International guide launched by business to enhance sustainable business decision-making through ecosystem valuation.
As global natural capital continues to diminish, the world is becoming increasingly resource constrained. As a result, pressure is mounting to assess the true value environmental resources and impacts, and create environmental markets to reform business incentives.
The market in Carbon Trading has grown from nothing to US$150 billion in five years. New markets in water and biodiversity (ie biodiversity offset banking) are potentially set to become even larger. Not surprisingly, environmental valuation and markets are giving rise to increasingly material new risks and opportunities for businesses.
For the first time, an international guide has been developed, by business, for business, to navigate its way round this complex area. The “Guide to Corporate Ecosystem Valuation” was written by Environmental Resources Management (ERM), for the World Business Council for Sustainable Development and is being launched today in Geneva.
Lead author, James Spurgeon, a Technical Director at ERM, highlights the potential significance of the document. “When 13 CEOs of top multinationals publically endorse the role ecosystem valuation can play in strengthening business performance, all of a sudden, the stakes are raised for business sustainability strategies.” Mr Spurgeon, who has undertaken ecosystem valuation for 20 years, increasingly for the private sector believes that “this Guide could be a tipping point, catalyzing a transformation in the way businesses account for the environment and seek sustainable solutions”
The “Guide to Corporate Ecosystem Valuation” provides a framework for companies to evaluate the financial and societal costs and benefits associated with their dependencies and impacts on the environment. It can be readily linked to existing company tools and helps companies align both financial and sustainability goals. Applying the approach can also help identify significant cost savings and new revenue streams, and revalue company assets.
In the future the growth in valuation of currently “free” resources, and associated new markets are likely to pose significant risks and opportunities to businesses, especially those with large footprints and those that rely on water, agriculture and genetic diversity. As such, 13 multinational companies from Akzo Nobel to Rio Tinto have road tested the applications mentioned and the results are included in the report. .
You can download a copy of “Guide to Ecosystem Valuation” here.
The multinational companies who road tested the applications mentioned include: