 Hello everyone, and welcome to the annual meeting of the Global Future Councils, 2019, where – and this particular issue briefing, which is on preserving the planet's biodiversity. The session is filmed and webcast live. It's an issue briefing, so we'll be talking for about 30 minutes to get some insights from our panelists, really looking at how we can preserve the planet's biodiversity. Given that, there are a million species at risk of extinction according to the United Nations. So how can we avert a sixth mass extinction? Now, the panelists I have today on my immediate left, I have Caroline Anstey. I also have Thomas Emakora. I have Diane Bannino-Holdorf, and I have Carlos Manuel Rodriguez Echandi, who's the Minister of Environment and Energy of Costa Rica. Sorry, if I just give everyone's titles again. So Caroline Anstey, who's with the Inter-American Development Bank, Diane Bannino-Holdorf, who's a Managing Director for Food and Nature at the World Business Council for Sustainable Development, and then Carlos Rodriguez Echandi, who's the Minister of Environment of Costa Rica. I'm going to put the same question to everyone on the panel. Why do we need to preserve the planet's biodiversity? Why is it important? Yes, please. Thank you so much. Coming from the World Business Council for Sustainable Development, I'll bring the multi-stakeholder lens to answer the question, but really from the lens of business. I think as business has recognized the urgency and risks and opportunities associated with climate change, the same is true with preserving nature. In fact, part of the opportunity here is to make sure we're not talking about these as siloed agendas. They're really very much linked. Whereas within climate, we've seen the linking of reporting through the task force for climate-related disclosures where we're capturing the costs, risks, and materiality of climate. We are starting to do the same for nature. One of the things that we've done within the World Business Council for Sustainable Development is in partnership with groups like the World Economic Forum, WWF, We Mean Business and Others, is to create a platform called Business for Nature, which is one of the areas where we'll be able to bring together the voice of business, both on the solutions and actions that are being taken, but also on the policy asks, what's the enabling environment that creates action consistently across business to really be able to take action on preserving, conserving, and sustainably managing nature and biodiversity? I'll pause there and bring in some more examples as we go. Caroline? I think I would reiterate that. I mean, we're human beings. We live in societies. Societies and human beings are an integral part of nature. You take away nature. You begin to take away the air we breathe. You take away what we eat. You take away what we drink. I simply don't think that we can exist without a robust natural system around us. The problem now is we don't price in that natural system. So we have an economy that essentially rewards short-term investing, which may be antithetical to nature and doesn't reward long-term sustainable upholding and boosting of nature. And I'll come to that later. I think that we need to protect it because it's a moral imperative. As simple as that. And yeah, of course, nature underpins human well-being underpins our economy. And what is happening with nature is going to happen with us humans. This is not just losing one million or so of a species. Our consumption and production patterns is affecting the life-supporting system of the planet as serious as that. It's not separate to us. No, not at all. The problem is that we humans, we believe that we are far from nature. Yeah, we are the dominant species, but we are part of nature. This planet has seen bigger and stronger species throughout its history. They have come and gone. That may be the case with humans. If we don't react immediately to what is happening, it is very serious. So it's not just that we're changing the climate or it's not just that we're polluting the environment or losing species. We are affecting the life-supporting system of the planet. So life in the future may not be similar to what we know today if we continue this unsustainable consumption and production pattern. Thomas. So I'm going to walk in the same direction here, which is that it's a binary choice, really. Do we want to continue as humans to live on earth or do we not? I think we've estimated that there is possibly a greater threat to human life within the century as both world wars combined just through climate change. It's more of a question of life or death than I think just biodiversity. We should be the most concerned about ourselves and the best way to preserve ourselves is to by help the planet be at its best regenerative capacity. There are many, as a futurist and having worked with the XPRIZE and MIT and different organizations, the G7, thinking about these kinds of questions, I think that the shortest path to success is to see ourselves as the threatened species more than the rest of the others. We're the threatened species. Given that all of us on this panel are threatened species, what does it say? Why do we even need to make a business case for this? One of the challenges is that as many of us have said is we haven't really put a cost to nature. And so while business is increasingly at recognize that their future as ours as humans does depends on the availability of the natural resources upon which the business models depend, we have to get to a consistent way of pricing those and we have to be able to recognize those who are doing well with improved costs of capital or improved recognition and stock price while also creating equitable risks for companies who are not managing those costs well. That's really an important part of this challenge. Do you see companies are doing that? We do have companies who are starting to improve the transparency of the reporting, the transparency of their sourcing, starting to build in those externalities of both environmental and social risk of their supply chain into their internal cost basis. What we don't yet have is a consistent mechanism for looking at that pricing across sectors in the same companies in the same sector to be able to really recognize and reward and challenge those who are and are not doing it well. So there's our companies who very much are responding to the challenge. We need to put the frameworks in place that will enable us to do that very consistently across businesses and sectors, particularly those sectors that are most at risk like those in food and land use, seafoods, extractives, et cetera. I mean Caroline, you work in the in your career has been in international organizations. Are you seeing this happening? I'm seeing it happening, but what we have now with we have islands of best practice in an enormous ocean of mispricing. So we still have governments that are subsidizing fossil fuels, making fossil fuels cheaper than they need to be. We have governments that are supporting... How are they sort of... How are they making... Because they're putting money into the fossil fuel industry, the same with unsustainable fisheries, the same with unsustainable agriculture. This is public money that's going into... It's public money or it's incentives. And as was just said, we need carrots, but we need sticks as well. We need to make it clear that it's no longer the case that if you want to have a green investment, you almost have to pay more. And a brown, a dirty investment will be cheaper because... And the way we do that is to price in what they're called the externalities. So if you build a bridge and to do it, you have to chop down a huge swath of forest. The cost of that forest to the economy or to the locality has to be priced into the price of the bridge. So we level the playing field. Similarly, we need to know from companies their entire supply chain and we need global metrics. At the moment, companies are sometimes integrating environment and social into their programs, but they're no global metrics and they're no global standards or regulation. And without that, consumers don't know. I believe that today, many consumers will make the choice to buy the green product, to invest in the sustainable investment, but they just simply don't know the difference because we don't have transparency in accounting or in labelling and we need that. Consumers and maybe even perhaps citizens. I want to bring in Carlos Manuel because anyways, your government has been held up as being extremely progressive in its environmental policies. I mean, how have you sort of actually tackled these challenges in your country? Well, first let me say that let me give you a reality check. 50% of the nations of this world doesn't have a rule of law. There is no transparency. There is no good corners. There is no respect to human rights. There is no independent courts. There is no free press. There is no private property. There is not many things. How are these tied to the environment? Many, many very important enabling conditions. Unless we come to realize that we need to heavily invest in the transition towards the good governance models. We will be bulldozer, bulldozed by climate change and loss of biodiversity. Climate change. I'm very concerned that, you know, there is a lot of civil long rest because of what I just mentioned. And climate change will just basically add more fuel to that social unrest. And this is just going to dramatically increase in the next one to two years. It's not just the well-educated kids from the north that are doing strikes because of climate change. It's way more serious than that. And it's going to happen heavily in those countries that are trapped within this social environment trap whereby the lack of governance will be kind of the detonator of conflicts. And that is a reality. In my case, I come from a country that, when my grandfather was born in 1898, Costa Rica was probably the last developed nation in the western hemisphere. And today, Costa Rica lives longer than the average American, lives happier than any American, with a smaller, way, way smaller environmental footprint. And that has been basically because my country has been investing in all those items I just mentioned before. And I can, you know, add one more for which has been key to us that was when we abolished the army. Seventy years ago, we abolished the army in Costa Rica. We heavily invested in education and health care. And all of a sudden, you know, people come to realize that nature is part of our development agenda. Costa Rica has been able to go 100% renewable energies, double the size of our forests, at the same time that our economy tripled in the population. Have you brought citizens along with that? Yeah, of course. In Costa Rica, it makes economic sense to protect nature. As a matter of fact, we have a decarbonization plan that aims to be zero emission by 2050, where we plan to be 60% forest cover in Costa Rica. Today we are 52, and we've been restoring degraded lands, coming, bringing nature once more. That is giving us a high possibility to be more climate resilient in water, particularly in the water sector, in the energy sectors. By the same time, we've been able to create national mechanisms where protecting nature makes a lot of sense. By the way, we've got a carbon tax in Costa Rica. It's not like the northern concept where you put a tax so people will be more efficient in how they use fossil fuels. No, in Costa Rica, we've got what I call a tropical carbon tax, where it deals with the market failure of the positive externalities. So those who are providing a carbon fixation service by keeping forests and planting trees are fully compensated for that carbon upset by those who consume fossil fuels. We have created a very positive incentive for nature conservation. If the payment for carbon matches the cost of opportunity or doing the wrong irrational agricultural livestock activities we want to avoid, people will protect forests. And this is what we have done in Costa Rica. It makes a lot of economic sense. So the good governance, the dealing with the market failures, which was very well mentioned by Diane here, are two of the things that has really worked very well in Costa Rica. Diane, in terms of those redressing, I guess those market failures, can you see an upside from business to do this? If we can get this right, we can actually flip economies and we can create incentives much like what Carlos was saying at the ground level for particularly rural communities where investment is actually often desperately needed. And that all of a sudden creates a very different mindset around what investment can look like. It's a little bit like the energy renewables concept. Once you flipped the switch into cost benefit for renewables, we're going to see the same thing with providing the cost benefit of nature. That's why we need the pricing models. That's why we need these mechanisms, these positive incentives, but also driving consistent governance on these mechanisms so that we can really flip economies to create business opportunity and investment on the ground. Thomas, how do you see civil society being part of this and driving this forward? Well, I think that the example of Costa Rica is obviously outstanding and I would say it's particularly outstanding because there hasn't been a particular civil society push. It's been a governmental approach for multiple generations, which of course applaud, and I wish it would be possible to mimic that in so many nations. But as the minister just outlined, the conditions for doing that in many places are not possible. So I think the way to hack it, if you want, when you don't have a government that is enlightened is to try and distribute capacity by informing citizens of what are some of the relevant policies that might be enforceable in their own geography, be it regional, national, city at the city scale, et cetera, or bioregional, and to sort of equip them with that sort of knowledge and to take part in activist actions that cripple governments' current actions, especially when it concerns indirect or direct subsidies to hurting or creating negative externalities in business in general. So I think that if you look at what Extinction Rebellion has been representing, especially in the UK, so I'm currently producing a documentary about the founder, and not so much because I want to support Extinction Rebellion itself, but I think it's important that we are looking at what are some of the tools that we have at our disposal when we cannot use the normal legitimation processes and we need to sort of create a new process. So Extinction Rebellion is interesting in particular because of its theory of change. So Roger Harlem is a learned academic, and he was the co-founder, and he really looked into how Gandhi, Vandela, and Martin Luther King's techniques of nonviolent civil disobedience can be instrumentalized through, call it, targeted incidents that galvanize public opinion. So we need to learn from history, and one way to look at this is to say that for a long time we were only willing to, let's say, put our life on the line for our civil liberties, but now the right to life being connected to biodiversity and planetary regeneration capacity, things have changed. And so that's my opinion about civil society. We need to give them the tools to think correctly whether it's through the climate reality or other information tools that we might have. I think non-scientific is better. It's not about the facts anymore. I think we know that we're doing the wrong thing, and we should be able to stop what is obviously poor for the planet. And then there are levels of graduation. I think there's an obsession with data and science, which has been very important to prove the point against climate deniers, but I think we're past that. So we need fast actions. Caroline, how do those fast actions happen? I just wanted to come in on this term, market failure. It's one that we use. I actually think this isn't about market failure. I think this is about the fact that we have a skewed market. It's not that there's somehow some gap and the money can't reach, or we can't support biodiversity, is that the system is tilted to discourage any long-term investment. So how do you tilt it to... I think you tilt it back through regulation by making companies integrate environmental, social, governance factors and making that public, by disclosing information so citizens and consumers can see who's investing one way, how products are made. But I think the really important thing, and I think the first step should be that government policy has to change. We've talked a lot about business. I think that governments have to change in terms of subsidization. And what is interesting now is the first time, I think you're seeing demand from young people, from millennials, from long-term