationales et nos enjeux de développement durable les plus pressants sont en grande partie causés par leurs activités et par l’impact des produits qu’ils vendent. Aujourd’hui seules les entreprises sont en mesure de résoudre ces problèmes. Selon l’ancien Secrétaire exécutif de la Convention-Cadre des Nations Unies sur les Changements Climatiques (CCNUCC) et conseiller mondial sur les changements climatiques et le développement durable chez KPMG, Yvo de Boer : « La majeure partie des solutions à la dégradation de l’environnement et au changement climatique doit provenir du secteur privé ».

Et les leadeurs du secteur privé, incluant certaines des plus grandes sociétés comme IBM, Dupont, Wal-Mart et le premier fabricant mondial de tapis-tuile Interface sont déjà engagés sur la voie de la durabilité. Le fondateur d’Interface,  Ray Anderson a déclaré que « le Business Case pour la durabilité est clair et limpide et nous allons de l’avant avec nos initiatives aussi vite et aussi loin que nous le pouvons, car ça s’est avéré être très bon pour les affaires ». Depuis le début de leur projet en 1996, les émissions de gaz à effet de serre par unité de production ont diminué de 71 % et les bénéfices sont en hausse. Ray Anderson mentionne également :

« - Nos coûts sont en baisse et non pas en hausse, ce qui dissipe ce mythe. - Nos produits sont meilleurs qu’ils n’ont jamais été parce que le design durable permet une fontaine intarissable d’innovation. - Les gens sont galvanisés autour d’un objectif inspirant et partagé. - Et la bonne volonté du marché est tout simplement incroyable ! » Voyez comment Ray Anderson partage sa passion avec George Stroumboulopoulos :

Le parcours d’Interface vers la durabilité a commencé par la réduction des déchets et en investissant les économies dans la diminution de l’intensité carbone tout en développant des processus d’entreprise et des produits toujours plus innovants. Les systèmes comptables appropriés et une surveillance continue ont joué un rôle central dans ce processus. Le comptable Buddy Hay a dirigé cette partie de la démarche d’Interface avec la mise en œuvre du système de mesure EcoMetricsTM pour comptabiliser tous les matériaux et intrants énergétiques et tous les produits sortants, les déchets et la pollution. Selon lui, « Lors de la mise en œuvre de programmes de développement durable, il faut mesurer, comprendre et articuler les critères de succès. Cela nécessite la même rigueur que pour la comptabilité financière, mais appliquée aux ressources naturelles et à l’impact environnemental ». Améliorer le suivi a permis de réduire les déchets par unité de production de 95 % depuis 1996, d’éviter des millions de dollars en coûts et de financer des efforts de durabilité supplémentaires tout en récompensant les actionnaires par une augmentation du prix de l’action de 444 % (période de 5 ans se terminant le 31 décembre 2013).

Le Prince de Galles et la comptabilité pour un avenir durable  HRH-A4S

Craignant que nos mesures actuelles du profit et du PIB donnent des signaux erronés aux chefs d’entreprises et aux gouvernements, Son Altesse Royale, Le Prince de Galles a lancé un projet mondial pour aider la profession comptable à intégrer la durabilité dans l’ADN des entreprises. Grâce à son projet de comptabilité pour le développement durable, Le Prince veut démontrer l’efficacité de l’analyse pour la durabilité et créer un environnement favorable au changement. L’objectif est de « nous assurer que nous puissions affronter les défis du 21e siècle avec des outils appropriés et non pas avec les systèmes de décision et de “reporting” du 20e siècle ». En travaillant avec des organismes qui représentent près de deux millions de comptables à travers le monde, Le Prince aide la profession à surmonter le faux choix entre la réussite de l’entreprise, la durabilité environnementale et le développement humain.

Jessica Fries, présidente exécutive du A4S, connait l’importance de la participation des directeurs financiers dans le processus de construction de modèles d’affaires durables: “Le réseau de leadership des CFO A4S est le premier groupe du genre à réunir les principaux chefs des finances dans le but d’étudier leur rôle dans l’élaboration d’approches pratiques afin d’intégrer les questions environnementales et sociales dans les décisions financières. C’est un impératif commercial de plus en plus important pour les entreprises afin d’assurer la pérennité de leurs organisations; et il y a maintenant des preuves claires que les entreprises qui traitent des questions environnementales et sociales d’une manière stratégique peuvent arriver à de meilleurs rendements financiers et commerciaux “.

