The cost of environmental damage to the global economy hit 6.6 trillion US dollars—11 percent of the global GDP—in 2008, according to a new study by the Principles for Responsible (PRI) and UNEP Finance Initiative. If business continues as usual, the study predicts that environmental damage will cost 28 trillion dollars by 2050. The new study undercuts the popular belief that environmental health and economic welfare are at odds.
“This report sends a powerful message that the environment is also the business of business,” Paul Clements-Hunt, executive director of UNEP Finance Initiative, said in a statement, adding that “Polluters must pay. Safeguarding the environment and using our natural assets efficiently entail collective action. Cohesive policy and regulation is required to fully account for externalities and speed up the integration of material environmental issues into investment decisions”
According to the report, one third of the environmental destruction (costing 2.2 trillion US dollars) was carried out by the world’s top 3,000 public companies. The most destructive industries included utilities, oil and gas, and mining.
“An increasing number of large investors are recognizing that environmental externalities generated by one company are likely to come back and hit their portfolios in another place or time,” James Gifford, Executive Director of PRI said in a statement.
Implementing clean energy and more efficient technologies could lower the projected cost of environmental damage by 23 percent in 2050, according to the report.
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