GLOBAL FOOTPRINT NETWORK ANNUAL REPORT 1 LETTER FROM THE CEO We entered 2016 with a new sense of optimism following the approval of the historic Paris Climate Accord in December 2015. Building on this momentum, we had a very productive year, completing several projects with a number of longtime collaborators, including World Wildlife Fund, the United Arab Emirates, and UN Environment Programme Finance Initiative. Thanks to a second phase of work with WWF We concluded the year with three priorities that we are pursuing in 2017 Russia in 2016, the city of Moscow committed and beyond: to using the Ecological Footprint as a long- • Modernizing our Ecological Footprint Calculator term sustainability indicator. The newly established WWF Korea raised its profile and • Launching a new open data platform heightened sustainability awareness across many audiences through the launch of its first • Scaling Earth Overshoot Day Korea Footprint Report, which we co-authored. We are proud of our efforts in 2016 contributing to a sustainable, We also contributed to WWF International’s carbon-neutral world as envisioned by the Paris Climate Accord. With biennial Living Planet Report for the ninth time. the help of generous donors, we believe a razor-sharp focus on our three Our Finance for Change Initiative firmly major priorities in 2017 will move us and the world closer to achieving established Global Footprint Network as humanity’s vision as expressed by the UN Sustainable Development a leader in incorporating climate risk into Goals and the Paris Climate Accord. sovereign bond investing through the launch of two major pieces of work: ERISC PHASE II: How food prices link environmental constraints With warmest wishes, to sovereign credit risk with UNEP FI and Mathis Wackernagel, Ph.D. Carbon Disclosure for Sovereign Bonds with South Pole Group. Both reports involved CEO and Co-founder insightful collaborations with numerous financial industry leaders, including BlackRock, S&P Global Ratings, and HSBC. 2 Global Footprint Network is an international research organization that is Our vision is that all people can live well, within the changing how we measure means of nature. and manage our planet’s natural resources. Our mission is to help end ecological overshoot by making ecological limits central to decision- making. By promoting data, tools, and analysis linking resource constraints to economics and well- being, Global Footprint Network influences major investments and policy shifts to support global sustainability. 3 2016 HIGHLIGHTS Major engagements, including national studies, subnational studies, and international 10 collaborations. = 5 + 4 +1 Countries Subnational Living Planet Assessments Report 4 NATIONAL POLICY & DECISION-MAKING Global Footprint Network helps national governments understand and manage their natural resources, make confident policy decisions, and create a prosperous future. Montenegro Russia Global Footprint Network assisted Montenegro’s Ministry Global Footprint Network and WWF Russia co-authored a second, of Sustainable Development and Tourism in developing a more detailed Footprint Report on the Russian provinces and monitoring framework for the country’s National Strategy for launched it at an event in Moscow that attracted representatives Sustainable Development (NSSD 2030), which was adopted by from 37 federal provinces. The event also featured a the government in summer 2016. NSSD 2030 sets up a visionary commitment from Moscow officials to use the Footprint as agenda for sustainability that is centered on the Sustainable a long-term planning indicator. The work paved the way for Development Goals adopted by the United Nations in September deeper engagement in Russia in 2017. The report noted that 2015. Global Footprint Network’s work on the NSSD 2030 Russia’s ecological reserve declined 16 percent since 2009, followed its analysis of Montenegro’s Ecological Footprint, which potentially signaling the start of a troubling trend. It broke found that Montenegro is currently using 45% more from nature down the Ecological Footprint for 83 provinces by 12 household than the nation’s ecosystems can regenerate. consumption categories and biocapacity by six main land types. Switzerland Korea As the Swiss debated a historic green economy vote, Global WWF Korea, one of the youngest national offices in the WWF Footprint Network hosted a series of workshops with dozens of network, turned to Global Footprint Network to lead the creation stakeholders to explore the challenges of achieving one planet of the first report on the Ecological Footprint of Korea to raise living in the areas of food, energy, and resource security. We sustainability awareness among government and business also published a manifesto called “Watch out, dear Switzerland” leaders as well as the general public. One key finding: Korean (achtung-schweiz.org) that outlines how to achieve a successful residents, on average, have an Ecological Footprint eight times future for Switzerland and identifies tools to set priorities and larger than what their country’s ecosystems can provide. The report identify winning strategies. launched on Earth Overshoot Day 2016 and was featured in a subsequent successful event with Jorgen Randers, co-author of Limits to Growth. 