Un autre domaine d’intérêt est de savoir comment rendre compte du capital naturel et social. Une organisation qui a vraiment aidé à mettre en évidence leur importance est PUMA, la société mondiale de sport-lifestyle. Jochen Zeitz , alors PDG de l’entreprise, a développé le rapport de pertes et profit environnemental de PUMA : ” Nous comprenons l’importance de la santé des écosystèmes pour l’avenir de notre entreprise. Nous avons entrepris un projet pour développer une entreprise et une chaine d’approvisionnement qui prennent en compte nos impacts environnementaux en termes monétaires, de sorte que nous puissions prendre ces effets en compte au niveau stratégique et les incorporer dans nos processus de décisions “.

Valoriser le capital naturel dans la région de Montréal

David Suzuki et Adam Koniuszewski

David Suzuki et Adam Koniuszewski

Peu de gens réalisent que certains des plus grands centres de biodiversité dans la province de Québec sont situés dans la région métropolitaine de Montréal et sont en danger à cause de l’étalement urbain. La Fondation David Suzuki a publié un rapport qui valorise les services des écosystèmes d’une ceinture de verdure qui protègerait 19% du territoire de Montréal à 4,3 milliards de dollars par année! Ce travail a contribué à convaincre la Communauté métropolitaine de Montréal de créer cette ceinture de verdure dans le cadre de son nouveau plan d’urbanisme et le gouvernement du Québec d’investir 150 millions de dollars pour sa protection.

« Avec l’analyse robuste et les quantifications que la profession comptable peut fournir, nous pouvons mieux comprendre la valeur du capital naturel et l’importance de préserver et renforcer les écosystèmes et les habitats naturels pour nos communautés », a déclaré le scientifique en chef du Fonds de recherche du Québec, Rémi Quirion.

Les rapports de durabilité et le risque de « Greenwashing »

Malgré l’intérêt croissant pour la RSE et les rapports sur la durabilité, la hausse du chiffre d’affaires pour les cabinets comptables n’est pas sans risques. Professeur de comptabilité sociale et environnementale à l’ESSEC Business School à Paris, le Dr Charles Cho se spécialise dans les questions de comptabilité et d’intérêt public et a publié de nombreuses études à ce sujet. Dr Cho avertit que « La récente prolifération du “buzz de durabilité”, en particulier au sein de la communauté des affaires, ne devrait certainement pas être une avenue pour des stratégies et des comportements opportunistes. Nous devons vraiment faire très attention à ce qui représente des questions de fond par opposition à ce qui est susceptible de devenir une simple représentation symbolique. Malheureusement, ceci arrive plus souvent qu’autrement. Un exemple typique est la production de rapports sur le développement durable ou sur la RSE – nous avons de plus en plus d’éléments qui permettent de conclure que la plupart des informations contenues dans ces rapports est généralement biaisée, sélective, triviale et parfois trompeuse. Néanmoins, ils fournissent un bouclier “légitime”, ou un voile sur ce qui se passe réellement au sein des organisations. Par conséquent, ces rapports doivent au moins être contrôlés par un ensemble de règles, mais c’est loin d’être le cas présentement.

En ce qui concerne le rôle de la profession comptable, je reste sceptique sur certains aspects tels que la course des Big 4 sur le volet de la comptabilité publique pour obtenir le prochain mandat d’assurance / mission de vérification sur la durabilité ou la RSE. Ce type de service connait une croissance exponentielle et on n’a pas besoin d’être un lauréat du prix Nobel pour comprendre que ceci est une autre grande opportunité de conseil très rentable pour les Big 4. Cependant, je suis maintenant plus que convaincu qu’il existe des avenues possibles pour les comptables, les comptables de gestion en particulier, pour apporter une contribution significative à l’agenda du développement durable. Notamment par l’utilisation de leurs compétences techniques pour mesurer et rendre compte des impacts sociaux et environnementaux réels des organisations ».

