Corporate Ecosystem Services Review Overview
Mar 27, 2015
Corporate Ecosystem Services ReviewOverview
• The benefits society and business obtain from ecosystems
• The “goods and services of nature”
Ecosystem services
Biodiversity • The variability among living organisms– Within species & populations– Between species– Between ecosystems
Ecosystem • A dynamic complex of plant, animal, and micro-organism communities and the non-living environment interacting as a functional unit
Definitions
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ProvisioningGoods or products produced by ecosystems
RegulatingNatural processes regulated by ecosystems
CulturalNon-material benefits obtained from ecosystems
Types of ecosystem services
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SupportingFunctions that maintain all other services
The business case for action on ecosystems
Businesses impact on ecosystems and ecosystem services
Businesses rely and depend on ecosystems and ecosystem services
Ecosystem change creates business risks and
opportunities
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Structured method to develop strategies to manage risks and opportunities arising from dependence and impact on ecosystems
WRI/ WBCSD/ Meridian Institute Approx. 300 cies using tool since
March ‘08 launch Available in 6 languages
Corporate Ecosystem Services Review (ESR)
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Impacts and dependencies New considerations – regulating services New perspective – unites economic &
environmental Framework for considering tradeoffs Solutions – regulatory and markets Scientific consensus
Making the case: the ESR’s value add
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Environment and sustainability Corporate strategy/research Production/service team Finance External relations Foundation (if related to core business) External experts
Ecosystem services Strategic consultants
Forming an ESR team – key members
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5 Steps in the ESR
5. Develop strategies
4. Identify business risks and opportunities
3. Analyze trends in priority services
2. Identify priority ecosystem services
1. Select the scope
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Step 1: Select the scope
1. Select the scope
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Considerations when selecting the scope
1. Which stage of the value chain?
CustomersCompanySuppliers
• Which customer(s)?
• In which geographic market(s)?
• What aspect of the company?
― Business unit― Product line― Facility― Project― Landholdings
• Which supplier(s)?
• In which geographic market(s)?
2. Who and where specifically?
3. Is it strategic, timely, and supported?
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Step 2: Identify priority ecosystem services
2. Identify priority ecosystem services
1. Select the scope
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Go to worksheet
Microsoft Excel Worksheet
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Step 2: Evaluating dependence
1. Does this ecosystem service serve as an input or does it enable / enhance conditions for successful company performance?
2. Does this ecosystem service have cost-effective substitutes?
Yes
No Low dependence
No High dependence
Yes
Medium dependence
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Step 2: Evaluating impact
1. Does the company affect the quantity or quality of this ecosystem service?
2. Is the company’s impact positive or negative?
Yes
No Low impact
No Medium impact
3. Does the company’s impact limit or enhance the ability of others to benefit from this ecosystem service?
Yes
High impact
Positive Negative
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Step 2: Select priority servicesECOSYSTEM SERVICES DEPENDENCE AND IMPACT MATRIX
Dependence Dependence DependenceProvisioning
Crops ○ - Livestock ● - Capture fisheries Aquaculture Wild foods ○ + Timber and other wood fibers ● + Other fibers (e.g., cotton, hemp, silk) Biomass fuel ○ ● + Fresh water ● ● - Genetic resources ○ ○ ? Biochemicals, natural medicines, and' pharmaceuticals ○ +
RegulatingAir quality regulation ? ? Global climate regulation ○ ● + Regional/local climate regulation ○ ○ + Water regulation ● ● - Erosion regulation ○ ○ - Water purification and waste treatment ○ - Disease regulation Pest regulation Pollination Natural hazard regulation
CulturalRecreation and ecotourism ● + Ethical values ○ +
Ecosystem services ImpactImpact Impact
Customers Company operationsSuppliers
Key ● High + Positive impact ○ Medium - Negative impact Low ? Don't know
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Step 3: Analyze trends in priority services
3. Analyze trends in priority services
2. Identify priority ecosystem services
1. Select the scope
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Step 3: Trends analysis framework
Condition and trends in ecosystem service
Direct driversActivities
of others
Indirect drivers
Company activities
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4. Identify business risks and opportunities
3. Analyze trends in priority services
2. Identify priority ecosystem services
1. Select the scope
Steps in the Corporate Ecosystem Services Steps in the Corporate Ecosystem Services ReviewReview
Step 4: Identify business risks and opportunities
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Step 4: Risks and opportunities
Regulatory and legal
• Extraction moratoria• Lower quotas• Fines, user fees• Permit or license suspension /denial• Lawsuits
Reputational • Damage to brand or image• Challenge to “license to operate”
Operational • Increased scarcity or cost of inputs• Reduced quality of inputs• Reduced output or productivity• Disruption to business operations
Financing • Higher cost of capital• More rigorous lending
requirements
Type Risk
Market and product
• Changes in customer preferences
Opportunity
• Increased resource use efficiency• Low-impact
industrial/manufacturing processes
• Formal license to expand operations
• New products to meet new regulation
• Opportunity to shape government policy
• Improved or differentiated brand
• New products or services• Markets for certified products• Markets for ecosystem services
• Increased investment by progressive lenders and socially responsible investment funds
Not exhaustive
Step 4: Risks and opportunities
Priority ecosystem service
Potential risks Potential opportunities
Freshwater
• Increased water scarcity due to:
– Invasive species – Nearby farmers – Climate change
• Internal efficiency improvements\• (Co) financing improvements of
nearby farmers
Biomass fuel • Use plantation residue in Mondi
generator• Sell plantation in biomass-to-energy
markets
Global climate regulation
• Emerging markets for carbon sequestration
Recreation and ecotourism
• Ecotourism market potential
Livestock
• Grazing reducing productivity • Perceived “under-utilization” of
Mondi land by nearby farmers
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Step 5: Develop strategies
5. Develop strategies
4. Identify business risks and opportunities
3. Analyze trends in priority services
2. Identify priority ecosystem services
1. Select the scope
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Categories of strategies
Internal changes
•Operations
•Product strategy
•Market strategy
•Procurement strategy
•Land management
•Etc.
Sector or stake-holder engagement
• Industry peer collaboration
•Cross-sector collaboration
•NGO collaboration
•Transactions with stakeholders
•Etc.
Policy-maker engagement
•Tax incentives
•Subsidy reforms
•Protected areas
•Zoning
•Etc.
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Frame ongoing initiatives in an ecosystem services perspective
Build and leverage employee knowledge Use the process for other purposes Carry out a gap analysis Embed ecosystem services into Environmental
Impact Assessments (EIA) Improve plants and land management Incorporate into product development Analyze supply chains …
Applications of the ESR
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Provide insights on ecosystem issues Highlight (potential) risks and opportunities Put ecosystems higher on corporate agenda / give added
urgency to action on ecosystems Shape ecosystem management plans / integrate ES into
corporate planning Strengthen existing approaches to environmental impact
assessment Demonstrate leadership in corporate sustainability Communicate ecosystem issues internally and externally Engage non-business stakeholders / improve relationships
ESR benefits – users told us it helped them…
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Next steps: Ecosystem services for corporate decision-making
• EIA• LCA• SME• Financial Risk
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WRI main page on ESR material: http://www.wri.org/ecosystems/esr
WBCSD’s Ecosystem Valuation Initiative, see:www.wbcsd.org/web/evi.htm
Any suggestions, comments, questions? Write to [email protected] or [email protected]