Market News

 February 09, 2012
UK to lead on green accounting at Rio+20

 The UK will use the platform provided by the Rio+20 Earth Summit this June to urge businesses and governments to incorporate natural capital into their accounting practices and decision-making.

Environment minister Caroline Spelman today identified "transparent and coherent sustainability reporting", resource efficiency and promoting green growth as key elements that the UK delegation will look to insert into the negotiating text.

This could involve a commitment to move to GDP+, a measurement that moves beyond basic economic activity to consider other factors contributing to sustainable growth, such as natural resource depletion or social wellbeing, Spelman said at an event in London.

Spelman predicted the effect of the GDP+ measure would be to "mainstream" sustainability into every decision governments and businesses make.

"We want to advocate corporate accounting for sustainability, so that is right across the private sector, enabling investors and shareholders to understand if the company [they are] investing in is making an effort to take sustainability seriously," she told reporters after her speech.

"In terms of government accounting, we want our own government to take account of natural capital and we want our statisticians to calculate the state of the nation more widely."

She also confirmed the UK plans to establish a committee reporting to the chancellor on the state of natural capital in England, intends to embed natural capital in the country's accounts by 2020, and has created an Ecosystem Market Task Force -- in conjunction with the private sector -- to develop new green goods and services.

Spelman said this expertise will offer huge opportunities for UK businesses to share green expertise overseas and expand into new markets.

"We believe you can drive significant greening if you take proper account of the value of natural capital in your government accounts," she told reporters. "We will be urging British business that advocate accounting for sustainability to go [to Rio] and share the way that they do it."

The zero draft text for the summit, entitled The Future We Want, has already been circulated, but Spelman said it "lacks focus and ambition" and is "missing some important elements".

She said the UK wants to see "a clear commitment to sustainable development and green growth", and a reduction in "harmful" fossil fuel subsidies. Meanwhile, the creation of Sustainable Development Goals (SDGs) on "linked challenges", such as food security, water security, and access to energy, are "an absolute priority".

These SDGs would extend beyond the UN's Millennium Development Goals (MDGs) to eradicate hunger and poverty, and promote environmental sustainability, added Spelman.

She also said the summit must have genuine outcomes and "be a workshop, not a talking shop".

"This government is determined to see Rio +20... deliver outcomes that will make a real, lasting difference to the economy, to the environment and to our well-being," she said.

"Governments can and must provide the framework for green growth... But the private sector and civil society have a major role to play in delivering the green economy through trade, innovation and investment."