Le Dr Michel Magnan, FCPA, FCA, professeur à l’Université Concordia, confirme que des aspects importants des rapports sur la durabilité d’entreprise sont symboliques plutôt que de fond. À son avis : « Il y a eu des progrès dans la qualité de la divulgation au fil des ans par les entreprises européennes et nord-américaines. Mes recherches avec mon collègue Denis Cormier indiquent que cette information est pertinente pour les acteurs du marché (investisseurs, analystes) lorsqu’une entreprise présente une bonne performance environnementale (telle que mesurée par des paramètres objectifs), mais la comparabilité entre les entreprises et la fiabilité des informations divulguées sont encore des problèmes majeurs. Il faut garder à l’esprit que, même pour l’information financière, avec l’application d’une règlementation stricte, il y a encore des discussions quant à la comparabilité, la pertinence et la fiabilité de l’information!

Un autre problème majeur est la portée des rapports de développement durable, c’est à dire, quand nous arrêtons-nous? Par exemple, quand on évalue les émissions de gaz à effet de serre d’une entreprise de confiserie laitière comme Nestlé ou Danone, jusqu’où devons-nous aller dans le calcul des émissions du processus de production? Devons-nous inclure le méthane émis par les vaches qui produisent le lait, ou même le processus par lequel elles sont nourries (qui est souvent mécanisé et polluant)? À mon avis, c’est le prochain obstacle que les rapports de durabilité devront surmonter ».

« Alors que l’on témoigne d’une évolution de la reddition de comptes en développement durable axée sur la pertinence des enjeux, nous vérifions non seulement les rapports afin de s’assurer de la précision et de la fiabilité de l’information, mais nos pratiques en développement durable permettent également aux  organisations de mieux comprendre les enjeux les plus importants pour leur stratégie d’ensemble. Avec la montée du processus de Rapport Intégré, nous anticipons une augmentation des besoins pour cette gamme de services que nous offrons partout au Québec, au Canada et à l’international. » 
– Luc Villeneuve, FCPA, FCA, Président, Deloitte Québec

Les comptables et le développement durable

Plus d’un siècle s’est écoulé depuis que John D. Rockefeller s’est retiré de la gestion de son empire pétrolier, mais la nécessité d’une information financière robuste et pertinente est plus importante que jamais. Le nouveau contexte mondial, l’état ​​de l’environnement et l’épuisement des ressources naturelles, sont sans précédent et présentent d’immenses défis et opportunités. Notre capacité à créer des systèmes économiques qui favorisent et récompensent les entreprises pour la restauration et l’amélioration des écosystèmes et des environnements  naturels, la conservation des ressources et l’élimination de la pollution et des déchets permettra de définir notre prospérité future. La profession comptable, fournisseur privilégié d’une information financière impartiale, fiable et pertinente, est idéalement positionnée pour accélérer cette transition.

À cet égard, M. Daniel McMahon, FCPA, FCA, président et chef de la direction de l’Ordre des CPA du Québec, évoque l’orientation stratégique adoptée pour 2013-2015 par le Conseil d’administration : « L’Ordre vise à être reconnu pour son rôle clé en matière de développement économique et sociétal du Québec et entend mettre en valeur le rôle des CPA en matière de développement durable ».

À propos de l’auteur: Adam Koniuszewski, CPA, CA, CFA, est diplômé en Commerce de l’Université Concordia à Montréal. Il a commencé sa carrière dans un grand cabinet comptable à Montréal puis à Londres ( Royaume-Uni ) avant de poursuivre sa carrière internationale au sein d’une société mondiale (Amérique du Nord, Europe, Afrique du Nord), où il a acquis une expérience en stratégie et développement des affaires, planification stratégique et gestion des risques, affaires corporatives et gouvernementales et en RSE. Adam a désormais rejoint le monde de la société civile, où il travaille dans le domaine de la durabilité. Il est un conférencier dans les forums internationaux sur les défis mondiaux de développement durable, de leurs les aspects financiers et du rôle du secteur privé. Adam est également impliqué dans diverses initiatives sociales et caritatives.