5 NATIONAL POLICY & DECISION-MAKING Engagements with International 30 Organizations Arab Forum For Environment EU Parliament Plan Bleu UNEP Mediterranean Action and Development (AFED) Gram Vikas Tour Du Valat Plan Asian Development Bank India Institute of Technology- Union for the Mediterranean UNEP Mediterranean Action (ADB) Guwahati (UfM) Plan, Regional Activity Center on Association of Southeast Asian Sustainable Consumption and Inter-American Development UN Development Programme Production (SCP/RAC) Nations (ASEAN) Bank International (UNDP) UNEP The Economics of Center for Mediterranean IDE-India UN Environment Programme Integration (CMI) Ecosystems and Biodiversity International Union for (UNEP) (TEEB) C.I.H.E.A.M (Centre Conservation of Nature (IUCN) UNEP Convention on Biological International de Hautes UNEP World Conservation IPBES Mediterranean Diversity Études Agronomiques Monitoring Centre - Biodiversity Information Office for UNEP Department of Early Méditerranéennes) - Bari Indicators Partnership (BIP) Environment, Culture and Warning and Assessment UNESCO Venice Office École de technologie Sustainable Development UNEP Finance Initiative UN Statistics Division - System supérieure – Montreal (MIO-ECSDE) (UNEP FI) (Canada) of Environmental Economic Organisation of La UNEP Green Economy Accounting (SEEA) European Environment Agency Francophonie 6 METRICS FOR CITIES AND LOCAL GOVERNMENTS The global effort for sustainability will be won, or lost, in the world’s cities, where 70 to 80 percent of the world’s population is expected to live by 2050. Global Footprint Network has helped leaders in city and regional government around the world track natural resource demands to guide policy decisions for a sustainable future. Creating an Eco-Civilization Creating an economy that operates in harmony with nature is the centerpiece of China President Xi Jinpig’s vision of transforming the world’s most populous country into an ecological civilization. Can China become such a civilization? To find out, we collaborated with the Province of Guizhou on an Ecological Footprint Report, which was launched at the EcoForum Global conference in Guiyang. The collaboration was funded by the Swiss government. Guizhou, China’s most biodiverse and mountainous province, shares geographic similarities with Switzerland and is seeking to emulate Swiss success in developing a resource-efficient, tourist-friendly, and prosperous economy. The Footprint analysis found that Guizhou has the sixth-lowest per person Ecological Footprint, at 1.72 global hectares per capita, and the fifth-lowest per person income (18,700 yuan) among China’s provinces. On the Human Development Index, Guizhou’s score was calculated to be 0.62, which is below the goal of 0.7 for high development and below the 0.73 average in China. By aiming to increase income through improvements in efficency, Guizhou is an ideal province to pilot ecological civilization development because it can build an economy that invests and builds upon its unique natural resources: a rich biodiversity and beautiful mountainous landscapes. www.chinafootprint.org 7 New Research on Food Price Shocks FINANCE FOR Population growth and changing diets are creating strains on the food system. CHANGE Our report, ERISC Phase II: How food prices link environmental constraints to sovereign credit risk, showed how differently food price Our Finance for Change shocks driven by environmental trends would affect the Initiative seeks to transform economies of 110 countries. If global food prices double, as they did in 2008, then China could lose $161 billion in the financial system so GDP and India could lose $49 billion. However, the biggest that climate change and effects would be felt in low-income countries, according resource constraints are better to our findings. Collaborators included the UNEP Finance integrated by investors. Through Initiative, S&P Global Ratings, and HSBC. groundbreaking research and strong industry collaboration, we have become a leading voice guiding investors and credit Carbon Disclosure for Sovereign Bond Investors rating agencies to recognize the Working with 10 finance industry leaders, Global Footprint Network developed an approach for investors to disclose and