Why Restore Nature?Why Restore Nature?

Convincing the Accountant Convincing the Accountant by by Aimée Aimée PunkosdyPunkosdy

The Earth Today

“If today is a typical day on planet Earth, we will lose 116 square miles of rainforest, or about an acre a second. We will lose another 72 square miles to encroaching deserts, as a result of human mismanagement and overpopulation. We will lose 40-100 species and no one knows if the number is 40 or 100. Today the human population will increase by 250,000. And today we will add 2,700 tons of chlorofluorocarbons to the atmosphere and 15 million tons of carbon. Tonight the Earth will be a little hotter, its water more acidic, and the fabric of life more threadbare.”

Rona Fried, Ph.D.President & CEO

Sustainable Bussiness.com

How much is our environment worth?

By the environmentalist’s accounting, our environment and the ecosystem services it provides, is invaluable because nature has a worth of its own.

How much is our environment worth?

But, to business, untouched nature typically hasn’t had much value, at least not one that could be put into a general ledger.

What companies need to know

• Business and ecosystems are inextricably linked.

• Companies that don't know their ecosystem impact put their business at a greater risk and miss out on potential opportunities.

• Valuing these impacts and dependencies helps them to make better decisions, and enables businesses to contribute to the solution to biodiversity loss, and ecosystem degradation, rather than just being part of the problem.

Natural Capital the environmental stock or resources of Earth

that provide goods, flows, and ecological services required to support life

Benefits that flow from natural capital • water• crops• timber • flood protection • waste assimilation • carbon sequestration • recreation • aesthetic benefits

*The annual global value of these natural goods and services was conservatively calculated at $33 trillion.

(Restoration of Natural Capital 2000)

How valuable are our ecosystems?

• Through deforestation alone, the world loses ecosystem services worth between $2-5 trillion each year.

• The global carbon market grew from virtually nothing in 2004 to over $140 billion in 2009.

• The current global biodiversity offset market is worth a minimum $3 billion and is expected to grow rapidly.

• Sustainability-related global business opportunities in natural resources may be in the order of $2-6 trillion by 2050.

• The cost of global environmental externalities was nearly $7 trillion in 2008, with the largest 3,000 companies causing around 35% of them.

• 55% of corporate executives believe biodiversity should be among the top ten items on the corporate agenda, and 59% believe biodiversity is more of an opportunity than a risk for their companies.

Corporation Ecosystem Valuation

• Corporate Ecosystem Valuation (CEV) can be defined as a process to make better-informed business decisions by explicitly valuing both ecosystem degradation and ecosystem services.

• Valuation can make decision-making around ecosystems more compelling and practical, thereby enhancing sustainable development strategies and outcomes.

• Businesses cannot manage what they don't measure. This process enables companies to place a value on their ecosystem impacts, use, and management.

Business Benefits of Corporate Ecosystem Valuation

Operational

Regulatory and Legal

Reputational

Market and Product

Financing

Sustaining & enhancing Revenues

Reducing costs & taxes

Revaluing assets

Accessing liability &compensation

Measuring company value

Reporting performance

Optimizing societalbenefits

Internal:

Enhancing Business Performance and the Bottom Line

External:

Complying with and informing external requirements, demands, and actions

Stock Promotion: small cap, mid cap, and large cap

investments• The most exciting companies, in terms

of how they are conducting their business, are finding solutions for our environmental problems and these companies can lead us to a sustainable society.

• SB20: The World's Top Sustainable Business Stocks: Google Inc., IBM, Pure Technologies, First Solar, Phillips Electronics, and Chipotle Mexican Grill

New York City Case Study• Before it became overwhelmed by agricultural

and sewage runoff, the watershed of the Catskill Mountains provided New York City with water ranked among the best in the Nation by Consumer Reports.

• When the water fell below quality standards, the city investigated to find out what it would cost to install an artificial filtration plant. The estimated price tag for this new facility was $6-8 billion, plus annual operating costs of $300 million — a high price to pay for what once was free.

• New York City decided instead to invest a fraction of that cost ($6.6 million) in restoring the natural capital it had in the Catskills watershed.

• In 1997, the City raised an environmental bond and is currently using the funds to purchase land, which would halt development in the watershed, compensate property owners for development restrictions on their land, and to subsidize the improvement of septic systems.

Dow and Sao Paublo Water Utilities

• Dow donated $1.5 million through its charitable foundation to support a joint effort with TNC and Sao Paublo water utilities to restore 865 acres of forest surrounding the Cachoeira reservoir.

• Not only will this money protect biodiversity, generate carbon credits and create green jobs, but it should also reduce the amount of sediment flowing into the water system by over 60%.

• This will benefit people and businesses in Sao Paulo including Dow.

Businesses Recognizing Nature’s Value

Google Inc. $100 million to a wind project in the state of Oregon bringing total recent investments into clean energy by Google to more than $350 million.

TD Bank Financial GroupContributed over $42 million to more than 16,000 environmental projects over the past 15 years.

S.C. Johnson The green list process which has eliminated 1.8 million pounds of volatile organic compounds from Windex and made their saran wrap PVDC free.

Businesses Recognizing Nature’s Value

Figi Water Became one of the largest contributing member of 1% for the Planet, a growing movement of more than 1,200 companies and brands that donate 1% of their sales to organizations in support of environmental causes.

BoeingCurrently shooting for 100% renewable energy with the help of a 2.6 MW rooftop solar system which will be the sixth largest rooftop solar system in the US.

Am I Convinced?

YESYES

ReferencesClewell, A. F. (2000). Restoration of Natural Capital. Restoration Ecology , 8 (1), 1-1.

Ecological Society of America. (2000, August). Ecosystem Services: A Primer. Retrieved March 31, 2011, from actionbioscience.org: http://www.actionbioscience.org/environment/esa.html

FIJI Water. (2010). 1% for the Planet. Retrieved April 12, 2011, from FIGI Water.com: http://www.fijiwater.com/

Griffiths, J. (2011). The Business Case for Valuing Natural Resources. U.K.: Guardian Professional Network.

Hobbs, R. a. (2001). Restoration Ecology: Repairing the Earth's Ecosystems in the New Millennium. Restoration Ecology , 9 (2), 239-246.

SustainableBusiness.com. (2011). We Help Green Businesses Grow. Retrieved April 16, 2011, from SustainableBusiness.com: http://www.sustainablebusiness.com/

Taylor-Cassan, J. (2007, October 25). Everyday Companies Who Give Back To The Environment. Retrieved April 10, 2007, from AboutMyPlanet: http://www.aboutmyplanet.com/daily-green-tips/everyday-companies-going-2/

The Dow Chemical Company. (2011). Protecting the Planet on Earth Day, Everyday. Retrieved April 16, 2011, from DOW: http://www.dow.com/

Walsh, B. (2011). Global Business: Paying for Nature. New York: Time.

World Business Council for Sustainable Development. (2008). Guide to Corporate Valuation - A Framework for Improving Corporate Decision-Making.