A business case for conservation…….Kiran Rajashekariah, Ravi Singh
At the most fundamental level, communities, economies and businesses depend upon biodiversity and sustainable supply of ecosystem services. Ecosystems supply natural resources and offer services such as sustaining water regimes and assimilating waste, apart from having cultural and aesthetic values. Any loss or degradation of ecosystems leads to profound impacts on societal welfare due to loss of resources, ecosystem services, increase in public expenditure and higher insurance premiums that are charged to cope with the risks that communities and businesses face.
The Millennium Ecosystem Assessmentthe first global audit of the worlds ecosystemsfound that nearly two-thirds of global ecosystems have declined more rapidly and extensively over the last 50 years, than at any other comparable time in human history. The assessment further projects continued decline in the ecosystem quality in the coming decades, in light of growing populations, rapidly expanding economies and global climate change. Left unchecked, such degradations could jeopardise future economic well-being, apart from creating new winners and losers within business communities.
Conserving ecosystems and sustaining their services are a pre-requisite for prosperity. In a seminal work on valuing worlds ecosystem services and natural capital stocks that contributes to human welfare, Robert Costanza an ecological economist from the University of Maryland suggests that global ecosystems provide goods and services valued at $33 trillion in a year. Clearly ecosystems and ecosystem services underpin markets everywhere. But unfortunately, companies rarely make a connection between healthy ecosystems and business bottomline. In fact, in a majority of cases, companies are not even aware of the extent of their dependence on ecosystem services, the impact its degradation causes and its ramifications. Likewise, their environmental management systems and their due diligence tools too are not fully attuned to the risks from ecosystem degradation or opportunities for the use of ecosystem services. Even when they do, they tend to mostly focus on risks and not on business opportunities. As a result, companies may be caught unprepared or miss new sources of revenues associated with ecosystem change. Therefore, businesses and the conservation communities need to establish a shared vision of creating market-based approaches to nature conservation. Few far-sighted companies are seeing opportunities in ecosystem markets and investing in them.
The ecosystem assessment that is built on current scientific research, underlining the economic value of ecosystems, suggests that maintaining, restoring or enhancing ecosystem services increases productivity, enhances peoples enjoyment of nature, reduces health risks, and improves resilience in the face of shocks. This opens an opportunity for businesses, by helping them make connections between healthy ecosystems and their bottomline. It further encourages sustainable business practices and provides corporate support for protecting and restoring ecosystems, and in fostering positive image of business with other stakeholders. Businesses that interact both directly and indirectly with ecosystems such as agriculture, beverages, water services, energy, forestry, electricity, tourism, healthcare, consulting, financial services and others can all gain from investments in biodiversity and ecosystems.
Both globally and in India, many new business models are helping to deliver environmental benefits, including the many intangible but valuable ecosystem services. Nature-based tourism is best-known example of how investments by private sector made in ecosystems are creating a symbiotic relationship between nature and businesses. Of course, this captures only part of the total demand for conservation.
And interestingly, more and more businesses realise that good profits can be earned from sound ecosystem management. In fact, one of the major factors in the emergence of eco-enterprises and markets for ecosystem services is the growing environmental concerns among consumers and opportunities for investment in ecosystems. Growing demand for organic food, improved cotton and certified sustainably harvested timber are a case in point. Such initiatives are just a start. Stakeholders including businesses, investors, customers, shareholders, governments, civil society and NGOs can all contribute to biodiversity conservation and in sustaining ecosystem services. The time is now.
While conservation communities have knowledge of ecosystems and methods for their effective management, businesses can bring in the much needed capital, research and technology, production and distribution capacities. Governments can lead the efforts by facilitating business to invest in conservation projects by creating enabling policies, incentivising investments through taxes, securing long-term licences to operate, help in shaping future environmental regulations and by defining standards for business to engage in conservation programmes. These steps, we believe, can go a long way in opening a new world of conservation practicethe one that ensures sustained supply of natural resources and ecosystem services, leading to a win-win situation.
Ravi Singh is secretary general & CEO, WWF-India, and Kiran Rajashekariah is senior coordinator (policy & programme division), WWF-India