investors, that now you see the business roundtable in the U.S., you see some governments realizing they will not stay in power and businesses will not meet their shareholder demands unless they change their fundamental models of the bottom line. And the bottom line in just short-term profit is not going to be enough anymore. Can you see there are some countries which are doing brilliant work on this? We're very pleased to be joined by Carlos Manuel, but are there other countries where you can see these tipping points, these changes happening? I think there are many countries that are doing this, whether they're moving away from coal-fired generation or they're changing their agricultural policy. I see other countries that are doing less, perhaps at the federal level, but where the localities are very, very active. I think in the U.S., for example, the cities movement and indeed the cities movement all around the world are taking action. And I think that is a product of the fact that we now have much more citizen participation. And in the end, people will have to respond to that. But I think that I really think we have to stand up there and talk about, and Davos has talked about this, a new form of stakeholder capitalism. And what that really means is that nature has to be a stakeholder as well as humans, as well as the physical environment, the economic environment, the social environment. We can't just think of our economies in the old way. Thomas, I'm going to come to you in just a sec, but we have a few minutes left. So if there are any questions, could you have your questions ready, Thomas? Very quickly, I just wanted to say how excited I am, but what you just shared, because stakeholder-led capitalism is something we probably can only perform today with the tools that we have, the tools of the Fourth Industrial Revolution or however we decide to call them. So through blockchain, crypto, artificial intelligence, and a number of, let's say, new uses of the way that we treat data, hopefully more ethically over time, I think there's a great opportunity. So we're faced with one of the greatest challenges ever. At the same time, we do have the tools at our disposal, and I think the work, for example, of the Rocky Mountain Institute that I helped as well, and Amory Lovens or others who've been writing about natural capital for some time, is finally, it's possible to perform that switch, and I'm tremendously excited by that. And I want people to at least feel that they can place hope that we have the instruments of change. So you actually are optimistic? I don't think it's about that. I want to be optimistic. We can come back to other remarks from the panel, but I think we have a question here from... Yeah, I'm Kerry Thomas. I work for a media company called Tortoise based in London. I wanted to ask the panel specifically to address sort of real world live question, which is the Amazon rainforest. Given your concern, Karen, about mispricing, and given what you said, Manuel, about the need for political engagement, how...what sequence of things might start to price the Amazon rainforest correctly? And is that the first step? What's the order of play that gets into the right place on the rainforest? Well, I would really love to hear Carlos' response to that, because he has to deal with these issues in real time. So let's hear. So what we saw this last year in the Amazon is what is happening all over the tropics. It's not just the Amazon. First point, it's happening in Sumatra. It's happening in Madagascar. It's happening in the Congo Basin countries. It's happening in Cambodia. It's happening in Mesoamerica all over the place. And forest fires are used by humans to do land use change to put land on the production, even though the conditions of soils may not be suitable for large-scale farming and agriculture. And why is this happening? Because there is not an international market for carbon credits at all. That's the only option the owner of the land or the country does has. And unless we agree on Article 6 on the Climate Convention, we will continue having global deforestation at the levels that we have them as of today. If we are unable within the Climate Convention to fully agree on how we will implement Article 6, the signs that we're sending to the private sector, particularly to the big agro business and to other sectors within the business community is that the business, as usually, is there and they can continue doing that. So that's one issue. But it's not just the lack of Agreement Article 6, which is the main thing. It's also the price for carbon forests. The few funds that can really mobilize resources for carbon payments are paying $5 a ton. And that is an insult to any nations with pride and decency. In Costa Rica, it costs us around $17 to $20 to generate a ton of carbon. And our carbon is high-quality carbon. It's not like that regular carbon coming from three plantations with exotic species. The carbon that we generate in Costa Rica is Gurbain carbon associated to biodiversity conservation and human well-being. Nevertheless, they offer us $5 a ton. Why $5 a ton from a high-quality carbon generating Costa Rica and somebody's paying $80 a ton for a cement plant in Switzerland? I don't get it. So if we don't fix that problem, we will have a major situation because without the carbon forests of the tropical countries, we will never, ever achieve the 1.5 degree. And global deforestation is happening as usual. Probably this year where, you know, forest fires increase more than 80% in the Amazon country basin. So we need to deal with these issues at the same time that good governance, particularly