Responding to Ecosystem Degradation

Is it possible that another equally serious threat will soon supplant climate change on the world stage, taking over headlines, making its presence felt in the most remote regions? And might this threat, while linked to climate change, threaten business in new and different ways, ways which we can hardly imagine today, but which companies must heed if they want to be in business tomorrow?

Ecosystems provide companies with a wide variety of benefits or services including freshwater, wood, pollination, climate regulation, and protection from natural hazards, to name a few.

World Resources Institute President Jonathan Lash believes that the world's forests, wetlands and other ecosystems are under tremendous pressure due to climate change and forest conversion for other uses including cattle raising and cash crop production, among other factors. "As ecosystems degrade, companies will face operational, regulatory, and reputational risks while those that offer solutions may find new business opportunities and new sources of revenue," he says.Often unacknowledged and even unknown, many corporate activities rely on ecosystems services. A new landscape, both literally and figuratively speaking, is creeping up on business, and to prepare for it, three organizations have created guidelines to help companies proactively develop strategies to manage risks and opportunities arising from ecosystem degradation.

Called the "Corporate Ecosystem Services Review", the guidelines were developed by the World Resources Institute (WRI) in collaboration with the Meridian Institute and World Business Council for Sustainable Development (WBCSD).

The review is a five-step process encompassing the idenfication of ecosystem servies a company uses, along with the associated business risks and opportunities. By doing this, the company can then develop strategies to prevent ecosystem degradation in the areas where they are active.

Five WBCSD members — Akzo Nobel, BC Hydro, Mondi, Rio Tinto, and Syngenta — "road-tested" the methodology and provided input to its design. They found that the guidelines can help companies anticipate new markets and government policies that may emerge in response to ecosystem degradation. They can strengthen corporate environmental impact assessments by adding considerations traditional methods may overlook. They also can help companies better manage conflicts over resources, identifying options for better trade-offs between ecosystem services.

Mondi, a leading international paper and packaging manufacturer, found that the methodology helped them identify and rank emerging problems, providing them with a framework for turning risks into opportunities. Their new strategies include a number of operational changes that will increase the company's efficiency in using freshwater, a scarce ecosystem service, and lead to new markets for the company's byproducts.

Akzo Nobel's Eka Chemicals division found that the Review helped them better understand how a number of emerging environmental changes are likely to affect their business and how the company might best position itself to respond to these changes.
Some companies have used the guidelines to gain insight into the direct implications that ecosystem trends pose for them. Others applied the methodology to understand the risks faced by a segment of their customers due to ecosystem degradation and, in turn, discovered opportunities for new products or services that address these risks. The guidelines profile these and other road-test experiences.