Innovations in Biodiversity Management by Erb Institute

Erb Institute Report No. 143 | White Paper

Innovations in Biodiversity Management

Innovations in Biodiversity Management By Mary Fritz, Andrea Kraus and Kristine Schantz

By Pierre Dalous (Own work), via W.C.

Creating a sustainable world through the power of business

Erb Institute Report No. 143 | White Paper

Executive Summary

lobal biodiversity loss is accelerating, and most businesses rely on biodiversity or ecosystem services, at some level, for key inputs. Ecosystem degradation and destruction threaten supply chains and reputations. Companies are utilizing public-private partnerships to quantify and mitigate this risk, and those at the forefront are striving toward net positive ecosystem solutions. A systems approach is necessary to adequately address the inherent complexity. This paper discusses themes highlighted by participants in Innovations in Biodiversity Management, a roundtable meeting facilitated by the World Environment Center and IBM in March 2014. We examine the complexity surrounding biodiversity as a strategic sustainability issue, report on ways that companies are reacting to global diversity loss and innovating toward solutions, and raise open considerations for further exploration. The Innovations for Biodiversity Management roundtable brought together representatives of nine Fortune 100 companies—AECOM, DuPont, General Motors, IBM, Ingersoll Rand, International Paper, Roche, Walt Disney, and Weyerhaeuser—in the Rainforest Alliance’s headquarters in New York City. The event was sponsored by IBM, hosted by the Rainforest Alliance, and facilitated by Dr. Terry F. Yosie, CEO and President of the WEC, with our assistance as WEC/ Erb Institute Fellows.

About the Authors

ary Fritz, Andrea Kraus and Kristine Schantz participated in a fellowship coordinated through the Erb Institute and the World Environment Center (WEC), sponsored by IBM. WEC’s Innovations for Environmental Sustainability Council brings together senior leadership from leading private sector companies, government agencies, non-governmental organizations, and universities. These thought leaders discuss the role of business in developing solutions to global sustainability challenges and exchange strategic concepts, data analyses, and best practices.

Mary Fritz is a Consultant with Agora Partnerships. Mary is interested in financing for innovative business models focused on sustainable impact. While at the Erb Institute, Mary interned for Wello and Ford Motor Company, completed a master’s project with REI and MAP with Acumen, and was a member of the Social Venture Fund and Erb Student Advisory Board.

Andrea Kraus is interested in urban development that enhances both equitable abundance and environmental wellness. As part of her studies, she is working under NOAA to design adaptation strategies and communications tools to help city planners in the Great Lakes build resilience against extreme, unpredictable weather. Prior to joining Erb, Andrea worked for both the Peace Corps in Panama and Siemens in Germany.

Kristine Schantz joined the Erb Institute after nine years of community economic development work in Sub-Saharan Africa. She believes in complementary and collaborative action to address human issues, and is particularly interested in the intersection of business and social development.

Innovations in Biodiversity Management

The Problem

istorically, business concern with ecosystems and biodiversity has centered on reputational risk. As global ecosystems continue to decline, however, and as headlines about habitat loss, pollinators, invasive species, and mass extinction become commonplace, business leaders are becoming increasingly aware that companies are reliant on ecosystems for key inputs. At the Innovations in Biodiversity Management event, David Tulauskas of General Motors quipped, “Biodiversity is the original supplier.” While awareness of the importance of biodiversity is growing in the business community, there is well-established general agreement amongst scientists that global biodiversity is declining at an accelerated rate (although the scale of loss is a subject of fierce debate). According to The Economics of Ecosystems and Biodiversity (TEEB), a global initiative focused on drawing attention to the economic benefits of biodiversity, the direct pressures on biodiversity include habitat loss and degradation, climate change, pollution, over-exploitation, and the spread of invasive species. While it is mostly accepted that these pressures are largely anthropogenic and driven by economic forces, the economic value of preserving biodiversity is less clear. Leading companies understand that it is time to start actively addressing this issue, and realize that qunatifying the value of biodiversity is an important step to doing so. But the way forward is muddled by deep, system-wide complexity.

