Ecological balance is one of the three pillars of sustainable development and without it, business cannot function. All companies both impact and depend on ecosystems, and the critical provisioning services (freshwater, fiber, food) and regulatory services (climate regulation, flood control, water purification, waste treatment) they provide.
The UN Millennium Ecosystem Assessment – a four-year appraisal of the Earth’s ecosystems completed in 2005 – found that 60% of the world’s key ecosystem services have been degraded over the past 50 years due to, for example, land use change, resource over exploitation, pollution, invasive species and climate change. Many of the world’s ecosystems are in decline, and this poses significant challenges to business.
More recently, The Economics of Ecosystems and Biodiversity (TEEB), a global study on the costs of biodiversity loss and ecosystem degradation, estimated the world is losing natural capital worth between Euro 1.35 trillion and 3.10 trillion every year, based on deforestation only. The WBCSD contributed to the TEEB initiative, including editing the TEEB for Business report and continues to be engage in next steps.
Ecosystem change presents both opportunities and risks to companies (as well as to their suppliers, customers and investors), such as operational (e.g. increased scarcity and cost of raw materials), regulatory and legal (e.g. public policies such as taxes and moratoria on extractive activities), reputational (e.g. relationships and image from media and NGOs), market and product (e.g. consumer preferences) and financial (e.g. availability of capital).
The WBCSD has been working on ecosystem issues for 15 years and a formal Focus Area on Ecosystems was established in 2007. Its current aims are to:
Anchor the WBCSD as the preferred business partner and voice on ecosystems while maintaining a number of strong partnerships with key NGOs and conservation organizations, such as World Resources Institute (WRI) and the International Union for Conservation of Nature (IUCN) with which we have a Memorandum of Understanding;
Develop and support implementation of corporate decision support tools to identify and respond to ecosystem risks and opportunities, such as the Corporate Ecosystem Services Review (ESR), the Guide to Corporate Ecosystem Valuation (CEV) and the Business Ecosystems Training (BET) program;
Engage in the global biodiversity and ecosystem policy debate (primarily through OECD, CBD and UNEP), and advocate a set of clear and consistent public policy recommendations, for example at key advocacy events.
Companies must anticipate that ecosystems will be more consistently incorporated into public policies, regulations, and political decisions. The UN Convention on Biological Diversity (CBD) meeting held in Nagoya, Japan in October 2010 agreed that countries should adapt their National Biodiversity Strategies and Action Plans by 2012 to support implementation of the CBD’s new 2020 biodiversity targets and other commitments. This will put strong demands on business to measure and report their actions to conserve as well as sustainably use and share the benefits of ecosystems and biodiversity. Ecosystem values will also be increasingly considered by the finance sector and business-to-business customers as they assess the biodiversity and ecosystem-related risks and opportunities of investments and supply chains.