In 2020, Nature Needs More has a big program of work. This year, while we continue the projects pushing for the modernisation of CITES and our work on consumer demand reduction, we will also ramp up our challenge to business; specifically, industries making vast profits from the legal trade in endangered species. As a reminder, this legal trade was valued at US$320 billion annually as long ago as 2012 in a UK Parliament Report and a 2016 European Parliament Report the legal trade in wildlife into the EU alone is worth EUR 100 billion annually (US$112 billion annually).
To explain why this issue will get greater focus, let me start with an example:
In 2015 Vietnamese journalists uncovered a plan to cut down city trees in Hanoi and Hi Chi Minh City. Lucrative licences had been given to businesses to cut down the trees, sell the timber and plant 6,700 replacement trees in Hanoi alone. A handful of people stood to make a lot of money from this.
The two cities’ residents sprang into action to save their trees. After weeks of protests, this resulted in the tree cutting plan being stopped.
If the project had gone ahead, a small number of businesses would have benefited from cutting down the trees, selling the timber and, importantly planting replacement trees. Under the logic of capitalism this makes perfect sense, even if it doesn’t make any common sense.
So, we must ask the question, should any businesses or industries profit from ‘fixing’ an issue that they profited from creating?
I ask this question because as we reach a tipping point, after decades of minimal funding being given to the non-profit sector to preserve areas of biodiversity, or aid their recovery, the result is ‘too few solutions’ have been implemented for ‘far too long’ and business now sees an opportunity.
Pragmatically, we have to accept businesses involvement to a degree, but this involvement shouldn’t go unquestioned. They must be monitored, they must be regulated, there must be justice (including tax justice). While profits may be made, proper regulation and industry contributions must ensure they are not maximised solely for the benefit of shareholders. Perhaps the only companies allowed to participate in recovery projects should be:
- Companies that have a constitution that means that they are not legally obligated to maximise shareholder returns, e.g. B-Corp structures? Even then there must be verification.
- Companies which have a long and transparent history of contributing appropriate levels of company tax in all jurisdictions they operate in?
I give these examples to demonstrate that if business is involved in efforts to reverse nature loss, we must be more vigilant in the future than we have been in the past, there must be transparency and increasing levels of scrutiny. If businesses are unhappy about this increased level of scrutiny, then they must look in the mirror at their past performance and question their historic behaviour.
So, let’s take a look at one collaboration that started in 2019 called Business For Nature. On their website they say: “Business for Nature is a global coalition bringing together influential organizations. Together, we demonstrate business action and amplify a powerful business voice calling for governments to reverse nature loss.”. And the list of businesses and organisations that have signed up is comprehensive.
Most helpful is the presentation given by one of the drivers of the Business For Nature collaboration: World Business Council for Sustainable Development. The presentation talks about ‘needing a strong business voice’, ‘developing policy recommendation to governments’, ‘attend international events to amplify the business voice’ and ‘furthering the coalition’s objectives at industry events’. The heading of slide 9 is very interesting: But This Crisis Also Offers Some MASSIVE Business Opportunities
While business has been collaborating with corporate conservation for many years, something on the scale of Business For Nature is an evolution. At the same time, despite the lofty claims, what questions must be asked and answered to ensure that this is not business as usual? – namely, business calling the shots with government and making profit from ‘massive opportunities’ to ‘clean up’ the mess caused by business ignoring the true costs of extracting ‘value’ from nature.
If the people who care about what happens from this point on to the natural world question business motivations, then they need to accept that they have left us no choice. Decades of over-exploitation of natural resources and dumping waste into the environment without any consideration to the long-term consequences should make us all very cautious when it comes to business calling for ‘reversing nature loss’.
Capitalism is built on the commodification of the natural world. Business behaving ‘badly’ is a core feature of the system, not a bug. The bigger and more profitable companies are, and the longer they get away with it, the worse this ‘bad behaviour’ gets. This has even been confirmed by academic research, which has shown hubris and overconfidence caused by excellent financial performance is a major driver of irresponsible corporate behaviour.
Di Fan, a lecturer at the business school of the Australian National University, said “His research showed companies making above-average profits were more likely to breach their environmental or social obligations than run-of-the-mill firms.” “Internal corporate governance has failed to curb bad behaviour and fines need to increase as much as sixfold” said Fan. So maybe before setting up new collaborations to ‘fix nature’, business should focus on fixing the basics in their own backyard first?
Whilst I can see the scope of Business for Nature is broader than endangered species, as Nature Needs More’s supporters and donors know, we have long voiced our concern about the lack of contributions business is making to regulating the trade in endangered flora and fauna. These concerns were further validated given the May 2019 IPBES Report confirmed that the trade in flora and fauna was the second biggest threat to species survival. One of the 3 Steps to Modernising CITES is that the companies who profit from the legal trade in endangered species need to contribute to the costs of regulating and monitoring the trade. This is far from unusual; in many other industries business fully or partly cover the cost of regulation.
Currently the trade in endangered species is one of the most lucrative in the world; some of the most endangered species in the world are legally used in high-end luxury fashion and accessories.
