Global Compact project: Speech by the Minister of Foreign Affairs...
Minister of Foreign and European Affairs
Geneva, 5 July 2007
(…) I’m pleased to be able to talk to you very freely about the UNEO project.
The project, as you know, is to create a UN agency capable of lending real political weight to the environmental challenges and allocating genuine resources to them. (…)
What challenges for companies?
The environment now presents a major economic challenge for companies.
Last year investment in renewables passed the $100 billion mark.
Aside from the actual energy sources, all production processes now have to be reviewed to address environmental criteria and try and achieve “clean” production. This involves significant costs and directly affects companies’ competitiveness.
Shareholders are increasingly aware of the environmental performance of the companies they are investing in. Green investment is rising dramatically. This is now estimated at 10 to 15% of savings flows into investment funds.
In the long term, new capital investment will go in priority to environmentally-responsible companies. Here as elsewhere, there will be the “AAA” companies which will have easy access to sources of finance, and the others.
This concern is quite obviously shared by consumer-citizens, who are and will be paying more and more attention to these parameters in their everyday choices.
So environmental concern is at the intersection of the conservation of a global public good and specific micro-economic interests.
This is why we need an efficient regulatory system, which pools the cost of collective action, allows the sharing of information and good practice and contributes to transparent competition.
Limits of the current system
The current system of international environmental governance is not commensurate with the challenges we have to tackle.
The institutions are both dotted all over the place and isolated from each other. There are at the moment over 500 multilateral environment agreements (MEA) and numerous international organizations and fora dealing in an uncoordinated way with the environment: the United Nations Environment Programme (UNEP), FAO, UNDP, the World Bank, Commission on Sustainable Development, OECD, UNESCO, etc.
This situation leads to inefficiency at two levels: high bureaucratic costs on one hand, and, on the other, a lack of visibility, particularly for non-governmental players, such as businesses.
The only institution devoted exclusively to the environment is UNEP. It was created in 1972, in a very different context from today’s.
It suffers from three major problems, on which there is now a broad consensus in the international community:
1) First of all, its political authority is weak. It has the status of a simple subsidiary organ of the United Nations General Assembly. It does not even have legal personality.
2) Its resources remain derisory: around $60 million a year. By comparison, the GEF’s annual budget, over which it has no authority, is ten times higher.
3) Finally, its operational performance is perfectible. Two reform programmes, Carthage and Bali, have so far remained a dead letter. Its new Executive Director, Mr Achim Steiner has very energetically set about out this task of reform. We’re supporting his efforts, but on their own they won’t be enough.
And the reforms designed to strengthen the UNEP can’t, by nature, improve the system’s overall coherence: the programme has neither the mandate nor the necessary authority for this.
This is why we need a radical overhaul of the system, which has to include creating a specialized agency devoted exclusively to the environment, a United Nations Environment Organization (UNEO).
The UNEO would bring us three major advances:
a stronger political authority. It could thus inject political momentum and define priorities to coordinate the action of all the relevant institutions.
a rationalization of the current system of governance and economies of scale. The resources thereby released would be allocated to concrete measures to protect the environment.
allow all the players to work more closely together: the intergovernmental decision-making processes are increasingly transparent. The environment involves everyone: it is normal for everyone to be involved in the decision-making.
This project was presented to the United Nations General Assembly at the end of 2003. Following the Paris Call for Action, the Group of Friends of the UNEO was set up and now has 52 States, bringing together, besides the European Union, countries from every geographical area.
We still have to persuade other States, other players. This is the job of today’s and subsequent meetings.
Conclusion: necessity of dialogue
As I was saying: the challenges of this project are on a planetary scale. It’s essential for the consultations leading to its actual establishment to be global and bring together the States, businesses, NGOs and citizens. This is how we shall succeed in giving the UNEO genuine resources, a clear mission and an indisputable legitimacy.
We have to realize that this project will be what those participating in its development make it. No one can impose a “turnkey” project. This is why I wanted to have this discussion with you. So I am going to hand over to you, listen to you.
To launch the debate, I’d simply like to suggest you look at three issues:
1) Representativeness. The time when diplomats managed world affairs between them is over. And businesses aren’t making their voices sufficiently heard in this debate. Through its remit, UNEO should innovate here and enable businesses to take part in the decision-making.
2) Management of the priorities and financial flows. Given the scale of the financial flows involved, the economic players need to have a clear idea of the way ahead. Here, the UNEO could act as a control tower at two levels: firstly, by identifying some major priorities for action and, secondly, by steering public money towards these priorities.
3) Environmental standards and labels. The past few years have seen a proliferation of environmental labels. Some, virtually self-proclaimed, are quasi marketing tools. This lack of coordination risks leading to distortions of international competition. This is one area where the UNEO could provide effective support to international firms./.