on the environment and for the sector is extremely important. We keep on having big issues on how we manage natural resources from the government perspective. We divide governments and agencies within renewable and non-renewable natural resources. In Costa Rica, I'm the Minister of Energy and Environment. I don't have a Minister of Energy to fight with. We are able to really set landscape policies and that has helped us a lot. And please don't get the wrong impression. Costa Rica is not an example. We got a mess. We are a huge mess in our country. Pollution is crazy. Transportation is very inefficient. But we've been investing in the institutional governance part of it. And we will solve this problem in 10 to 15 years. But again, my point here is you need to really invest in what I will simplify as a good governance. Thomas, if you make just remarks, very brief, because we have one more question. It's on the same kind of vein. So I fully agree with Minister here about the need for a fair carbon pricing as it being essential. However, I think there's no silver bullet as to how we're going to deal with the Amazon. And I think it's important for us to speed up piloting of new types of initiatives that leverage the fourth industrial revolution tools. And in particular, I think if we can set price on land using cryptocurrencies and in general blockchain processes for fundraising and crowdsourcing, donations from around the world, I think we can speed up the process to empower indigenous communities to defend their soil. Because it's really, it's not just the price of carbon. It's the livelihoods that are attached that motivate them to do the wrong thing or to give in. So I think indigenous groups to me are the number one vector of change in the Amazon and in most of the endangered forests because they hold the keys to Stuart forest. They've done it for a long time and it also links up with human rights and decency. I sit here on the council for human rights and the fourth industrial revolution. So there's a deep link here and I think decorrelating those issues is a wrong approach and also really testing things quickly that are currently not being done at a not national scale but rather sub-regional scale where you have, for example, the mayors that can push for this rather than national governments. That's my opinion. Okay. Last question. Thank you. Thank you, Max. There's not a question really. It's more of an observation. I come from Singapore and I work for the Straits Times. One of the things, you know, taking up from what you said about vectors of change, I find the millennials as huge vectors of change. In fact, one of our big commodity companies based in Singapore's Olam International, you'd know that company very well. He's our chair. Absolutely. He's your chair. So your chair, Sonny Berges, tells me that a lot of his thinking on sustainability was driven by what his children told him. Dad, you have an opportunity to do something about it. So I think if we bring the millennials into the debate from the ground up, we'll have pressures building on companies to do the right thing. Should we almost turn that into a question and say, how would you bring, okay, I mean, if we could, if I could have very, very quick remarks. Just to say, extension of going is mainly is very millennial related and also the sunshine movement. So absolutely. I think that was part of the civil society question asked. I think the millennials already very involved. And I see it on the business side, businesses and banks are rushing to get into impact investing because millennials want to make sure their investing has purpose. And I think companies are finding now that as a part of a recruiting deal, they have to be able to offer purpose. They cannot attract in the war for talent. They cannot attract the talent unless they stand for something beyond their bottom line. So I think we're seeing this pressure from the bottom up coming. And I celebrate it. I rejoice at it. It's timely. And we have to ride that wave now and take that opportunity. As Caroline just referenced, millennials are recognizing their power in the workforce. And I think equal, like we're seeing in civil society, they are even in larger numbers in companies. And what Sunny has also shared is that yes, while much of his awakening came from his children, what he's really hearing loud and clear is from his own employee base. We see that across all of our company members. That's where we're going to see huge drives, both with what it takes to create solutions within the business, because they're starting to move into the types of managerial positions where they can have impact with their voice, but equally through their expectations and where they choose to put their time when they go to work. Carlos Manuel, very brief. Well, I will say that not just millennials should be putting a pressure to the companies as, you know, consumers, they should engage in politics very, very quickly. I mean, otherwise, there won't be any planet left to them. They need to understand that they're not just consumers. They got a political responsibility. And they need to step up and begin positioning the environmental issues within the political discourse, campaigns, plans, and operations. And that is not happening. If I want to run for president in Costa Rica just on climate change, I won't make it. Probably we'll have, you know, one percent of the votes. So we got an issue there as well. We need them to be, you know, politically responsible, step in, and do their political career as well. Thank you. And in your country, we have to stop there. But thank you. Thank you very much.