By Nhobgood Nick Hobgood via W.C.

Biodiversity is the most complex facet of an environmental sustainability strategy for several reasons. First, to move beyond inherent value toward economic value, we talk about biodiversity in terms of ecosystem services: a relatively new field in which the details of how to financially value the contributions that ecosystems provide to society and business are far from finalized. Second, as new science emerges, we are continuing to develop our understanding of how biodiversity supports humanity. Third, biodiversity cannot be understood in isolation from other sustainability issues. And finally, the biggest biodiversity impacts usually occur far upstream at the raw resource tiers of a value chain—meaning that downstream companies struggle with a lack of control. But as Edan Dionne, Director of Corporate Environmental Affairs for IBM mentioned, we can use the intricate nature of the subject to our advantage: “Biodiversity is an important metric to really understand this planet—we have a lot of one-dimensional metrics, but this one captures complexity.”

The Science of Biodiversity and Ecosystem Services

iodiversity means the variety of life, including variation among genes, species, and functional traits. It is most commonly measured in terms of richness, the number of unique life forms in a given ecosystem or area. Ecosystem functions are ecological processes that control the fluxes of energy, nutrients, and organic matter; ecosystem services are the benefits those functions provide to humanity. The Millennium Ecosystem Assessment laid out a common framework for how ecosystem services support human well-being (shown at right). What is less clear is how the biodiversity in a given ecosystem specifically impacts the way that ecosystem functions, and therefore the services that system provides. A 2012 metaanalysis by Cardinale et al. shows what we know. Ecosystem function: Biodiversity is important for efficiency in resource capture, biomass production, and nutrient cycling. Biodiversity increases ecosystem stability, and diverse Figure 1: Millennium Ecosystem Assessment, 2005. Ecosystems and Human Well-being: Biodiversity Synthesis.

Erb Institute Report No. 143 | White paper

communities are more productive. Finally, biodiversity impacts are nonlinear; ecosystem change increases with loss. Ecosystem services: Scientists generally agree that biodiversity either directly influences or is strongly correlated with particular services. Increased interspecific diversity increases commercial crop yields, wood production, and grassland production. Biodiversity also stabilizes fishery yields, increases plant resistance to pathogens and exotic invasion, and increases carbon sequestration. Some commonly assumed benefits of biodiversity are unproven. There is mixed evidence regarding biodiversity impacts on long term carbon storage, pest control, and animal disease. Additionally, there is insufficient data regarding biodiversity in fisheries yields and flood regulation, and no relationship has been found with regards to biodiversity and water purity. Because these links are still being explored, the economic value of biodiversity in these circumstances is particularly difficult to tease out. Additionally, there is insufficient data regarding biodiversity improving fishery yields or flood regulation. To optimize ecosystems for economic production such as farming and timber harvesting, we have greatly simplified the structure, composition, and functioning of those systems—losing biodiversity to monoculture. This has increased land capacity for specific production while simultaneously reducing ecosystem ability to perform regulating services such as nutrient cycling, which is likely to reduce future productivity. It is very important to consider such tradeoffs when planning for the future.

Biodiversity Mangement Strategies

he March 2014 Innovations for Biodiversity Management roundtable brought together the perspectives and experiences of leaders from diverse industries on how biodiversity management fits into their companies’ business strategies. Dr. Terry F. Yosie, roundtable facilitator, opened the meeting with a request for participants to share what they sought from the conference and also what had moved the represented companies to dedicate human and financial resources to discussing biodiversity. The responses varied, but four points were high on everyone’s priority lists: 1. 2. 3. 4.

To learn more about the business case for biodiversity management; To gain a deeper understanding of other companies’ biodiversity strategies; To explore new synergistic partnerships; To determine how to integrate biodiversity into existing company sustainability goals.

