The Value of Nature to Business

Trees showing off.

By: Darin Liston

Nature provides numerous benefits or “ecosystem services”.  These benefits are numerous: forests supply timber, purify air, and absorb storm water; river systems provide power, recreation, and habitat for commercially important fish; wetlands filter waste, buffer communities from flooding, and recycle nutrients. We all impact nature in our daily lives, affecting nature’s ability to continue to provide the services that we depend upon. When we cut down forests, soil erodes and those trees are no longer cleaning our water for us; removing coastal wetlands and dunes exposes infrastructure to violent storm surge. Thinking of nature as an asset to be used long-term can help us manage those impacts and dependencies. This is especially important for businesses, which not only rely on these naturally provided services, but have proportionately larger impacts than individuals.

Today (December 4th) in Columbus, OH, after the World Business Council for Sustainable Development (WBCSD) Midwest Conference, Barbara McCutchan (CLiGS Fellow) and I will be part of a team providing Business Ecosystem Training (BET). We will talk about what ecosystem services are, how businesses are managing ecosystem services dependencies and impacts, and what are some of the tools that can help businesses do that. We will introduce cutting-edge applications and techniques to identify business opportunities related to ecosystem services and help participants think about meaningful projects to achieve corporate sustainability objectives. 

Tools that we will introduce include the Ecosystem Services Review and the Corporate Ecosystem Valuation

The Ecosystem Services Review (ESR):

There is a strong connection between the health of ecosystems and the business bottom line. Companies depend upon and impact ecosystems in significant ways, but often don’t account for these facts. Often, company environmental management ignores the risks and opportunities arising from the use and degradation of nature’s benefits. Most environmental management system tools are more suited to issues of regulatory compliance, focusing on environmental impacts, not dependence. And, they often ignore opportunities, focusing instead on risk.

At the Business Ecosystems Training, we will talk about not only the risks involved in ignoring our dependence and impacts on nature, but also opportunities from treating ecosystems as natural capital. These risks and opportunities include things like operational risks such as higher costs for water due to scarcity, or opportunities like using wetlands to reduce the need for water treatment. There are also regulatory opportunities like working with government to preserve a forest that reduces business costs, or risks like fines for destroying buffering wetlands. Risks and opportunities also occur in business reputation, markets, and finance.

The Guide to Corporate Ecosystem Valuation (CEV).

In April 2011, WBCSD released the CEV, developed with the assistance of businesses, and catering directly to the needs of business.

As population grows, resources decline and climate changes. Companies should anticipate that public policies, regulations, and political decisions will reflect the impacts that businesses have on the planet’s ability to sustain life. Ecosystem valuation is one way to take natural capital into account; financing and the social and regulatory license to operate may well depend on it, in company operations as well as up and down the value chain in suppliers and how a product is used.

The CEV Guide is a framework for improving corporate decision-making through valuing ecosystem services, and a set of resources to navigate through related jargon and techniques. But it is not a price list of ecosystem services, a calculator, or a stand-alone methodology. It is complementary to environmental impact assessments and life cycle assessments of products.

The Center for Leadership in Global Sustainability (CLiGS), a center within Virginia Tech’s College of Natural Resources and Environment (CNRE), provides interdisciplinary graduate education, cutting edge research, and strategic leadership needed to navigate a rapidly changing world. Our work spans five continents and engages key stakeholders from education, business, government, non-profits, and local communities. Our goal is to create real solutions to the world’s global sustainability challenges. To learn more about our programs, services, and global engagement, please visit: cligs.vt.edu