How can corporations measure their impact on the environment while keeping the cost of doing business down? During today's OnPoint, James Griffiths, coordinator of the World Business Council on Sustainable Development's new "Guide to Corporate Ecosystem Valuation," explains how businesses and governments can measure the value of their ecosystems and determine more cost-effective ways of doing business.
Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. Joining me today is James Griffiths, coordinator of the World Business Council on Sustainable Development's new guide to Corporate Ecosystem Valuation. James, thanks for coming on the show.
James Griffiths: Thanks for having me.
Monica Trauzzi: James, WBCSD has just released this new guide that will allow businesses and governments to measure how much their ecosystems are worth and figure out if there's possibly a more cost-effective way to make their practices more sustainable. So explain exactly how this all works.
James Griffiths: Well, perhaps to start, why have we done it? And I think the big challenges that we all face, government and private sector, is we're losing biodiversity. Biodiversity degradation, loss of ecosystems is very significant and it's a material risk for governments. It's a material risk for us as civil society, but it's also a big risk for companies. And what we started to do a couple of years ago was to work with our member companies so they could understand what impact they had on ecosystems, forests, wetlands, river systems and how dependent they were on the ecosystem services that they got from Mother Nature, water, food, fiber, erosion control. We help people understand their footprint, but then they were saying, now, we need to make a business decision, so we need valuation. And so the work came about, well, let's look at how ecosystems are valued around the world and see if we can develop at guide that's business relevant so business can improve their bottom line, but also reduce their impact on biodiversity and be a more efficient user of fresh water and a better manager of forest management practices and a better, more efficient, eco-efficient producer of food and fiber.
Monica Trauzzi: Is this at all similar to offsetting practices? It kind of sounds like offset.
James Griffiths: Well, not really. I mean offsetting, I mean we believe with our member companies, when it comes to looking at ecosystem issues, they need to measure, then they need to manage. Part of managing is using valuation and then they need to mitigate. So offsetting often is a part of the mitigation option. This is really using economics, using the concept of valuation, valuing the benefits that businesses get from ecosystem services and putting a price on the damage they do through their practices so that they can change, feed it into capital expenditure analysis, financial planning, environmental impact assessment, lifecycle assessment to inform those business decisions by bringing dollars and cents in related to their ecological impacts.
Monica Trauzzi: Does this make business more expensive if, you know companies have yet another set of elements to look at when they're creating their plans?
James Griffiths: Well, it certainly brings new costs and liabilities potentially onto the balance sheet, but it also gives business an opportunity to innovate and respond to that and become a more efficient user of ecosystem services, a better manager. When we started doing this work, and we're doing it-the thing about the guide that's interesting is it's developed for business and by business. We did it through a series of road tests. We had 15 companies and we also had a number of non-business partners, biodiversity experts to help us with this type of work. And when we started doing this, most companies said, look, I'll have a go at being a road tester because I want to avoid risk. I want to manage risk. Most of the road testers ended up looking at business opportunities. Once you know what the risk is, you're using too much water, you're not paying the full price for the fiber values that you're incorporating in your products, you're contributing to your supply chain to deforestation or wetland loss, once a company knows that, companies are good at innovating and that's when you start getting the response mechanisms. But you need the numbers first.
Monica Trauzzi: So, let's talk about the real world application of the system. Explain how Mondi, the paper and packing company, used at the guide and then create a plan moving forward.
James Griffiths: Mondi is a fabulous company. It's South African and European-based, big forest tree operations, plantation forest tree in South Africa and big natural forest assets in Russia. What they did is they used corporate ecosystem valuation to look at what impacts on water their forest management practices were having in South Africa. And what they were finding is the way they planted trees was reducing the water table and that was causing problems for agriculturalists and local communities. So what they were able to do was adjust their forest management practices, restore river systems and wetlands, maintain productivity because they were able to deploy their plantations in different areas where they weren't having the water impacts and contribute to improving water availability. But, you know, in the U.S. we had four companies who looked at it here. A really interesting case study was Syngenta. Syngenta looked at the value of natural or native bee pollination, which is very significant in terms of food productivity here, an unrealized and undervalued natural system that we all benefit from. And they did that to make the business case for farmers to create or maintain native bee habitat to improve the pollination services of their plants and to maintain productivity. So, you know, dollars and cents, this is what companies look for. This is what companies operate on, translating the ecological impacts and dependence into dollars and cents informs better decision making.
Monica Trauzzi: So, it sounds like you've had support from companies all over the world. What's the reaction been overall as you roll this out internationally?
James Griffiths: Well, we're right at the start of rolling it out. It took us 18 months to develop through the different road tests. We only have a guide because companies found it useful and relevant and a good way of advancing their business growth strategies. They also enjoyed the opportunity of working with other partners. I mean businesses don't have natural resource economists as members of staff. And so a lot of them were able to develop really good relationships with World Resources Institute, the Nature Conservancy, the IUCN, World Conservation Union who do have biodiversity expertise and work in partnership in designing this framework for doing this type of analysis. We launched it in Geneva two weeks ago, a huge amount of interest. Our office here in the U.S. said let's launch it in the U.S. because we had so many road testers. We heard just the other day that there's been a very interesting relationship between Dow and the Nature Conservancy, a new partnership looking at wetlands and the water filtration services and they're very interested in using this guide as a way of taking that partnership forward. So that's very exciting for us. So it's been positive. Governments have been interested in it, good media interest and because we work with the biodiversity community, a lot of interest in it as well. There's always skeptics out there, pricing nature so you can sell nature, that's not the objective. The objective is to improve corporate decision making. Our members are big companies with big impacts and our role is to work with them to develop tools so they can mitigate those impacts.
Monica Trauzzi: OK.
James Griffiths: Manage those impacts.
Monica Trauzzi: Interesting stuff. Thank you for coming on the show, we'll end it right there.
James Griffiths: Very welcome, thank you.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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