The panels that followed included an overview of the latest scientific research by the Rainforest Alliance, facilitated discussions about value creation through enhanced biodiversity, and presentations by several companies about their individual biodiversity management strategies: International Paper, a global leader in B2B packaging and paper, regards biodiversity management primarily as a supply chain issue. Securing fiber for their products is a key priority. Additionally, as their downstream, consumer-facing customers are increasingly prompted to quantify their ecological footprint by environmentally conscious consumers and regulation, they turn to International Paper for specific sustainability-related sourcing data. While “biodiversity” has not been explicitly mentioned within these footprint questionnaires, International Paper is choosing to stay ahead of the curve by anticipating how to best quantify their impact. Forest Stewardship and Sustainability Manager Sofie Beckham named tracking the impact of their efforts over long time horizons and balancing shifting market forces brought on by an increasingly digital society as some of their most significant challenges. By Careyjamesbalboa (Carey James Balboa) [Public domain], W.C.

In 2013, International Paper

Innovations in Biodiversity Management announced a public-private partnership with the National Fish and Wildlife Foundation, titled the Forestland Stewards initiative. Through a gift of $7.5 million over a five-year period from International Paper, the project is designed to protect and restore more than 200,000 acres of forests that result in better water quality and strengthened populations of important fish and wildlife.1 Walt Disney was unique in that it was the only company present at the conference whose corporate philosophy and brand identity were, in part, explicitly founded upon its commitment to wildlife. Conservation Director Anne Savage stressed the importance of biodiversity as key to Disney’s value proposition. Disney’s awareness of its reliance on cultural ecosystem services is reflected in the four pillars of its sophisticated conservation strategy:2 1. Inspire conservation by creating opportunities for children and families to discover, experience and support nature; 2. Save habitat by protecting ecosystems in collaboration with leading nonprofit organizations; 3. Provide financial support to animal and conservation projects through the Disney Worldwide Conservation Fund; 4. Deliver excellence in animal programs, including cooperative breeding programs with other zoological facilities. According to Disney’s 2010 citizenship report, its long-term goal is to have a net-positive impact on ecosystems. In the meantime, its approach involves reducing its environmental impact via a self-imposed CO2 tax and various energy efficiency strategies.3 These are bold steps in terms of incorporating environmental strategy into its everyday operations and decision making, demonstrating the extent to which biodiversity management can be integrated into a global corporation’s business strategy so long as the business case has been established and communicated both externally and internally. AECOM provides technical and management support services to a broad range of markets, including transportation, energy, water, and government. Its focus at the WEC conference was urban biodiversity. AECOM Senior Toxicologist and Vice President, Lisa Bradley, spoke of opportunities in improving brownfield remediation. By enhancing the ability of its clients to better manage hazardous waste sites, AECOM is able to maximize the natural recovery system that biodiversity makes possible in resilient sites such as wetlands. Bradley cited the importance of demonstrating measurable habitat benefits and reflecting these benefits on clients’ financial balance sheets as a key challenge to the advancement of urban biodiversity. AECOM’s Landscape & Biodiversity report, produced by its Design + Planning group, includes key habitat indicators and points out the need for systems-oriented planning efforts that demonstrate biodiversity “enhancement” in addition to minimizing negative impacts. Although IBM has not yet identified biodiversity as a key issue in terms of materiality relating to its own operations, the company’s Director of Corporate Environmental Affairs, Edan Dionne, highlighted some of the ways in which IBM is providing technology solutions to clients that are building up their own biodiversity management strategies. In 2011, IBM was contracted by the Brazilian government to digitize information on Amazonian biodiversity via ‘citizen science.’ IBM’s solution came in the form of Wikiflora, a portal that allows students to upload their photos of Amazonian plants, enter specific characteristics, and classify the plants after comparing them against the existing catalog of photos. IBM sees particular importance in tracking insects as a crucial bioindicator, and is in the process of determining how to tackle this type of complex monitoring.4 Weyerhaeuser is one of the

“Lewis and Clark River 2148s” by Walter Siegmund (talk) - Own work. W.C.

