Graph: Negative environmental externalities across 11 sectors
From the KPMG International report, A New Vision of Value: Connecting corporate and societal value creation. Graph cited by Raj Patel at the 2015 UVM Food Systems Summit.
Transcript of Patel’s comments regarding this graph:
If we’re relying on the private sector to do something for us, I want to point out something tragic.
This graph comes from a group of bomb-throwing anarchists at KPMG. The accountancy firm, KPMG. This really interesting graph.
What it shows is the profits of different industries and the proportion of those profits that are environmental damage. I learned about this from the head of sustainability at Nestle.
He was saying at Nestle they’ve done their own internal accounting and basically they found that the story of this graph is right.
The bit I want to point out, well first of all it’s kind of interesting that we’ve got oil and gas over here. The oil industry has profits of….what’s that? $670 billion and 23% of those in a very conservative accounting are the environmental damages of the oil industry. So even if the oil industry had a sort of epiphany, and decided “Yes! We are going to pay for our environmental harm,” they would still be way in the clear, they’d still make a ton of cash.
What’s particularly interesting to me is the food industry. The food industry makes $89 billion in profit, but it’s environmental costs are 224% of those profits, and so when you hear from someone from Nestle say “Yeah, this is the kind of story we found in our own internal accounting and the reason we don’t share it is because if we share it the financial markets would kill us. That’s super interesting because Nestle’s profits last year was $15 billion.
But what we were hearing from the guy at Nestle was that their environmental damage was closer to the revenue of the company. The revenue of the company is $100 billion.
So, if you’re asking the food industry to make small tweaks and be nicer to the farmers, you know, have slightly fairer trade, that’s great, but reckon with this. Reckon with that kind of a number and show me the industrial agriculture model that’s able to internalize those costs.
You can’t do it. So we do need to be thinking systemically differently.