The Biosphere Economy Scaling up Market Solutions to Ecosystem Challenges WEC/Volkswagen Roundtable, May 20-21, 2010 Alejandro Litovsky Director, Pathways to Scale, Volans

The Amazon pumps 8 trillion litres of water a year into the atmosphere Seeing differently: Eco-Utilities Biodiversity’s role in sustaining Nature’s services

Source: The Value Web An inflection point: Planetary overshoot

‘Vision 2050’ World Business Council for Sustainable Development CEOs of 29 global companies A future where markets adequately price the ecological costs of doing business. We are becoming more acutely aware of our dependence on natural systems. Companies include Alcoa, Boeing, Syngenta, Sony, E.ON, Proctor&Gamble, Duke Energy, Toyota, Infosys and Volkswagen.

An Economy aligned with natural capital Role of market pioneers and their pathways to scale A collaborative agenda The Biosphere Economy

New Dashboards Planetary Boundaries Source: Stockholm Resilience Centre

New Dashboards 2 Ecological Footprint Source: Global Footprint Network

The Biosphere Economy: 4 Trends

1998 Yangtze floods: $20 billion in losses, 250 million people affected. Chinese government forbids land degradation in upper basin. 1.Business Leadership: From Externalities to Corporate Valuation “It is only a question of time until a financial analyst, looking at the valuation of companies begins to consider (knowingly or not) the ecological factors that threaten their business.” Chris Knight PriceWaterhouseCoopers LLP

35 financial institutions with $3.5 trillion in assets back the disclosure request of the Forest Footprint Disclosure Project. 200 companies exposed to forest-risk commodities (e.g. leather, palm oil, beef) 2. Operations and Supply Chains: Ecological Footprint and Shareholders “You can’t expect companies to run a series of parallel systems for water, carbon, forests, etc.” Richard Burrett, Earth Capital Partners

Shareholders backing disclosure requests. Funds incorporating ecological footprint metrics. Carbon markets $11 billion in 2005 > $170 billion in 2010 > $3.1 trillion in Other markets: Biodiversity offsets, water services, ‘forest carbon’. 3. Markets and Finance: Markets for Ecosystems Services “Investors are switching to this agenda as they are beginning to understand the genuine long-term benefits and liabilities associated with capital allocation decisions.” Jason Scott, EKO Asset Management Partners

4. Nature-Driven Innovation: Biomimicry Source: The Biomimicry Institute

Scaling up the Biosphere Economy Working with innovators Business Leadership: What’s the company’s story about natural capital and leadership in a Biosphere Economy? Operations and Supply chains: What does the zero footprint vision look like? convergence of metrics and mgt systems? Investment: How to factor in natural capital into new portfolio and long-term risk models? Nature-driven innovation: What would radical innovation in business models, design and products look like? See:

Alejandro Litovsky Director, Pathways to Scale Thank you

‘Pathways to Scale’ Model