Erb Institute Report No. 143 | White paper

world’s largest private owners of timbers, as well as one of the largest manufacturers of wood and cellulose products. Weyerhaeuser’s 2020 Sustainability Roadmap recognizes the importance of the ecosystem services that its timberlands provide to the planet and its business. Using the Millennium Ecosystem Assessment’s four categories of ecosystem services, Weyerhaeuser developed a measuring and reporting plan against a comprehensive set of 18 ecosystem services that its forests provide.5 Weyerhaeuser’s Vice President of Sustainable Forests & Products, Cassie Phillips, stated that one of the challenges is balancing the costs and benefits of measurement efforts. Given the importance of financially sound strategies within a competitive marketplace, it’s important for Weyerhaeuser and other businesses to find ways to track biodiversity indicators using existing data. The above strategies constitute only a portion of the private sector innovations that were presented and discussed at the conference. Businesses realize they cannot yet turn to regulatory guidance or undisputed scientific information for black and white instructions on how to manage biodiversity, and are therefore working to create their own strategic approaches. There was also general excitement about “next generation” biodiversity thinking, including biomimicry, moving from “harm reduction” to net positive environmental strategies, and systems-planning via cross-industry partnerships.

Open Considerations

ollaborative forums such as the WEC roundtables highlight both the collective and unique nature of addressing biodiversity in business practices. While our current challenges are shared, each industry is motivated by differing strategic goals, and each business develops approaches to address specific biodiversity concerns of interest. As humanity grapples with biodiversity loss and an evolving environmental landscape, the private sector will be called upon to play an increasing leadership role in undertaking practices which both preserve and restore precious natural resources. Several key considerations are worth noting for businesses integrating biodiversity into their environmental sustainability portfolio.

1. Making the business case The business world itself operates as an ecosystem of actors and resources which interact with one another based on strategic interests and mutual benefits. Responses to the biodiversity challenge vary greatly across sectors and businesses based on the resources most essential to their long term success. For example, given the consumer-facing status of the Disney brand, the active and deliberate conservation of wildlife must be a part of its corporate strategy. As a global timber supplier, in contrast, Weyerhaeuser is driven by its dependence on a sustainable natural resource. For a company to garner stakeholder and shareholder support for the integration of biodiversity into business operations, it must understand and communicate which aspects of biodiversity are most integral to its success. By approaching this issue with a sense of shared value, businesses can align economic and environmental interests, and ensure that efforts extend beyond short term corporate social responsibility gestures to become integral to their long term wellbeing.

2. Working with and through the unkown—a systems approach

By Rob Young from United Kingdom via W.C.

The natural world is complex, and humans make it more so. In the current anthropocene reality, in which human activity continues to significantly impact natural ecosystems, science also continues to change relative to biodiversity. For example, it is unclear whether increased biodiversity improves ecosystem capacity to regulate flooding. Additionally, despite its status as the world’s leading body of experts, the Intergovernmental Panel on Climate Change (IPCC) labels its findings with ‘low,’ ‘medium,’ or ‘high’ confidence.6 Uncertainty can fuel political debate and divide decision makers, further polarizing environmental issues rather than promoting shared value and common interests. Within this context, it is difficult for businesses to take action to address biodiversity with certainty and in a manner that satisfies all

Innovations in Biodiversity Management

stakeholders. The IPCC outlines multiple strategies for preventing ongoing biodiversity loss, including the reduction of greenhouse gas emissions to reduce climate change impacts and prevent further ecosystem degradation. As a society, we are tasked with making decisions based on imperfect information, and the topic of biodiversity is no different. The most effective business leaders will undertake immediate action based on the best information available to address today’s biodiversity concerns and will update those strategies as additional information arises.

3. Complementary action No single business or industry is equipped to tackle today’s complex environmental challenges, and the IPCC calls for a multi-faceted approach which considers the interaction of multiple dynamics across all levels. In developing strategy that is relevant to the needs and strengths of each business, there is opportunity for collaborative and complementary action in addressing biodiversity. Forums such as the WEC roundtables create exchange between not only leading private sector entities, but also public sector and nonprofit organizations. Together these actors can leverage a wide range of talents and resources; for example, the Rainforest Alliance uses its expertise in environmental issues and local partnerships to collaborate with a number of companies, providing consumer product certification representing environmental, social and economic sustainability.7 Efforts like these allow all actors to draw from a larger pool of resources to create innovative solutions addressing today’s biodiversity issues.

Rainforest Alliance Guatemala via W.C.

4. Bringing it home As the business context becomes increasingly global and our environmental concerns shared, it is important that biodiversity issues be viewed as collective. No region is isolated from the actions of others, and our current environmental outlook includes disproportionately negative impacts in certain, often less developed, regions of the world.8 In light of this, institutions advocating for environmentally, socially, and economically sustainable production practices in other regions of the world should strive for the same production standards here at home, and domestic industry sent overseas should be held to global—rather than local—standards. U.S. businesses hold the potential to lead the world in undertaking practices to preserve a safer, healthier, and productive future for all of the world’s citizens.

“Slum and dirty river” via W.C.

Conclusion

iodiversity loss must become a strategic consideration for long term business success. Despite the challenges inherent in addressing biodiversity conservation, companies are adopting unique and innovative strategies that align environmental and economic interests. As the science and environmental landscape evolve, the business world will be tasked with making the best use of available information in designing collaborative action to ensure resilient ecosystems that support the wellbeing of all.

Erb Institute Report No. 143 | White paper

Innovations in Biodiversity Management

Endnotes 1. National Fish and Wildlife Foundation. <http://www.nfwf.org/forestlandstewards/Documents/forestland_ stewards_fact_sheet_13-0306.pdf> 2. Disney. 2010 Corporate Citizenship Report: Nature Conservation. <hhttp://corporate.disney.go.com/ citizenship2010/natureconservation/overview/ourapproach/> 3. Disney. 2010 Corporate Citizenship Report: Environment. <http://corporate.disney.go.com/citizenship2010/ environment/overview/ourapproach/> 4. Wong, Kristine. GreenBiz.com “How IBM helps monitor biodiversity in the Amazon” February 18, 2014. <http://www.greenbiz.com/blog/2014/02/18/how-ibm-helps-monitor-biodiversity-amazon> 5. Weyerhauser. Sustainability: Ecosystem Services. Updated July 3, 2013. <http://www.weyerhaeuser.com/ Sustainability/Planet/SustainableForestry/EcosystemServices> 6. http://ipcc-wg2.gov/AR5/images/uploads/WGIIAR5-TS_FGDall.pdf 7. http://www.rainforest-alliance.org/green-living/shopthefrog?country=93&province=136 8. http://www.ipcc.ch/report/ar5/wg2/

Photos 1. By Pierre Dalous (Own work) [CC-BY-SA-3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons 2. By Nhobgood Nick Hobgood (Own work) [CC-BY-SA-3.0 (http://creativecommons.org/licenses/by-sa/3.0) or GFDL (http://www.gnu.org/copyleft/fdl.html)], via Wikimedia Commons 3. By Careyjamesbalboa (Carey James Balboa) [Public domain], via Wikimedia Commons 4. “Lewis and Clark River 2148s” by Walter Siegmund (talk) - Own work. Licensed under Creative Commons Attribution-Share Alike 3.0-2.5-2.0-1.0 via Wikimedia Commons - http://commons.wikimedia.org/wiki/ File:Lewis_and_Clark_River_2148s.JPG#mediaviewer/File:Lewis_and_Clark_River_2148s.JPG 5. By Rob Young from United Kingdom (Rainforest Biome @ Eden Project) [CC-BY-2.0 (http:// creativecommons.org/licenses/by/2.0)], via Wikimedia Commons 6. Rainforest Alliance Guatemala at en.wikipedia [CC-BY-SA-3.0 (http://creativecommons.org/licenses/bysa/3.0/), GFDL (http://www.gnu.org/copyleft/fdl.html), CC-BY-SA-3.0 (http://creativecommons.org/licenses/ by-sa/3.0/) or CC-BY-2.5 (http://creativecommons.org/licenses/by/2.5)], from Wikimedia Commons 7. “Slum and dirty river” by meg and rahul - Flickr. Licensed under Creative Commons Attribution 2.0 via Wikimedia Commons - http://commons.wikimedia.org/wiki/File:Slum_and_dirty_river.jpg#mediaviewer/ File:Slum_and_dirty_river.jpg

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