New Eco-Fund Targets Corporate Wealth

forestA new conservation fund will request that the world's wealthiest companies dedicate 1 percent of their profits to protect threatened forests, fisheries, and other at-risk ecosystems.

The World Conservation Union (IUCN) is launching an "Earth Profits Fund" that would target the world's 500 largest corporations, which earn an estimated $1 trillion in profits annually. If 1 percent of the profit could be collected each year, the fund would receive $10 billion, organizers estimate.

The fund is among several efforts to find alternative funding for conservation programs at a time when financial instability is sweeping through markets worldwide.

University of Alaska professor Richard Steiner, the fund's founder, said many large corporations that do not deal with natural resources directly have never been asked to donate large amounts to conservation.

In addition, Steiner said that many corporate donations, while commendable, are rarely enough to address the full scope of environmental problems. "Certainly private companies all give money to various causes, thousands of companies do that," he said. "But by dispersing money as they choose, there is always a risk that it's done primarily for PR value rather than for conservation benefits."

For instance, British insurance company Aviva describes itself as the first global insurer to be "carbon neutral," and it dedicates millions of dollars each year to charities, including the conservation group WWF. Yet its total contributions - £6.75 million ($10.5 million) in 2007 - represent about 0.4 percent of its annual profit.

To ensure that donations result in meaningful environmental improvements, Steiner said the donors would not be able to decide how their money would be spent. IUCN would likely be in charge of collecting and overseeing the donations, although details about how the fund would be implemented have not yet been finalized.

The Global Environment Facility (GEF) - a joint World Bank-United Nations agency that provides most of the world's funding for global environmental projects - already serves a purpose similar to the proposed Earth Profits Fund. But Steiner said the facility has been unable to raise enough funds through government support. The GEF will receive $3.13 billion from donor countries through 2010.

"Even if [official development assistance] and all other government programs for sustainability are added in, the total amount of conservation finance is an order of magnitude short of what is necessary to reverse trends in environmental integrity of the biosphere," he said.

According to an Earth Policy Institute study, about $113 billion is needed each year to address all the world's conservation goals, such as the restoration of fisheries, croplands, and forests. 

The GEF acknowledges that billions of dollars will be necessary in the coming years as competition for the world's limited resources increases and as climate change becomes more severe, said Robert Dixon, leader of the GEF's climate and chemical team.

Dixon said the GEF is considering private funding for the first time. "The resources needed to continue adequate support for conservation and climate change projects, these are enormous sums of money," he said. "We will be placing greater emphasis on public-private partnerships and other innovative finance mechanisms to replenish the GEF."

IUCN agreed to help develop the fund at the group's World Conservation Congress earlier this month in Barcelona, Spain. Steiner said that Achim Steiner, Executive Director of the United Nations Environment Programme, has also expressed interest.

Richard Cellarius, the Sierra Club's vice president for international affairs, sponsored the fund at the World Conservation Congress. "It's going to be a long haul to get it implemented," Cellarius said. "Trying to get [financial] resources for conservation is an uphill battle."

Ben Block is a staff writer with the Worldwatch Institute. He can be reached at bblock@worldwatch.org.

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