Dr Gillian Sparkes heard a compelling case for the creation of Shared Value at the excellent Shared Value Summit Asia Pacific on 18 April 2018 in Sydney. Dr Sparkes thought to use that momentum to highlight Victoria’s Biodiversity 2037 plan as a real opportunity for companies to participate in solutions to support ecologically sustainable development and create Shared Value; in particular by tackling the impacts of population growth and climate change on the environment and Victoria’s biodiversity. These solutions will require unprecedented investment that governments alone cannot fund. A ‘more of the same’ approach is not feasible.
We are familiar with the critical role of NFPs, philanthropy and volunteers in protecting and enhancing our environment. It’s important not to discount the Shared Value opportunities for corporates in tackling our environmental challenges.
Some corporates have long been embracing a shared value mindset: for example, for more than a decade, VicSuper has invested in the Future Farming Landscapes Project (FFL) in the Murray Darling Basin in northern Victoria, a $175 million investment in Victorian farmland, water and ecosystem assets.
The initiative has turned 91,000 hectares of degraded, overgrazed and salinity affected land into restored land for a careful balance of crops, timber harvesting, native vegetation and biodiversity. The activities also generate vegetation offsets, carbon sequestration, salt credit trading and flood mitigation services; all while delivering more than 8% average annual return on investment through crop production and land values.
Another case in point is the Bank Australia Conservation Reserve in the Wimmera that covers 927 hectares of bushland. Established in 2008, Bank Australia Conservation Reserve properties take marginal farmland and revegetate, place under a Trust for Nature covenant and are cared for by local communities. This year, the bank launched a 10-year strategy to offset the loss of biodiversity resulting from its financing of new homes.
These types of partnerships allow corporations to go beyond reporting Corporate Social Responsibility (CSR) and delivering sustainability reports, to create Shared Value and make a practical difference for the communities and the environment that matter to them. Enhancing social licence to operate is a positive outcome of Shared Value creation but it can’t be the only driver for adopting this ethos. Companies respond best and have the most positive impact at scale to social and environmental challenges, when they are creating value in every sense – financial and reputational as well as environmental and social. Dr Sparkes led CSR programs for major corporations in the 1990’s and 2000’s, and found that although considered worthy and worthwhile each CSR program was overwhelmingly viewed by the leadership as a cost to the business. This made it hard to get traction and budget. A Shared Value ethos cuts through business management 101 issues by creating bankable, reportable solutions to real environmental and social challenges whilst also building social licence and positively impacting profit and loss.
Protecting Victoria’s Environment - Biodiversity 2037, is a groundbreaking 20-year plan and sets out a real opportunity for companies to get involved and invest in Victoria’s environment. Biodiversity 2037 has two key goals:
• That Victorians value nature and;
• Victoria’s natural environment is healthy.
Biodiversity 2037 is clear that leveraging non-government investment in biodiversity is a focus. Chapter 6 - ‘Investing together to protect our environment’ – includes immediate actions to deliver this ambitious, 20-year agenda:
• Publish an Investment Prospectus to communicate to prospective investment partners the funded, unfunded and partially-funded projects that are needed to meet the targets.
• Establish a biodiversity investment roundtable and promote ongoing dialogue between all investor groups, to improve working relationships and better identify investor preferences and opportunities.
• Adopt principles for facilitating good-practice private environmental investment, to ensure probity, public interest, accountability, transparency and fairness.
• Recognise and promote successful cross-sector biodiversity investment partnerships.
The Biodiversity 2037 plan is in place and includes as a clear role for the Commissioner for Environmental Sustainability and non-government organisations. Realising this ambitious plan requires leadership and commitment. It’s about the right implementation, decision-making, a best practice regulatory and accountability framework, and regular evaluation to refine and improve its implementation.
The time of the Shared Value Summit Asia Pacific has been optimal. While governments everywhere are struggling to keep up with community expectations and the pace of change in 2018, business too faces myriad challenges. Many companies are addressing these challenges by creating measurable economic benefit in the face of technological changes, demographic shifts, wealth inequality and environmental pressures by making shared value part of their core business strategy.
This week, the Commissioner will be hosting a discussion with a small group of government, NFP and private sector leaders to discuss next steps in implementing Biodiversity 2037 through long-term, non-government funding – creating shared value will be front and centre if we are to achieve successful, long-term, cross-sector biodiversity investment partnerships.