CSR and the Value of Ecosystems

Businesses need to gain a better understanding and appreciation of how they impact local ecosystems. The World Business Council for Sustainable Development (WBCSD) says corporations that include this analysis in their CSR programmes will gain competitive advantages.

James Griffiths, from the Swiss-based WBCSD, said the natural benefits offered by ecosystems included fresh water, food and protection from hazards afforded by forests and wetlands. He argued that these were an integral part of a company's assets.

He told an international symposium on biodiversity earlier this week: "Understanding the risks and opportunities that ecosystems provide for a business will be key to their success in a more carbon- and resource-constrained world and will significantly contribute to future public policy decisions to combat biodiversity loss."
The WBCSD is developing a Corporate Ecosystem Valuation Guide, which it is planning to release in spring this year. The aim of this is to help companies put a value on their own impact on the ecosystem. This is an interesting concept which merits attention from CSR professionals.
Although the WBCSD is cleverly encouraging companies to take action to get one step ahead of the competition, the CSR imperative is essentially a moral one.

A study on The Economics of Ecosystems and Biodiversity (TEEB) launched by G8 Environment Ministers analysed the global economic benefits of biodiversity. It also looked at the costs of policy inaction. Initial results, based on deforestation alone, show that the world loses natural capital of between €1.35 trillion and €3.10 trillion (US$ 1.9 trillion and US$ 4.5 trillion) every year.

Once the ecosystem is gone, it can't be replaced. And with it, goes our quality of life, whether or not we are particularly concerned about the environment.

The WBCSD's argument, which makes logical sense, is that there are limits to natural resources. Businesses, consequently need to expect governments and regulatory frameworks to address the issue of ecosystem degradation.

Consequently, analysing one's own company impacts on the ecosystem, before such regulation comes in, makes business sense. From a CSR perspective, it is also an ethical obligation not to exhaust the natural resources on which one relies.

The examples given cover: fresh water (which is critical for most industrial processes), pollination (on which the agribusiness and food sector depend), and tourism (which often relies on the beauty of the ecosystem). Extractive industries obviously cause disturbance to the ecosystem and the forestry industry and packaging sector need continued supplies of wood.

If we do not protect these resources, they will disappear, as will the businesses that rely on them. Hence the incentive for companies to manage their own impact on the ecosystem and come up with new business solutions.

As the Cree Indian Proverb says, only when the last tree has died and the last river been poisoned and the last fish been caught will we realise we cannot eat money.

Photo credit: US Army Environmental Command