TEEB-3 Reiterates Interdependence of Business and Biodiversity

The Economics of Ecosystems and Biodiversity consortium (TEEB) unveiled its third report, The Economics of Ecosystems and Biodiversity – Report for Business (TEEB 3), Tuesday at the first Global Business of Biodiversity Symposium in London. EM’s Becca Madsen attended the event and posted this summary of the proceedings on the Eko-Eco Blog.

13 July 2010 | LONDON | The conference opened with a message from none other than His Royal Highness (HRH) the Prince of Wales, via video message. Prince Charles knows his stuff – he’s familiar with the TEEB, and he added a 4th ‘R’ – Restore – to the traditional Reduce, Reuse, Recycle. He encouraged conference delegates to “…ensure that environmental resilience is at the heart of economic resilience.”

Johan Eliasch (Chairman, Head, and former Special Representative of the Prime Minister of the UK) pointed out that biodiversity loss poses a serious business risk. The conference goals are 1) to celebrate the International Year of Biodiversity and the progress that has already been made; 2) to challenge the conventional ‘running down’ of natural capital; 3) to provide a forum to exchange knowledge, expertise, ideas; 4) to capture feedback and channel it to inform the October CBD COP10.

Plenary Session 1

Experts from business, government, and NGOs spoke on trends in business and future scenarios for business, potential policy developments, etc. Speakers included Tom Albanese (Rio Tinto), Professor Brian Collins (UK Dept for Business Innovation and Skills), Gavin Neath CBE (Unilever), Robert (Bob) Watson (UK DEFRA), and Peter Seligmann (Conservation International).

Highlights from the session:

• Tom Albanese of Rio Tinto, an international mining company, has to address biodiversity issues now if they want to be around in 100 years. First company to adopt ‘net positive impact’ on biodiversity (in 2004).
• Bob Watson emphasized that business both use and impact biodiversity and the cost of doing business could increase as ecosystems are degraded. The business environment is and will be changing with consumer and shareholder expectations. Valuation of ecosystem services is critical. Have to remove perverse subsidies that degrade ecosystem services and put in place incentives that enhance ecosystem services.
• Brian Collins has a challenging task of getting across to other Ministers the complexities of interlinked economic, environmental, and social issues. He pointed out that there needs to be a language for discourse between business and biodiversity actors.
• Gavin Neath of Unilever provided perspective from a business that is reliant on ecosystem services – particularly in terms of agricultural sources of their products. Biodiversity has been a tricky subject for businesses because they often think “What do these little chaps [rare animals and plants] have to do with by business?” For Unilever, their impact on biodiversity is primarily from the negative impacts of monoculture agriculture, so their work on biodiversity is focused on sustainable agriculture. Three examples were given: sustainable tea estates (certified by Rainforest Alliance), and sourcing more sustainably from palm oil (they have committed to buying 100% RSPO certified sources by 2015) and tomato suppliers
• Peter Seligmann of Conservation International noted that his organization recently changed its focus towards ecosystem services provided to people. Collaboration with the private sector (ex – WalMart) and development sector (Gates Foundation) have been paramount to CI’s biodiversity work. Gates Foundation recently saw the link between health and development issues and biodiversity. CI partnered with WalMart seven years ago, and there’s been significant work on sustainability issues within WalMart. Now, you don’t get primary shelf space in WalMart unless its green.

Plenary Session 2

The TEEB for business (TEEB 3) was launched at this session. Pavan Sukhdev (TEEB) and Josh Bishop (IUCN) presented the results of the report and panelists responded to the results. Panelists included: Herman Mulder (TEEB Advisory Board, Worldchanging), Malcolm Preston (PriceWaterhouseCoopers), Vincent Gros (BASF SE), James Sweeting (Royal Caribbean), Genevieve Ferone (Veolia Environment).

Pavan Sukhdev noted that the TEEB project started in 2007, when the Stern report on the economics of climate change came out, and folks in the biodiversity world thgouth ‘we ought to have like this for biodiversity.’ “Nature is largely economically invisible.” In the absence of valuing nature, the trade-off decision-making is heavily weighted towards development or conversion of biodiverse habitats. As an example: the economic value of converting mangroves to shrimp farming may be greater than the ‘invisible’ value of the mangrove’s ecosystem services – unless a shadow value can be put on these services and considered in decision-making.

Josh Bishop is the lead of the TEEB for business report. The report is full of case studies and statistics, and Mr. Bishop’s presentation provided some examples.

A recent PWC survey on business leaders’ knowledge on biodiversity showed varying levels of awareness of biodiversity (value/risks). A study by the UK organization Trucost contributed a study on the cost of deforestation in China (US $12.2 billion) – considering things like property loss from flooding, reduced precipitation, reduced water runoff, etc. Another case study in the report looked at the value of business’ dependence on biodiversity via the story of blueberry crop dependence on pollination services.

Chapter 3 of the report focuses on measuring and reporting biodiversity and ecosystem service impacts and dependence by business. One example: SAB Miller (brewery) set a quantitative target of water productivity (25% by 2015, with a potential savings of 20 billion liters of water per year). Chapter 4 is concerned with how to translate biodiversity risks to business. Chapter 5 turning ecosystem services into a business cash flow (eg – new markets like REDD). What it takes to make markets work is enabling policy: ending subsidies that damage ecosystem services, providing tax credits and other incentives for provisioning ecosystem services, and providing information and transparency on markets. Chapter 7 looks at various standards.

There are activities that business can do today: identify impacts and dependence on BES, assess risks and opportunities; develop BES information systems set targets and measure and value performance; avoid/minimize/mitigate risks; and more.

Plenary Session 3

Rt Hon Caroline Spelman MP (Secretary of State for DEFRA) addressed the conference delegates for the Keynote Address. Despite efforts, the 2010 target for the Convention on Biological Diversity has not been met in the UK [or by any of the signatories of the CBD]. Biodiversity cannot continue to be seen as collateral damage to economic development. The UK is the first country in the world to be conducting a national ecosystem services assessment, which will be released next year.

Deforestation is a global and critical issue. Ms. Spelman touched on deforestation issues related to palm oil plantations and illegal logging, and noted some progress and plans related to sustainable sourcing and the potential of REDD+.

New markets must reflect the value of ecosystem services. “There are some prices that are just too high to pay. It’s imperative that each business examine its own supply chain… The world is going to start pricing natural resources, so if you move into this market early, you will [get a first-mover advantage].”

Panel Debate on the Policy-Practice Divide
A group of panelists spoke to future trends and policy changes required to engage business.

Speakers included Angela Cropper (UNEP), Colin Melvin (Hermes Equity Ownership Services), Michel Mane (Mane Americas), Ravi Sharma (CBD Secretariat), and Ambassador Mauricio Rodriguez Munera (Embassy of Colombia).

Highlights from the session:

• Angela Cropper made multiple points, first that the conference was ‘preaching to the choir’ and more effort needed to be made to engaging the reluctant and skeptical. Additionally, the dialogue on business and biodiversity needs to be more targeted and specific to translate the messages for specific sectors. The development of incentives (specific to sectors) also needs to be speeded up. Reporting on biodiversity indicators should not be voluntary, and consumers need to have this information to make informed choices.
• Ravi Sharma thought that businesses may not have been well-engaged in the CBD in early days, but are and will be engaged more and more. The new 2020 CBD targets will be more focused on specific sectors (eg – agriculture, fisheries). As well businesses will be one of the stakeholders in the development of national strategies for the upcoming 2020 CBD targets.
• Colin Melvin spoke as a representative of investors. He explained that investors can be a major barrier to companies adopting sustainability principles because of their emphasis on short term profits. But on the other hand, investors can push companies to adopting sustainability principles – which we see with some pension funds. The UN Principles for Responsible Investment (UNPRI www.unpri.org) has $20 Trillion in investment committed to the principles.
• Michel Mane explained that his company designs flavors and fragrances, a small industry ($30-35 million industry) that is largely self-regulated. Debate on the loss of biodiversity should be placed in both the scientific domain and the entrepreneurial domain.
• Ambassador Mauricio Rodriguez Munera spoke about the biodiversity of the country of Colombia. Colombia has a national biodiversity policy, created in the early 1990s. Colombia is tenth in the world in the Environmental Performance Index 2010 conducted by Yale University. One request regarding the Nagoya summit: “Colombia hopes the participant States support the conclusion of negotiations and adopt a protocol of access to and fair distribution of the biodiversity benefits in the world.”

Issei Tajima, Senior Vice-Member of the Environment from the Government of Japan, spoke on the topic ‘Towards Nagoya, COP10.’ This year is an important year for people around the world to address biodiversity issues. One of the activities that the Government of Japan intends is to create a new strategic plan to meet the new 2020 CBD target. The engagement of the private sector is of utmost importance. An interesting anecdote – the bullet trains of Japan have an aerodynamic ‘nose’ based on the beak of the Kingfisher bird.

Becca Madsen Becca Madsen is the Biodiversity Program Manager at Ecosystem Marketplace. She can be reached at [email protected].

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