HOW TO CONDUCT A CORPORATE ECOSYSTEM SERVICES REVIEW

This article explains how businesses interested in the ecosystem services framework can conduct a corporate ecosystem services review.

Last week’s article looked at the relationship between business and ecosystem services more broadly. You can find this via the link below.

ECOSYSTEM SERVICES & BUSINESS

What is clear is that all businesses, even service sector businesses depend on ecosystem services in some way. Businesses contribute towards ecosystem degradation which interrupts the flow of ecosystem services.

The best literature that I have come across on how to conduct a corporate ecosystem services review was written by Hanson et al in 2012. This paper which you can find via the link below sets out the clear steps for any business to audit their dependence on ecosystem services.

The Corporate Ecosystem Services Review

The ecosystem services review consists of five steps. These are shown in the image below.

ESR Scope.jpg

1. Select the scope

In this step businesses need to choose the scope within which to conduct the review. This could be a business unit, a product, a particular market, an infrastructure project, a major supplier, or a major customer segment.

Depending of the type of business a key decision needs to be made whether or not to look at a company’s own operations, or to the activities of its suppliers. Another option would be to look at the impact that the customers have on ecosystem services whilst they are using the product.

2. Identify priority ecosystem services

In this step businesses need to systematically evaluate their dependence and impact on ecosystem services. The key is to determine which are a high priority. These will be ones which are highly relevant to corporate performance and for which no readily available substitutes are available either at all or without incurring prohibitive costs.

In this step it is a good idea to engage the key corporate stakeholders. They can explain which ecosystem services they value. This can help to create a shortlist of critical services for the company to consider its impact on and dependence upon.

3. Analyse trends in priority services

In this step businesses need to research and evaluate the condition and trends in the priority ecosystem services that they identified in step 2 as well as the underlying drivers of these trends.

In this step it is a good idea to reach out to subject matter experts who have deep knowledge related to the services. Interview experts early on. These experts can quickly summarise trends, identify critical drivers and pinpoint the most relevant data sources.

4. Identify business risks and opportunities

In this step businesses need to identify and evaluate the business risks and opportunities that might arise due to trends in the priority ecosystem services.

In this step it is wise to have a business opportunity mindset switched on at all times. This is a corporate ecosystem services review, so businesses should look for opportunities to provide new products or services that help others businesses to mitigate their impact on ecosystems or adapt to declining ecosystem services.

5. Develop strategies

In this final step businesses should outline strategies for managing the risks and opportunities that they have identified in the previous 4 steps.

These could be internal changes related to the way the company operates.

These could be working more collaboratively with other businesses to solve some of the problems identified or engaging with NGO’s proactively.

These could also be engaging with policy makers to look for ways that the business community and national governments can work together to help protect and enhance flows of ecosystem services.

What you need to know

This article explained how businesses who are interested in the ecosystem services framework can conduct a corporate ecosystem services review.

We looked into the paper by Hanson et al, which sets out a clear methodology for how this can be done.

Businesses should be interested in ecosystem services if they are dependent on or impact upon these services.

Businesses should be interested because these impacts and dependencies create risks. Ecosystem degradation also presents opportunities for farsighted businesses who are smart enough to realise that this cannot continue forever and create solutions for addressing these problems

Thank you for reading,

By Barnaby Nash

Please share your thoughts in the comments section below or reach out to me on social media. What do you think about the corporate ecosystem services review methodology?

Let’s stay connected

I can be reached on LinkedIn and on Twitter @FollowBarnaby

ECOSYSTEM SERVICES & BUSINESS

This article looks into the ecosystem services concept and its relation to businesses. The ecosystem services concept emerged out of the Millennium Ecosystem Assessment which ran from 2001-2005.

This was the largest audit ever conducted of the state of the world’s ecosystems. The study which involved thousands of researchers from around the world painted a stark picture of decline across the world’s ecosystems in the previous 50 years.

F-356Txt(wri).indd

Their research revealed that 15 out of the 24 ecosystems they evaluated had been degraded.

But it wasn’t all doom and gloom. The emergence of the ecosystem services framework is a major outcome of the Millennium Ecosystem Assessment.

A simple definition of ecosystem services, is that they are the benefits that people obtain from ecosystems.

Businesses make use of ecosystem services in a variety of ways depending upon their business model and the type of sector that they operate in.

But what is clear, is that all businesses to a greater or lesser degree depend on ecosystem services. This is interesting because businesses are contributing to ecosystem degradation, which leads to a decline in quantity and quality of these ecosystem services.

If markets were functioning correctly. This would not be happening. Businesses therefore are falling to make the connection between healthy ecosystems, ecosystem services and their bottom line.

There are some businesses like Puma who have gone very public with their commitment to environmental profit and loss accounting. But I would say that on the whole ecosystem services do not get the attention they deserve in the business community.

What you need to know

This article looked into the ecosystem services concept and its relation to businesses.

We looked into the Millennium Ecosystem Assessment and the ecosystem services framework which emerged out of it.

We looked into how businesses depend on but degrade ecosystem services, but are also well placed to support them.

Unfortunately, there is yet to be a breakthrough of the ecosystem services framework by businesses.

Thank you for reading,

By Barnaby Nash

Please share your thoughts in the comments section below or reach out to me on social media. What do you think needs to be done to increase the use of the ecosystem services framework by businesses?

Let’s stay connected

I can be reached on LinkedIn and on Twitter @FollowBarnaby

SUSTAINABILITY – FROM NICE TO HAVE TO MUST HAVE

This article looks into sustainability and its journey from a nice to have to a must have for businesses.

title

Sustainability can sometimes be put in the category of a nice to have activity. Important, but something to only receive attention after all other business-related problems have been solved. What this means in practice, is that businesses who utilise this philosophy make meagre progress on social and environmental issues. This is because there are always other incoming issues which are prioritised instead.

This is a shame and is caused by a mindset which sees sustainability as a luxury and something that will cost them money. As we will see shortly, simply by changing this mindset can see businesses use sustainability to create value.

Another example of mistaken thinking is to see sustainability as a communications or public relations device. There is no doubt that sustainability makes for excellent marketing collateral. It is disappointing therefore that so many sustainability communications are dull, turgid and devoid of any motivational or inspirational content.

Emphasis needs to be placed on actual sustainability progress. If more emphasis is placed on the hyping of mediocre gains than it is on getting businesses to use less energy and water and producing less waste, then this can be considered to be greenwashing. For more information on greenwashing please see the article below.

GREENWASHING & SUSTAINABILITY

I am minded to reference a great paper released in 2014 by McKinsey & Company. The paper by Sheila Bonini and Steven Swartz sets out in clear detail that the era of seeing sustainability as a nice to have is over and that a focus on social and environmental parameters delivers real economic results for businesses. You can find the article via the link below.

Profits with purpose: How organizing for sustainability can benefit the bottom line

They point to a growing body of evidence which indicates that sustainability initiatives can help to create profits and business opportunities.

They reveal that leading companies pursue sustainability because it has a material financial impact. Not because of any public relations or communications requirements. Even though many genuine communications opportunities may emanate from their efforts.

Their work also includes the well written quotation below. One that for a long time I was proud to display as a pinned Tweet on my Twitter feed.

Sustainability is a long-distance journey; the evidence is growing that it is one worth taking

A major outcome of their study which extensively searched the literature as well as original surveys was the following. Their conclusion is that sustainability programs are not only strongly correlated with good financial performance but also play a role in creating it.

With evidence like this coming from a respected organisation such as McKinsey & Company, the era of sustainability being seen as a nice to have activity has surely come to an end.

Their study also included an important revelation on why some businesses achieve success while others have mediocre progress on sustainability. They revealed that to succeed, sustainability efforts need to be an organisational priority, with clear support from leadership. Executive level buy is instrumental to progress on social and environmental areas.

What you need to know

This article looked into sustainability and its journey from a nice to have to a must have for businesses.

We looked into how sustainability can be marginalised and pushed to the back of the list of organisational priorities at some companies. It can also be seen purely as a reputation management tool. Both of these attitudes lead to chronic under performance on sustainability.

We looked into a well-researched paper by McKinsey & Company which points out that sustainability is not something that adds costs and complexity to businesses, but is something that creates value and opens up business opportunities.

Overall sustainability has moved from a nice to have to a must have, with executive level buy in propelling companies to perform strongly not just in economic aspects, but in social and environmental aspects too.

Thank you for reading,

By Barnaby Nash

Please share your thoughts in the comments section below or reach out to me on social media. What do you think about sustainability and its move from being a nice to have to a must have?

Let’s stay connected

I can be reached on LinkedIn and on Twitter @FollowBarnaby

ELON MUSK ON CLIMATE CHANGE

This article looks into Elon Musk’s perspective on climate change. Elon Musk has been in the news a lot recently. This is partly because of the Thai cave controversy and partly because of his trialling out of an idea to take Tesla private via his Twitter feed.

But next week is Climate Week, so I thought it would be topical to look into Elon Musk’s perspective on this important issue.

elon

He is a rarity in being a CEO who is fully aware of the need for breakthrough exponential technologies to solve the pressing social and environmental challenges. As opposed to the more incremental thinking that abounds in most boardrooms. His perspective on climate change is therefore of a great deal of value.

The inspiration for this article is drawn from the excellently titled video, which you can find via the link below.

Elon Musk’s Unbelievably Simple 12-minute Killer Break Down on Climate Change

 First of all, Elon Musk displays a very good knowledge of the carbon cycle and how it is being knocked into disequilibrium by the extraction and burning of fossil fuels.

carbon 2

Towards the beginning he has a very sharp breakdown of the problem, which you can find below.

“It’s really quite simple. We’re taking billions of tonnes of carbon that’s been buried for hundreds of millions of years and is not part of the carbon cycle, taking it from deep underground and adding it to the carbon cycle. The result is a steady increase in the carbon in the atmosphere and in the ocean.”

I find the graph below which shows that carbon has gone into an almost vertical climb since the industrial revolution very instructive for laying out the nature of the problem.

CARBON 3

This was followed by my favourite section of the video which centred around the inevitability of the transition to renewable forms of energy. The question is, will this be drawn closer because of the constraints that climate change imposes?

carbon 4

I thought it was interesting that when Elon was talking about technologies to power the sustainable energy era he mentioned nuclear alongside hydro, solar, wind and geothermal forms of energy. Which aligns with my own perspective, which is that in areas not on geological fault lines, nuclear power makes a lot of sense.

Elon’s perspective on the hidden subsidy behind carbon emitting activities is welcome. These activities place costs on the environment and society that unless corrected are not paid for. This is not how healthy markets function. This subsidy to the fossil fuel industry could amount to $5.3 Trillion according to the IMF.

Elon’s suggestion for a non-partisan revenue neutral carbon tax was a very interesting idea and was the first time I have heard of such a proposal. This would mean that only those using a high level of carbon would pay an increased level of taxation.

I was surprised by Elon’s belief that the 2°C warming will be exceeded with the only question being whether it is considerably higher than that. This shows how far politicians are from reality with commitments made at the Paris conference to limit warming to 1.5°C, but these are not being backed up with ambitious measures to reach this goal.

What you need to know

This article looked into Elon Musk’s perspective on climate change.

I think the most striking outcome of the Elon Musk video was his passion for a revenue neutral carbon tax. This is interesting as he could have easily used it as an opportunity to plug electric vehicles or solar power as the solution as he has businesses interests in these areas.

A carbon tax sounds like a very smart idea to move progress towards sustainable energy at a faster rate. I am however pessimistic about the level of debate that is occurring on this issue as you don’t see this being debated anywhere. The revenue neutral nature of it would make it less of a partisan issue.

In conclusion then, Elon’s perspective on this important issue was interesting and different to what I would have expected.

Next week is Climate Week so If you are hosting your own affiliate events or attending the main event in New York, I hope you have a great time and change some people’s perspectives on climate change.

Thank you for reading,

By Barnaby Nash

Please share your thoughts in the comments section below or reach out to me on social media. What do you think about the possibility of a carbon tax?

Let’s stay connected

I can be reached on LinkedIn and on Twitter @FollowBarnaby

MARGINS & SUSTAINABILITY

This article looks into margins and sustainability. Margins matter. They are the lifeblood of all businesses and everybody within an organisation should be made aware of how important they are.

sky

A lot of people who are passionate about sustainability make the connection that because it involves a focus on energy efficiency and the resources that are entering and exiting a business that this would be good for the economic health of the company.

There are a number of high-profile studies that verify that this is the case. I came across a paper by Boston Consulting Group recently that I found particularly interesting. Their 2017 paper Total Societal Impact: A New Lens for Strategy serves as the point of departure for this article.

I think that instances of support for sustainability and corporate responsibility are particularly important when they come from mainstream and established sources such as Boston Consulting Group. It works to highlight that we are operating in a new paradigm.

Their study found a link between Environmental Social & Governance  performance and margins. This held across a number of industries.

In consumer-packaged goods gross margins were 4.8% higher for the top sustainability performers when compared to the median performers.

In biopharmaceuticals margins were 8.2% higher for the top performers on expanding access to drugs when compared to the median performers.

I thought this was a strange one, but their findings even showed that in oil and gas top performers on health and safety had margins 3.4% higher than the median performers.

In financial services, margins were 3.4% higher for top performers on environmentally responsible sourcing when compared to the median performers.

What you need to know

This article looked into margins and sustainability through the lens of the 2017 Boston Consulting Group paper.

What this shows is, is that for business leaders concerned about margins, that an organisational focus on sustainability is a good way to ensure success in this area.

Margins matter and sustainability matters. So, it is fruitful that a link was found between these two important areas.

Thank you for reading,

By Barnaby Nash

Please share your thoughts in the comments section below or reach out to me on social media. What do you think about the link between margins and sustainability?

Let’s stay connected

I can be reached on LinkedIn and on Twitter @FollowBarnaby

THE HIDDEN COSTS OF RENEWABLE ENERGY

This article looks into the hidden costs of renewable energy. As we bring this series which has looked into the hidden costs of driving, coal power, natural gas and nuclear power to a close, it was only right that we look into the hidden costs of renewable energy.

renew

This is especially important at a time when the UK has recently opened the world’s largest windfarm.

In the 2017 work Drawdown edited by Paul Hawken, they revealed that onshore wind was the 2nd most effective activity to combat climate change and offshore wind was the 22nd most effective activity. So this is clearly an important arena that needs to be investigated, to see if there are any hidden costs.

Again, this article takes as its point of departure, the 2009 Hidden Costs of Energy study by the National Academy of Sciences.

Renewable energy has a number of advantages over its fossil fuel and nuclear rivals. Because no fuel is involved, no gases or other contaminants are released during the operation of a wind turbine.

However, their study did identify hidden costs in potentially adverse visual and noise effects, and the killing of birds and bats. With that being said, wind-energy plants do not kill enough birds to cause population-level problems, except perhaps locally and mainly with respect to raptors. The authors do caveat their study with the warning that if the number of wind-energy facilities continues to grow, bat and perhaps bird deaths could become more significant.

Another important outcome of their study was their finding that for the effects of solar and biomass generation of electricity, they saw no evidence that these sources currently produce adverse effects comparable in aggregate to those of larger sources of electricity.

What you need to know

This article looked into the hidden costs of renewable energy.

We looked into the advantages of wind energy, which is an exceptionally clean source of electricity.

We looked into some of the hidden costs of wind energy, which include visual and noise disruption as well as hazards for birds and bats. Overall, the benefits of this technology considerably outweigh the costs.

We looked into the National Academy of Sciences paper, which could find no hidden costs for biomass or solar power, which is even more reason to back these technologies.

Thank you for reading,

By Barnaby Nash

Please share your thoughts in the comments section below or reach out to me on social media. What do you think about the hidden costs of renewable energy?

Let’s stay connected

I can be reached on LinkedIn and on Twitter @FollowBarnaby

 

THE HIDDEN COSTS OF NUCLEAR POWER

This article looks into the hidden costs of nuclear power. This is a power source which is fraught with controversy. Some will argue that it is indispensable to a sustainable future, others say that it has no place in a sustainable energy mix.

nukes

As this series which looks into the hidden costs of driving, coal power and natural gas continues, it is important that we look into this controversial power source.

Again, we use the National Academy of Sciences landmark paper Hidden Costs of Energy as our point of departure.

In the U.S. and the UK nuclear accounts for over 20% of these countries energy needs. France, who have a very aggressive nuclear power strategy generate over 75% of their energy from nuclear power. Even at the lower end this is a major power source and its hidden costs should be investigated.

What is clear in the National Academy of Sciences literature review, is that damages associated with the normal operation of nuclear power plants are quite low compared with those of fossil-fuel-based power plants. This does however exclude the possibility of damages in the future from the disposal of spent fuel, which introduces some risks.

The main risks and hidden costs of nuclear power emerge in the lifecycle phase. Chief among these is that if uranium mining activities contaminate ground or surface water, this could expose the public to radon or other radionuclides through ingestion. However, these risks materialise in the country where the uranium is mined, not where the nuclear power plant is located.

One thing that the study made clear is that low-level nuclear waste does not pose an immediate environmental, health, or safety hazard. The process of storing it until it decays to background levels mitigates this risk.

The study also highlighted that for spent nuclear fuel, if full-cycle, closed-fuel processes that recycle waste and enhance security were developed, this could further lower risks.

The authors also point out that a permanent repository for spent fuel and other high-level nuclear wastes is the most contentious nuclear-energy issue. They recommend that considerably more study of the external cost of such a repository is warranted.

What you need to know

This article looked into the hidden costs of nuclear power.

What should be obvious, is that when nuclear power plants are operating normally, they introduce few hidden costs.

They do however introduce risks via the uranium mining activities and if the plants cease to operate in a normal way.

Thank you for reading,

By Barnaby Nash

Please share your thoughts in the comments section below or reach out to me on social media. Do you think nuclear power has a role to play in a sustainable future?

Let’s stay connected

I can be reached on LinkedIn and on Twitter @FollowBarnaby