The World Business Council for Sustainable Development (WBSCD) unveiled a new guide last week to help companies understand the benefits and impacts of the ecosystem services they depend on.
The Guide to Corporate Ecosystem Valuation (CEV) offers a framework companies can use to make better business decisions and manage risks and opportunities. Fourteen companies road-tested CEV, including AkzoNobel, EDP, Eni, Eskom, GHD, Hitachi (Chemical), Holcim, Lafarge, Mondi, Rio Tinto, Syngenta, Veolia Environment, Weyerhaeuser, and U.S. BCSD.
"CEV gives us a good opportunity to measure and review our business activities from a new perspective so that we can make the business decisions to achieve more sustainable business practices," Yoichi Takahashi, deputy general manager of Hitachi's Environmental Strategy Office, said in a statement Friday.
Human activity incurred $6.6 trillion in environmental damages in 2008, according to research firm Trucost. By 2050, the environmental costs for greenhouse gas emissions, water scarcity and other types of degradation could top $28.6 trillion, or 18 percent of global Gross Domestic Product.
WBCSD and other NGOs, including the World Resources Institute and the Meridian Institute, have for years worked to help companies reduce their environmental impacts. In 2008, the Corporate Ecosystem Services Review was released, assisting hundreds of companies with identifying ecosystem risks and potential business opportunities.
The Economics of Ecosystems and Biodiversity (TEEB) report followed, advocating that companies should include biodiversity issues in their business strategies. According to WBSCD, the new CEV framework "operationalizes" TEEB. The International Union for Conservation of Nature (IUCN), ERM and PwC also contributed to the creation of CEV.
Companies can use CEV to evaluate a product, service, project, asset or incident. During the test run, Mondi used CEV to map and value water dependencies in a South African watershed, while Weyerhauser compared the economic value of ecosystem services under different management scenarios for forested land. US BCSD / CCP used CEV to evaluate the benefits of using constructed wetland to replace a storm-water management system.
The factors contributing to the value of an ecosystem are two-fold: the benefits provided by ecosystems, such as water or flood protection; and the cost of ecosystem degradation. Yet few companies completely grasp either.
"Simply put, companies that don't know their ecosystem impact put their businesses at a greater risk and miss out on potential opportunities," James Griffiths, WBCSD's managing director of Ecosystems, Water and Sustainable Forest Products Industry, said in a statement. "Valuing these impacts and dependencies helps companies make better decisions. In addition, CEV allows business to become a bigger part of the solution to biodiversity loss and ecosystem degradation rather than just part of the problem."
Image CC licensed by Flickr user Ian Sane.