The Corporate Ecosystem Services Review (ESR) is a structured methodology for corporate managers to proactively develop strategies for managing business risks and opportunities arising from their company’s dependence and impact on ecosystems.

Companies depend on the services that healthy ecosystems provide such as freshwater, wood, genetic resources, pollination, climate regulation, and natural hazard protection. Degradation of these “ecosystem services,” therefore, can pose a number of risks to corporate performance as well as create new business opportunities.

Unfortunately, many companies often fail to make the connection between the health of ecosystems and their bottom line. The ESR builds on existing environmental management systems and due diligence tools by:

• Looking beyond issues of pollution and natural resource consumption
• Addressing dependencies and impacts companies have on the natural environment
• Considering business opportunities, not just risks
• Coupling economic and environmental issues
• Providing a framework for stakeholder engagement
• Enabling use of environmental risks and opportunities for more innovative corporate strategy

Companies applying the ESR have realized a number of business benefits such as:

• Identifying new business risks and opportunities arising from a company’s dependence and impact on ecosystems and the services they provide.
• Framing and giving added urgency to risks or opportunities previously identified by management.
• Anticipating new markets and influencing government policies that will emerge in response to ecosystem degradation.
• Strengthening existing approaches to environmental impact assessment by filling gaps traditional due diligence tools may not consider.
• Improving stakeholder relationships by improving understanding of how stakeholders value different services coming from the same ecosystem.
• Demonstrating leadership in corporate sustainability by proactively addressing the degradation of ecosystem services

The ESR can support various businesses decisions and processes including:

• Corporate business unit, or market strategy development
• Planning processes for corporate infrastructure projects such as mines, wells, pipelines, plantations, and facilities
• Identification of new markets, products, or services
• Identification of new revenue streams from corporate landholdings
• Investments in projects or companies
• Policy-maker engagement strategies
• Environmental impact assessments
• Environmental reporting

Examples:

• Mondi: Europe’s largest producer of office paper used the ESR to develop several new strategies for dealing with the ecosystem service challenges to their FSC certified South African plantations. Mondi is improving water efficiency by more aggressively clearing invasive species. They are also developing efforts to better match tree species to site conditions, utilize more water-efficient tree strains as they become available, and conduct prescribed burns more often.

• Syngenta: The global agribusiness company chose one of its growing customer segments, farmers in southern India, as the scope for its road test. The company identified a number of possible opportunities to help farmers either reduce their impacts on ecosystems or adapt to ecosystem change. Examples include: increasing pollinators in the region by selling natural seed mixes, selling bees, or offering assistance through extension services; using the company’s in-depth knowledge of plants to offer farmers an improved integrated pest management system; and engaging the company’s foundation and external research institutions to fill gaps in information about the status and trends of ecosystem services critical to agriculture.

• The tourism industry in Australia benefits from the recreational and ecotourism services provided by the Great Barrier Reef. In 2003, tourism industry associations engaged the Australian government to expand the network of marine sanctuaries within the reef in order to protect and increase the ecosystem’s ability to sustain the industry into the future. Their efforts paid off. In 2004, the government implemented a new zoning plan that expanded the “green zones”- where commercial and recreational fishing are banned- from 5 percent to nearly 33 percent of the reef.

• Markets continue to grow for wood products, seafood, and other goods that are certified as grown and harvested in a manner that sustains an ecosystem’s ability to provide a variety of services. The global market for wood and paper certified by the Forest Stewardship Council exceeded $5 billion in 2006, a 67 percent increase over three years. For the year ending March 31, 2007, the global retail value of Marine Stewardship Council-certified seafood was $509 million, more than double that of the previous year.

See ESR Tools page to download the guidelines and related documents.

Tools to conduct an ESR:

• The Corporate Ecosystem Services Review is a set of guidelines for developing strategies to manage the business risks and opportunities arising from a company’s dependence on ecosystems and the services they provide.

• The Dependence and Impact Assessment Tool (Excel, 414 Kb) is a spreadsheet that guides managers through a series of questions to identify the ecosystem services that are most likely to be sources of business risk or opportunity.