These are extremely profitable products, just look at the prices of Hermes handbags made from ‘exotic’ leathers. This is also a fast-growing sector with luxury consumption growing 5% in 2018, to an estimated US$1.32 trillion, according to Bain & Company’s Fall–Winter 2018 Luxury Goods Worldwide Market Study.
So why, when this trade is so lucrative, is the regulator (CITES) so impoverished that other than a handful countries, most of the 183 signatory parties are still using a 1970 paper-based permit system, that doesn’t integrate with customs, to facilitate and monitor this highly lucrative trade? The CITES representative managing the roll-out of this electronic permit system confirmed it would cost only US$30 million to roll it out to all signatories. This is a perfect example of how business could fix the basic problems in their own backyard; but they haven’t made a contribution in the decade it has been discussed.
In a July 2019 letter to Kering, LVMH and L’Oréal (all of whom have signed up to Business for Nature by-the-way), Nature Needs More asked them to cover the cost to roll out the electronic permit system globally. At CITES CoP18, we asked the LVMH representative who was presenting about the company’s python farms for a comment on LVMH contributing to the cost of electronic permitting, pointing out that 96% of python skins are used in the European fashion market and in 2013 the value of the python skin market was estimated to be over US$1 billion annually. She didn’t answer the question and the IUCN representative on the panel with the LVMH representative jumped in and diverted the conversation away from the question…not a surprise, but an interesting test!
And while we don’t single out LVMH, I think it is worth contrasting the US$30 million needed to roll out an electronic permitting globally with the fact that in 2019, the head of the company, Bernard Arnault, became the world’s third-richest person and one of only three centibillionaires – those with a net worth of at least $US100 billion.
Let’s just write that out in longhand US$100,000,000,000
A second example to show the mismatch of profits made compared to contribution to regulation is an Australian example. Australia’s ornamental fish industry estimated to be worth $350 Million annually in recent ABC Report. This report also highlighted the growing demand for marine coral from overseas buyers, which is a part of the luxury retail market.
When digging into the CITES export permit data, one permit alone enabled the export of 45,620 units of Scolymia Australis, a very sought-after coral for high-end aquariums.
Each unit of this species of coral is valued between US$100 and US$500 per coral to the USA or European ornamental aquariums industry, which means at the bottom end price this one shipment is worth US$4.5 Million to the retailer (and possibly closer to US$25 Million). So what was the fee for the CITES export permit? The princely sum of AUS$69 (USD$48); and this not unique to Australia.
How do such mismatches equate to business being FOR nature? I hope in signing up to collaborations such as Business For Nature, the companies who profit from the legal trade in endangered species will in the first instance demonstrate that they are genuinely committed to transparent supply chains for CITES regulated trade!
And yes, I know I have said this before, it is long overdue that corporate conservation grows a bigger set of balls. There is years of evidence to show how conservation has capitulated to big business, naively thinking it was their way of getting a seat at the table. If anyone is looking for a great book to read over the holiday, I recommend Jacques Peretti’s The Deals That Made The World; here is an interesting extract:
“When I moved from Parliament to reporting in the early 90s, I witnessed how power operated, revealed in a single moment in the hospitality room. I had produced a report about an oil company alleged to be polluting a large section of Canadian coastline. There was a furious argument between a representative of the oil company and a member of a prominent environmental pressure group lobbying to stop the oil company. In the studio, they had practically come to blows.
In the hospitality room afterwards, they were having a drink. The oil company exec turned to the environmentalist. “That was very good” he said, “You were excellent”. Thank you” the environmentalist replied. “You know” the oil exec continued, “we could really do with someone like you. Give me a call.” They exchanged cards, and three weeks later, the environmentalist was working for the oil company.
They had cut a deal and the bargain was this: the oil rep understood what the environmentalist could do for his company and the environmentalist spotted an opportunity. But what kind of opportunity? To ‘sell out’ and make money for himself? Or the chance to influence the multinational company from within, to make the kind of change he might not have been able to action from the outside? “
There is no doubt that environmentalists and whole conservation organisations have genuinely believed that they could influence companies either by working directly for them or forming collaborations. While there may be isolated, positive examples where this has worked, on the whole the scale of the decline of biodiversity and environmental degradation over the last 3-4 decades highlights the global conservation has been completely ineffective. This is an important consideration given the evolving collaborations such as Business For Nature.
The next generation of conservationists must be able to challenge superficial corporate PR and shallow, tick-box corporate sustainability reports. They must have a level of
commercial acumen and intuition, together with equal levels of power with their business collaborators to ensure they are politically agile and can drive the outcomes needed for the natural world.
To business and industry, we will highlight your ‘pledging’ is not the same as you ‘giving’ and your ‘making a commitment’ is not the same as ‘implementing solutions and stringently monitoring’ in relation to sustainably exploiting nature. In closing, I point back to the Business For Nature and specifically the collaborations Solutions page. Currently no solutions are listed, the text on the page stating “This page is a work in progress, but we are keen to learn from organizations and businesses about the solutions they have put in place so that we can feature them here….A call for examples will be launched soon.” I will monitor the solutions page with great interest in the weeks and months ahead. And, I ask businesses and industries to simply ‘fix the basics’ before you get ahead of yourselves with lofty initiatives. In the meantime, while I refuse to be cynical, I have every intention of remaining sceptical.