Sustainable companies need nature to thrive

How do we rise and adapt to the challenges of a rapidly changing world -- and what role can business play to help lead the way?

These are just some of the pressing questions that fueled the Fortune Brainstorm Green conference in Laguna Niguel, California, last week. This was my second consecutive year attending the event, which has become a signature gathering of corporate leaders, journalists, environmental groups, and technical and policy experts, all with a common interest in solving the most pressing problems facing the planet.

More than ever before, I came away amazed by how corporate attitudes have changed in recent decades. When we founded Conservation International 25 years ago, we predicted that engagement with the private sector would be essential to achieving our mission. But at that time we had no idea of the size of the transformation that was in store. The array of leading companies represented at Fortune Brainstorm Green -- Coca-Cola, Walmart, Cargill, Disney, and Dell, to name a few -- is a powerful indication of how sustainability is moving from the sidelines to the core of business strategies and actions.

The conference highlighted the challenge of meeting the food, water and energy needs of a rapidly growing world population that is projected to exceed nine billion people by mid-century. I was encouraged by the sense of urgency in the room, and the consensus that we need to pick up the pace in our collective efforts to combat world hunger, poverty, climate change and resource degradation.

I had the privilege of speaking on a panel session with Fortune Managing Editor Andy Serwer and Rob Walton, Chairman of Wal-Mart Stores and board member of Conservation International. We recalled early discussions in 2004 with Walmart’s executive leadership and BluSkye Sustainability Consulting about the extraordinary opportunity to harness Walmart’s influential position as the world’s largest retailer to generate business value and catalyze green innovation.

Today I remain convinced that we have only scratched the surface of possibilities for mobilizing the power of Walmart -- with its 10,000 stores, two million employees, and 100,000 suppliers -- as a global agent of positive change. In his remarks, Rob Walton highlighted Walmart’s 2012 Global Responsibility Report, which details important progress the company has made toward meeting its long-term goals for waste minimization, renewable energy and sustainable products. To its credit, the report also provides candid acknowledgment of how much work remains to be done. 

Along with other conference speakers, I was asked about what the future holds for corporate environmental leadership. What comes next, now that major companies in all sectors are taking steps to improve operational efficiencies, minimize environmental impacts, implement sustainable supply chains, and forge collaborative partnerships with non-governmental organizations?

I believe the answer lies in understanding the contribution of natural capital to long-term business success. Companies and societies will find themselves in serious trouble if we fail to recognize what healthy ecosystems provide us and put a value on it. We must move beyond what Pavan Sukhdev, a Conservation International board member and leader of the global initiative on The Economics of Ecosystems and Biodiversity, refers to as “the economic invisibility of nature.”

Our increasingly industrialized, urbanized world has fostered an artificial disconnection between us and the natural world, causing us to feel removed from the natural sources of our food, water, energy and raw material -- and from the deleterious effects of our consumption as well. Yet we are putting enormous pressure on the ecosystems that sustain us, and the results -- degradation, loss of productivity, systemic changes -- are, unfortunately, becoming all too clear to see,

The only way forward is for us to fully and properly value everything nature provides us. For business, it is nothing less than its license to operate. For human societies, it is nothing less than life -- and the quality of life -- itself. The understanding that healthy ecosystems are the underpinning of sustainable economies and every aspect of human well-being must inform our decisions from the community roundtable to the corporate board room.

To illustrate what this means in practice, many of the world’s leading retailers and consumer products manufacturers have made bold commitments to shift toward sustainable sourcing of palm oil, soy, paper, beef, sugar cane and other agricultural commodities.  But achieving these commitments hinges on the ability of farmers to anticipate and adapt to increasingly erratic weather patterns, water scarcity and other threats to sustainable agricultural production to meet society’s growing needs for food, fiber and fuel.

Future actions must therefore focus on supporting resilient farming systems for sustainable commodity supplies and improved livelihoods for producers. This means collaborative efforts to understand current vulnerabilities within agricultural supply chains, develop adaptation strategies to maintain yields and revenues, and integrate lessons into commodity certification standards, sourcing practices and policies.

Certified product sourcing is definitely part of the equation -- for example, retail procurement commitments based on standards set by the Roundtable on Sustainable Palm Oil. But sustaining the healthy watersheds, pollinators, and productive soils that are essential for sustainable agriculture will require looking beyond the farm level to design landscape mosaics that combine conservation of intact forests, restoration of degraded areas, and good stewardship of lands devoted to intensive production of crops and livestock.

What gives me cause for optimism is that today’s corporate leaders -- at least all of those I spoke with at Brainstorm Green -- grasp the issue. As a matter of risk management and long-term business survival, they understand their future depends on voluntary actions and government policies that value nature’s assets that underpin jobs, incomes and profits. They understand also that we are in the age of transparency, with social media shining an ever-watchful light on corporate behavior in even the most remote corners of the world.

But companies need new tools to discover, measure, and manage the value of services that natural ecosystems provides as the cornerstone of healthy, sustainable economies. To make better policy and business decisions, for instance, governments and corporations must find new ways to monitor the stocks and flows of fresh water, and to assess trade-offs based on different development scenarios. I hope next year’s Brainstorm Green event will focus on an action agenda based on the recognition that people -- and businesses -- need nature to thrive.

Photo of Barcode Tree by Bruce Rolff via Shutterstock.