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Business Council Releases Ecosystem Valuation Guide

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The World Business Council for Sustainable Development (WBCSD) in Geneva, Switzerland released today its Guide to Corporate Ecosystem Valuation (CEV), to help businesses better understand the benefits and value of ecosystem services like fresh water, food, fiber, and natural hazard protection. The CEV guide can be downloaded free of charge from the WBCSD Web site.

The guide, according to WBCSD, provides a framework to help companies consider the actual benefits and value of the ecosystem services they depend upon and impact. The CEV guide also provides new information and insights to include in business planning and financial analysis. It is expected to support better business decision-making by creating a better alignment between the financial, ecological, and societal objectives of companies.

The CEV guide helps businesses account for the full value of ecosystem impacts and inputs, including benefits linked to assets and costs associated with ecosystem loss. This accounting links ecosystem service opportunities and risks more directly to a business’s core operations, supply chain, and financial bottom line.

The guide identifies five types of risks and opportunities related to biodiversity and ecosystems:

  • Operational, increased scarcity and cost of raw materials
  • Regulatory and legal, public policies like taxes and moratoriums on extractive activities
  • Reputational, relationships and image from media and NGOs
  • Market and product, consumer preferences
  • Financing, availability of capital

With these measurements and estimates, says WBCSD, companies can improve their decision-making by undertaking corporate ecosystem valuation to quantify business risks and opportunities. Enterprises can also develop new markets for ecosystem services and eco-efficient goods, services, and technologies. Plus, companies can engage their supply chain partners, and enter into local partnerships to further these objectives.

One example of corporate ecosystem valuation is the $190 billion per year estimated contribution of insect pollination to agricultural output, made by the 2010 Economics of Ecosystems and Biodiversity study. This amount is about eight times Walmart’s 2010 operating income.

WBCSD cautions that the guide is a framework for improving corporate decision-making, and not a cookbook or calculator, nor a stand-alone methodology. However, it offers a set of resources to navigate through related jargon and techniques.

WBCSD is a global coalition of some 200 companies promoting progress on sustainable development. Its mission is to be a catalyst for innovation and sustainable growth in a world where resources are increasingly limited.

Read more: HSBC Takes Climate Change Research to the Bank

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