Ecosystem services: The next wave

More than 35 companies have publicly acknowledged that they are working on ecosystem services. At the same time, the business case for action around ecosystem services continues to solidify.

Among this activity around ecosystem services, a few fundamental questions have arisen: What is an ecosystem services analytical approach? How can it be applied within existing corporate decision-making processes?

The reality is that ecosystem services analytical tools are proliferating, as documented by BSR and WBCSD. Yet even after reading about synthesis reports, case studies and other business applications, numerous corporate colleagues have said that the approaches and corporate pathways forward to integrating ecosystem services remain unclear.  

This observation is not in the least surprising. The ecosystem services analytical domain is still emerging. Corporate work is in its early days. Few of today’s analytical tools have been widely pilot tested, validated and verified for application in the private sector, let alone within an industry or parts of the world where companies operate without long-term, robust ecological datasets, other than what corporate managers gather themselves.

Thus, while pilot testing of ecosystem services tools has occurred and continues, it is very much in process. In cases, corporate leaders see success in the pilot testing of new ecosystem services analytical approaches, in terms of new insights generated, risks avoided and business value created. Then the competitive advantage instinct kicks in and corporate leaders state there is little incentive to share the ecosystem services approach used to integrate this way of thinking into existing corporate decision-making processes.

Some corporate-relevant ecosystem services approaches being explored build on the work by World Resources Institute’s Corporate Ecosystem Services Review (ESR) and more recent efforts to build ecosystem services analyses into environmental impact assessment (ES in EIA). These approaches are the most broad-based and least intimidating to many corporate colleagues.

Some corporate leaders are exploring ecosystem services through a systems approach by considering business impacts and dependencies, such as supply chains and real estate management. They evaluate these impacts by assessing how people rely on the ecological structures, processes and functions, and how these elements will or could be affected by the business. This analytical framework enables corporate decision-makers and stakeholders alike to consider multiple factors, including trade-offs, limits, feedback loops, unintended consequences and cumulative impacts on ecosystems, as well as the implications for stakeholders who currently draw upon these ecosystem services.

Fundamentals of the approach

The key characteristics of an ecosystem services approach that are distinct from today’s corporate approaches are twofold.

1. An ecosystem services analytical approach is most accurately considered in terms of being a dashboard of multiple metrics commonly considered on their own, such as greenhouse gas emissions, biodiversity impacts and jobs created. This dashboard sits within an integrated analytical framework that sheds light on system dynamics, status of individual variables within a continually evolving (eco)system. Systems thinking is core to the approach, which requires contextualized data for interpreting whether social and environmental corporate data points mean that the business is affecting the local social, economic and ecological dynamics where the company operates.

2. An ecosystem services approach also requires robust stakeholder engagement to consider trade-offs in optimizing across a range of objectives and interests, such infrastructural development needs, political expectations or business imperatives, among other considerations. The reason relates to the fact that ecosystem services are benefits that people enjoy from functioning ecosystems. Engaging stakeholders is an essential part of understanding the benefits that exist and how they are valued by people.

Tweaking the process

In terms of process steps, a slightly adapted, streamlined version of the WRI’s Corporate Ecosystem Services Review (ESR) is being used in some companies to include various phases, including:

• Scope and identify existing ecosystem services in project area of influence
• Assess ecosystem services dependencies and impacts
• Gather ecosystem services baseline data
• Rank and prioritize ecosystem services in the project area of influence
• Develop and assess future scenarios of ecosystem services change
• Avoid, mitigate and manage

Each phase can be broken down into a set of questions to guide corporate assessment, as well as recommendations of helpful analytical tools for more granular analysis.

Applying this ecosystem services approach can yield clarity on the interconnections between environmental and social risk, opportunity and performance, as well as a framework for prioritization and assessing trade-offs internally and with stakeholders, according to preliminary reports from corporate pilot testers.

“Climate change may dominate headlines today," says WRI. “Ecosystem degradation will do so tomorrow.”

Recognition of this dynamic is growing, along with the possible scenarios of how it may play out. Now is the time to understand ecosystem services analytical approaches and test them within corporate decision-making processes.

Wave image by Willyam Bradberry via Shutterstock.