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Corporate Ecosystem Services Review Overview

Corporate Ecosystem Services Review Overview. Definitions. Ecosystem. A dynamic complex of plant, animal, and micro-organism communities and the non-living environment interacting as a functional unit. The variability among living organisms Within species & populations Between species

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Corporate Ecosystem Services Review Overview

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  1. Corporate Ecosystem Services Review Overview

  2. Definitions Ecosystem • A dynamic complex of plant, animal, and micro-organism communities and the non-living environment interacting as a functional unit • The variability among living organisms • Within species & populations • Between species • Between ecosystems Biodiversity Ecosystem services • The benefits society and business obtain from ecosystems • The “goods and services of nature”

  3. Types of ecosystem services Provisioning Goods or products produced by ecosystems Regulating Natural processes regulated by ecosystems Cultural Non-material benefits obtained from ecosystems Supporting Functions that maintain all other services

  4. The business case for action on ecosystems Businesses impact on ecosystems and ecosystem services Ecosystem change creates business risks and opportunities Businesses rely and depend on ecosystems and ecosystem services

  5. Corporate Ecosystem Services Review (ESR) • 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

  6. Making the case: the ESR’s value add • Impacts and dependencies • New considerations –regulating services • New perspective – unites economic & environmental • Framework for considering tradeoffs • Solutions – regulatory and markets • Scientific consensus

  7. Forming an ESR team – key members • Environment and sustainability • Corporate strategy/research • Production/service team • Finance • External relations • Foundation (if related to core business) • External experts • Ecosystem services • Strategic consultants

  8. 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

  9. Step 1: Select the scope 1. Select the scope

  10. Considerations when selecting the scope 1. Which stage of the value chain? Suppliers Company Customers 2. Who and where specifically? • Which supplier(s)? • In which geographic market(s)? • Which customer(s)? • In which geographic market(s)? • What aspect of the company? • Business unit • Product line • Facility • Project • Landholdings 3. Is it strategic, timely, and supported?

  11. Step 2: Identify priority ecosystem services 2. Identify priority ecosystem services 1. Select the scope

  12. Go to worksheet

  13. Step 2: Evaluating dependence Low dependence No Yes High dependence No Yes Medium 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?

  14. Step 2: Evaluating impact Low impact No Yes Negative Positive Medium impact No Yes High impact Does the company affect the quantity or quality of this ecosystem service? Is the company’s impact positive or negative? Does the company’s impact limit or enhance the ability of others to benefit from this ecosystem service?

  15. Step 2: Select priority services

  16. Step 3: Analyze trends in priority services 3. Analyze trends in priority services 2. Identify priority ecosystem services 1. Select the scope

  17. Step 3: Trends analysis framework Condition and trends in ecosystem service Activities of others Company activities Direct drivers Indirect drivers

  18. Step 4: Identify business risks and opportunities 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 Review

  19. Step 4: Risks and opportunities Not exhaustive Type Risk Opportunity • Increased scarcity or cost of inputs • Reduced quality of inputs • Reduced output or productivity • Disruption to business operations • Increased resource use efficiency • Low-impact industrial/manufacturing processes Operational • Extraction moratoria • Lower quotas • Fines, user fees • Permit or license suspension /denial • Lawsuits Regulatory and legal • Formal license to expand operations • New products to meet new regulation • Opportunity to shape government policy • Damage to brand or image • Challenge to “license to operate” Reputational • Improved or differentiated brand • New products or services • Markets for certified products • Markets for ecosystem services • Changes in customer preferences Market and product • Increased investment by progressive lenders and socially responsible investment funds Financing • Higher cost of capital • More rigorous lending requirements

  20. Step 4: Risks and opportunities

  21. 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

  22. Categories of strategies Sector or stake-holder engagement Policy-maker engagement Internal changes • Industry peer collaboration • Cross-sector collaboration • NGO collaboration • Transactions with stakeholders • Etc. • Operations • Product strategy • Market strategy • Procurement strategy • Land management • Etc. • Tax incentives • Subsidy reforms • Protected areas • Zoning • Etc.

  23. Applications of the ESR • 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 • …

  24. ESR benefits – users told us it helped them… • 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

  25. Next steps: Ecosystem services for corporate decision-making • EIA • LCA • SME • Financial Risk WRI main page on ESR material: http://www.wri.org/ecosystems/esr WBCSD’s Ecosystem Valuation Initiative, see:www.wbcsd.org/web/evi.htm

  26. Any suggestions, comments, questions? Write to ecosystems@wbcsd.org or sozment@wri.org

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