11. Types of ecosystem services Provisioning Goods or products produced by ecosystems Regulating Natural processes regulated by ecosystems Cultural Non-material benefits obtained from ecosystems Supporting Functions that maintain all other services
12. Ecosystem change creates business risks and opportunities The business case for action on ecosystems is based on… Businesses impact on ecosystems and ecosystem services Businesses rely and depend on ecosystems and ecosystem services
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14. Introducing the Millennium Ecosystem Assessment (MA) 2001-04 Photo courtesy of USDA NRCS Largest assessment of health of ecosystems ever undertaken Scientifically credible and politically legitimate source of information Photo courtesy of USDA NRCS Photo courtesy of USDA NRCS Photo courtesy of USDA NRCS 1,360 experts from 95 countries over 4 years Partnership of UN agencies, five conventions, business, and NGOs VNU <www.vnu.com> Examined links between ecosystems and human well-being World Resources Institute
37. 5 steps to undertake a CEV exercise 5) 5) Embedding embed the CEV approach within company processes & procedures Post valuation 4) 4) Application use & communicate valuation results to influence internal & external decision-making Valuation 3) Valuation 3) Valuation actual valuation: may be qualitative, quantitative and/or monetary 2) Planning 2) Planning develop suitable plan to undertake valuation effectively Preparation 1) Scoping 1) Scoping define scope for valuation exercise, using checklist of questions
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39. Applications of CEV within a business What business decision is needed? How can CEV help? What is the best option from a range of alternatives? Trade-off analysis What is the true total value of a landholding or natural asset? Total valuation Which stakeholders are affected by different company impacts, and by how much? Distributional analysis Which stakeholders deserve compensation and how much? Sustainable financing and compensation analysis
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41. Hierarchy of valuation approaches Source: P. ten Brink as cited in TEEB – an interim report (2008)
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49. Thank you for your attention www.wbcsd.org [email_address]
Editor's Notes
In 2008, the World Resources Institute (WRI), World Business Council for Sustainable Development (WBCSD), and Meridian Institute developed The Corporate Ecosystem Services Review (ESR) to provide corporate managers with a proactive approach to making the connection between ecosystem change and their business goals. The ESR is a tool for corporate strategy and can augment existing environmental management systems. WBCSD member companies Akzo Nobel, Rio Tinto, Mondi, BC Hydro, and Syngenta road-tested the ESR and provided feedback during its development. The ESR has been used by an estimated 300 firms.
This is the NYC Catskills. It is also a water filtration plant for the residents of New York City, providing them with clean drinking water. New York City’s tap water has never passed through a filtration plant. The Catskill/Delaware watershed provides NY city and surrounding areas with 90 percent of their water supply (an average 1.3 billion gallons of drinking water per day) - filtered naturally through the ecosystem’s wetlands and waterways. In the late 1980s when the watershed was severely degraded by development, NYC considered building a filtration plant. Instead of building a US$6–8 billion plant (doesn’t include operating costs) as initially proposed, however, they decided to spend $1.5 billion to restore and conserve the Catskill Mountains watershed. This example highlights how economic and financial incentives can be aligned with goals that support both development and ecosystems. In the case of the Catskill/Delaware watershed, the payment for the natural water purification services also provides other services - carbon storage and recreational and cultural services at no additional cost.
U.S. federal law mandates that developers who destroy wetlands must replace them by purchasing credits or shares in wetland mitigation banks—typically located in the same watershed—to offset ecological damage. Recognizing an opportunity, ChevronTexaco received approval in 2005 to convert a tapped-out drilling site in Louisiana into a 2,800-hectare wetland to generate credits for the U.S. wetland mitigation banking market. At an expected market price of $50,000 to $62,000 per hectare, the company could earn more than $150 million selling the credits to developers. Source: Kenny, A. “Chevron Opens Mitigation Bank in Paradis(e).” Katoomba Group. Available at: http://ecosystemmarketplace.com/pages/article.news.php?component_id=4255&component_version_id=6132&language_id=12
Stage 1 – Scoping: This stage helps a company define the scope for the valuation exercise, using a checklist of questions. Only brief responses are required, and the process may involve numerous iterations. Stage 2 – Planning: This stage develops a suitable plan to undertake the valuation effectively. The plan should be more specific in terms of detail as compared to stage 1. Stage 3 – Valuation: This stage involves the actual valuation, which may be qualitative, quantitative and/or monetary. It begins by fully defining the company aspect to be valued, and ends up with subjecting the results to a sensitivity analysis. Stage 4 – Application: This stage involves companies using and communicating the valuation results to influence internal and external decision-making. Stage 5 – Embedding: The final stage is to embed the CEV approach within company processes and procedures.
Outlining the business response and actions that can be taken to better understand ones impact and dependence on ecosystems and their services, as well as reduce risks and engage new opportunities. The list also captures the main areas of work of the WBCSD Ecosystems Focus Area.
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