The Environment Is Now The Main Agenda Item

Without an environment we have nothing. Yet the escalation in news stories about biodiversity loss, impacts of climate change now happening at pace, a food system that is not fit for purpose (not least because of the massive externality costs in its production), obesity and neurological illness epidemics linked to environmental issues, and a constantly growing human population, must surely mean that we need to take action now.

Two unconnected reports I came across recently gave me both concern and hope. One, a report from the United Nations that found that over just the past two decades approximately 20% of the earth’s vegetated surface has become less productive, is concerning not so much because we will produce less food from that land but because of the inherent impacts industrialised food production and other land-uses are having on the planet’s support structures.

The crash in productivity potential is because of a ‘debilitating’ loss of soil biodiversity, forests, grasslands, coral reefs, mangroves, seagrass beds and genetic diversity in crop and livestock species. In the oceans, a third of fishing areas are being overharvested. On top of that, our plastic waste heavily pollutes all environments, even to the depths of the Mariana trench.

The other report gave me some hope. The UK’s largest fund management group, Legal & General Investment Management (LGIM), revealed in its recently released annual corporate governance report, that it pulled millions of pounds from eight companies and voted against their chairmen for breaching its climate policies last year.  The asset manager divested from a string of companies originally included in its Future Worlds Funds, which are covered by LGIM’s climate change pledge. They were excluded for issues including poor governance and climate disclosures, as well as for lobbying politicians on policies that risk accelerating climate change.

All companies must be made to pay the true cost of their operations on the environment. Government should introduce compulsory natural capital accounting on all firms over a certain size in the first instance. It should be a mandatory requirement of their licence to operate, through the Financial Reporting Mechanism, to have to undertake natural capital disclosure.

Companies would then be incentivised to reduce their impacts on natural capital (their own impacts and also those caused through their supply chain) and to offset unavoidable residual impacts by purchasing natural capital credits from projects set up to restore and enhance the environment. Offset mechanisms and credit purchase would be reported by corporates in their annual reports. Those that do so would attract the investment they need. Those that do not would not. The laggards would eventually collapse.

If anyone believes that we cant afford to protect the environment throughout everything we do because it impacts on the bottom line, then they are in the wrong job or on the wrong planet. The truth is, we cannot afford not to protect the environment.

We need far more competent people to work on solving environmental issues through practical work, through policy development, through financial instruments and through lobbying. In my view environmental science is as, if not more, important than engineering, agriculture, insurance, banking, and law. Without an environment one might argue that the rest are irrelevant.

Professor David Hill CBE DPhil(Oxon)

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