A United Nations-backed report released Monday says coal-fired power generation in Asia and cattle ranching in South America are the most damaging businesses for the environment, with hidden costs of those activities that exceed the value of their production.
The report, “Natural Capital at Risk – The Top 100 Externalities of Business,” says global output of basic goods – from cement and steel processing to agriculture, forestry, fisheries, mining and oil and gas exploration – caused damage totaling $7.3 trillion a year if pollution, water, greenhouse gases and waste were priced to reflect long-term impacts. The study was conducted by a business coalition for the Economics of Ecosystems and Biodiversity (TEEB). The coalition’s backers include the United Nations, World Bank, businesses and conservation groups.
“The numbers in this report underline the urgency but also the opportunities for all economies in transitioning to a green economy,” Achim Steiner, head of the U.N. Environment Programme, said in a statement.
Coal-fired power generation in Asia, led by China, had estimated revenues of $443 billion per year but caused $452 billion in damage to nature, largely because greenhouse gases caused climate change and pollution harmed people’s health.
Cattle ranching in South America, especially in cleared parts of the Amazon forest, ranked second with damage estimated at $353 billion, largely because of stress on water supplies and deforestation that far exceeded revenues of $16.6 billion.
The report assessed more than 100 environmental impacts using the Trucost environmental model which condenses them into six environmental key performance indicators (eKPI) to cover the major categories of natural capital consumption: water use, greenhouse gas (GHG) emissions, waste, air pollution, water and land pollution, and land use.
“Forward-looking companies are already recognizing that the key to competitiveness in an increasingly resource-constrained world will hinge in large part on escalating natural resource efficiencies and cutting pollution footprints,” says the U.N.’s Steiner.
The TEEB for Business Coalition, launched in November 2012, is a global, multi-stakeholder platform formed to develop and support the uptake of natural capital accounting in business decision-making. The vision of the TEEB for Business coalition is to support a transformative shift in corporate behavior to preserve and enhance natural capital.