Dow Tests New Software to Assign Monetary Value to Nature
(3BL Media/Justmeans) – Everyone agrees that nature has value, but no one has been able to compute the value of natural capital in monetary terms. Now advocates of natural capital accounting want to find ways to put a value on everything nature offers in order to let companies assess the economic impact of how they manage natural resources.
Chemical giant Dow is testing new software from a California nonprofit called The Earth Genome to crunch data that can help assign monetary value to the natural world and calculate the environmental impact of its work. Earth Genome’s software collects and analyzes a wide range of datasets related to nature, along with financial data on the costs, prices and values of the services that nature provides.
With an initial focus on hydrology, its technology takes into account, for example, the price a company pays to its water utility and the cost the utility spends to operate reservoirs and water delivery services. To calculate the value of water in a particular corporate project, the software combines these factors along with the benefits the water provides to society and wildlife, such as drinking water, habitats, agriculture, and biodiversity.
The software then builds this data into maps to make it easier for a company to focus on the regions where it operates. Earth Genome’s approach can give business managers “a very practical way to screen for opportunities and run different cost benefit scenarios”, says Joppe Cramwinckel, director of water for the World Business Council for Sustainable Development, which helps Earth Genome understand the business case for water investments.
Dow is giving the new tool a try. The company, which relies heavily on water for running its chemical plants, is not new to natural capital accounting, according to its director of sustainability and enterprise risk management, Mark Weick. Dow has been working with The Nature Conservancy for the past six years to create a natural capital valuation tool, which the company says it will use in all of its capital expenditures and real estate investments by 2020.
Earth Genome will make its software code open source to invite others to build on it. The nonprofit is operating on $2.5m from the Moore Foundation, the William Bowes Family Foundation and the Draper Richards Kaplan Foundation Fund. It plans to make its software tools free but charge companies for customized data analyses, Low says.
Source: The Guardian
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