Re-Engineering the Contract between Society and Corporations

Pavan Sukhdev lays path away from ‘Brown Economy’ with his new book, Corporation 2020

October 2, 2012 – Washington, DC – The World Bank Institute and Global Tiger Initiative hosted green economy expert Pavan Sukhdev for a panel discussion about the future of green business on the anniversary of Mahatma Gandhi’s birthday in Washington. Sukhdev, former chair of Deutsche Bank’s Global Markets Center in Mumbai who also headed UNEP’s Green Economy Initiative, gave detailed remarks on his vision of policy reforms that could make business deliver a green economy as opposed to a brown one.

The panel was also a platform for Mr. Sukhdev to promote his just published book, Corporation 2020, which lays out a thesis that changes to “the rules of the game” in global business are necessary to address planetary and resource limitations that are rapidly approaching, or in some cases, already upon us. The new model of green business stands in stark contrast to the “Corporation 1920” model that has focused exclusively on profits and the bottom line without appreciation for externalities of environment, scarcity of natural resources, and social costs.

“Business has not only caused many of the problems that now face the world, but they are also best placed to fix those problems. And there are many business leaders who are eager to start rebuilding the economy in a smarter way. But the old rules of the game are still in place, such as perverse subsidies, tax loopholes, hidden costs, etc. Jochen Zeitz, Executive Chairman of Puma, a company that is setting the standard for disclosing externalities, said it very well, ‘We need to move out of the era of business that causes collateral damage to business that causes collateral benefits,’” Sukhdev said.

Vice President of the World Bank Institute, Sanjay Pradhan chaired the panel discussion and raised corporate ethics and the Bank’s knowledge agenda as part of the solution. The panel included diverse perspectives from the private sector and biodiversity and conservation community. John S. Adams, Senior Vice President and Investments Manager at UBS presented on how corporations are reaching greater specificity in their measurements of Environmental, Social, and Governance (ESG) impacts. Eric Dinerstein, Lead Scientist for the World Wildlife Fund U.S., shared cutting edge work in developing countries on deforested and degraded land, and how the new metrics might be shared and applied with private sector interests to reduce impacts on biodiversity and the environment.

Keshav Varma, Program Director for the Global Tiger Initiative, and Thomas Lovejoy, Biodiversity Chair of the Heinz Center for Science, Economics, and Environment also spoke on the importance of new business models of sustainable development that are respectful of the continued need for growth in the developing world, but integrate conservation and biodiversity.

Corporation 2020 introduces four main pillars to usher in the transformation of business over the next decades. They include the governance and limitation of leverage in the finance sector, replacing income taxes with resource taxes, accountable advertising, and standards for full measuring and disclosure of corporate externalities.

This latest book, with its focus on the dominating role of the private sector, complements Mr. Sukhdev’s last few years of public sector work with UNEP and his launch of the highly cited United Nations TEEB (The Economics of Ecosystems and Biodiversity) Reports, which made recommendations on steps to measure and mainstream the economic value of natural capital in nations’ economic bottom lines.

The issues raised by the panel and Corporation 2020 occur in the context of this year’s Rio+20 as well as this month’s Convention on Biological Diversity, CoP11 which will be held in Hyderabad, India.

Corporation 2020

Corporation 2020: Transforming Business for Tomorrow’s World

by Pavan Sukhdev, Courtesy Corporation 2020

Stock Valuation and Corporate Change:The Impact of Corporate Environmental, Social and Governance Information

John Adams’ presentation