Why Entergy, Wells Fargo and Timberland invest in restoration

Why Entergy, Wells Fargo and Timberland invest in restoration

Landscape-scale restoration could reduce global warming by 0.5 degree Celsius by the century’s end.

How many capital investments does your business currently have that you can count on to return $9 of value for every $1 invested? And of those, how many also positively affect your reputation, help protect your license to operate, fuel your integrated reporting and can reduce your internal cost of carbon by $30 per metric ton?

If the answer is none, chances are you’re not yet investing in landscape-scale restoration.

Landscape-scale restoration is the other side of the coin to its better-known counterparts, conservation and forest preservation. While these important activities focus on saving what’s not yet been destroyed, restoration is about actively repairing past damage. Because there’s good news: We can restore the earth. We can fix landscapes degraded by agriculture and industry. And doing so delivers outsize environmental, social and economic benefits. In essence, restoration is about playing offense, not just defense, with our natural capital. And it’s time we took it much more seriously.

Landscape-scale restoration is an emerging field and there have been a range of efforts in recent years to understand its potential. These efforts have yielded the staggering fact that landscape-scale restoration could reduce global warming by 0.5 degree Celsius by the century’s end, leading us to conclude that it’s one of the greatest, most underleveraged strategies we have to tackle carbon emissions.

There’s a financial story, too: WBCSD estimates that by restoring lands that are currently degraded, we could turn what is currently a $40 billion annual loss into a $1.4 trillion annual gain, primarily through incorporating reforested marginal lands into working lands that increase agricultural productivity.

These numbers are compelling. But in a world where competition for capital is ferocious, we need to be able to demonstrate a more tangible return, in a tighter timeframe and at a more local level. At Restore the Earth, we’ve heard from many business leaders that the barrier to investing in natural capital is simple: It’s hard to justify the investment at scale when the benefits can’t be quantified. This was a problem we set out to solve.

We’ve spent the past several years modeling the environmental, social and business benefits of landscape restoration and testing them through live projects on the ground. We’ve been able to establish that it costs $5,000 to restore and protect one acre of degraded land and that the total social, environmental and market benefits of every repaired acre is $45,000 — a return of $9 for every $1 invested. These returns are generated because restoration yields economic benefits in a range of ways, including improved soil and crop productivity, better air quality, cleaner water, restoring biodiversity, expanded habitat for animals and birds, storm protection, waste treatment, new opportunities for recreation and tourism.

To enable business leaders to understand and communicate the full value of their natural capital investments with transparency and accountability, we created a restoration value model that measures the value a given restoration investment generates in terms of the IIRC’s six capitals — financial, manufactured, intellectual, human, social and relationship, and natural. This brings new validity and credibility to their integrated reporting, enabling them to make a stronger case to their investors and their board. It was developed in collaboration with former GRI director Eric Israel and is verified to international standards.

We are also working to create a visual tool that displays the progress of restoration projects in real time. This will live on our website so that investors can point their stakeholders to a live map tracking the environmental, social and economic progress of their given plot. Consider this in contrast to the majority of offsets bought on the open market where assurance of quality is limited and traceability may be low. It is the ultimate in transparency and verification.

The benefits are especially clear for companies working with an internal carbon price. Indeed, through projects with corporate investors, we’ve been able to reduce the internal cost of carbon from $40 a metric ton to $15. This saved one investor $38 million on a single project. There is no cheaper way to offset your carbon footprint.

Business leaders who invest in landscape restoration are reducing their climate risks, enhancing their reputation and social license to operate, and supporting the resilience of the environment and local communities. Few capital investments deliver as much value. That’s why companies as varied as Shell, Entergy, Wells Fargo, CITGO, Veolia, Eileen Fisher and Timberland have invested in projects with Restore the Earth Foundation. While most of our work has been developed in the U.S., the approach can be applied anywhere in the world.

The U.N. Convention to Combat Desertification (UNCCD) estimates that we have the potential to restore 2 billion hectares of land globally — an area larger than South America. That’s a huge investment opportunity for leaders with the vision to take it on. 

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