Coca-Cola, Apple, Dow see fertile ground for investing in natural capital

Coca-Cola, Apple, Dow see fertile ground for investing in natural capital

forests and natural capital investment
ShutterstockGrisha Bruev
Apple is investing in forests, illustrating the trend toward companies bankrolling natural capital projects.

Imagine solving a key problem that your company faces with a solution that is effective, far lower cost than alternatives and so straightforward that teachers could describe it to children.

By the way, assume that this problem is fundamental to the business, highly technical and deeply contentious with local stakeholders.

Think poor water quality flowing from a factory, which is not compliant with local laws; or the focus of environmental lawsuits filed by outraged local residents or activists. In a less extreme scenario, maybe the situation relates to longer-simmering concerns, where established companies could lose out to early movers who show innovation, differentiation and strong branding.

Imagine corporate solutions, savings and simplicity.  What would you do? Would you hesitate or leap into action? 

These questions are not hypothetical. They are real. And in the case of companies looking to reverse their impacts on natural ecosystems, answers are being put into practice by a number of trend-setting companies.

To meet regulated wastewater quality mandates, Dow had to take action. Rather than building a $40 million wastewater treatment plant, the company spent $1 million creating a wetland which naturally filters water, with significantly lower construction and operational costs.

Since the day that it was activated about 19 years ago, this wetland-based approach to water filtration has been in regulatory compliance with U.S. water requirements. Over the years, the wetland-based water filtration approach has delivered $282 million in net present value savings, with more savings to come in the future as it continues to function well.

For Coca-Cola, the issue was to ensure ongoing access to water — both liquid flows and social support on license to operate — which has led to investments outside of its corporate facility fence-lines to improve upstream watershed structure and function.

A $200,000 California multi-organization project to improve water access for all downstream users is just one of 382 water-related projects that Coca-Cola has invested in at facilities around the world as part of its "water replenishment" strategy, on which $1 billion has been spent.

For Apple, the focus is on an innovative and aspirational approach with which to address corporate paper and cardboard uses and associated forestland impacts. Reliance has led to investment.

The company has invested in 36,000 acres of forestland "to create and protect the types of sustainably managed forests that produce virgin fiber for paper and packaging" on more than 36,000 acres of working forests across the United States. Apple asserts that "the collective annual production from these forests is equivalent to nearly half the virgin fiber used for iPhone, iPad, iPod, Mac, and Apple TV packaging in fiscal year 2014."

The company ultimately aims to protect as much as 1 million acres of responsibly managed working forests, so as to have zero net impact on forests of its paper use.

For TD Bank, the issue was to align values with the business and differentiate. Therefore, the bank also has made investments in protection of nearly 3,000 hectares of North American forest through the TD Forests program, bringing the total to nearly 13,000 hectares since 2012.

The list goes on with prominent companies — including Unilever, SwissRe, Royal Dutch Shell, along with the NGO The Nature Conservancy — that assert investing in green infrastructure and hybrid green/gray infrastructure improves business resilience.

Thinking future first

These actions are about future-proofing companies, by investing in that which companies rely upon.

Yet, if such savings and opportunities are being perceived and realized by some companies in terms of investing in nature-based solutions, why aren’t all companies investing? What are the pioneers seeing that other corporate decision-makers are missing?

Often, it is simply a case of business people and engineers not traditionally viewing nature-based approaches as potential solutions. Grey infrastructure is considered; not green infrastructure.

This telescope vision is being broadened by pioneers. Perception of ongoing corporate risk, by immense forces of nature (literally), is leading a number of corporate leaders to respond like akido masters.

Corporate leaders investing in nature are watching the momentum of forces that could affect their companies in the future — notably natural systems and processes related to climate change, water challenges, biodiversity loss, deforestation and other forms of habitat conversion are all contributing to ecosystem malfunction risk. 

Each of these risk drivers are becoming manifest in recognizable ways.

Investing in natural processes is fundamentally about leveraging existing momentum to amplify the power of solutions. It just so happens that the momentum is from nature.

Think about it as Isaac Newton 2.0. Gravity matters. So too do natural systems. You can fight it, or you can join and work with it. And, why wouldn’t you look for pre-existing forces and power to leverage?

Finding leverage amidst multiple adverse environmental and basic human needs-related trends means investing in that upon which your company relies. In this case, investing in green infrastructure and ecological restoration.

Companies that are investing in natural systems are pioneers today, but they should not be — and hopefully won’t be for long.

As a first step for unconvinced corporate decision-makers, the business relevance of investing in nature-based solutions can be ascertained through simple questions:

  • In the short-term, is there a nature-based solution to a problem that we are facing that offers savings and simplicity?
  • And looking forward, do we know whether our corporate facilities and key supply chain partners face green infrastructure-related (or nature-related) risks that could render them inoperable for a time? Could we mitigate ecosystem malfunction risk through investing in nature?

Leading companies are answering "yes" to both questions. And investing in ecological and watershed restoration is growing. Why not ask what nature can do to your business? And what you can do to work with natural systems?