The Quiet (R)Evolution in Expectations of Corporate Environmental Performance - Emerging trends in the uptake of ecosystem services
This report lays out the current state of play of the uptake of ecosystem services and describes the emerging activity within the private sector related to integrating ecosystem services into decisions.
Companies face a wide and growing range of issues, from labor through environmental impacts in supply chains, manufacturing, product use, and end of life. The challenge for corporate managers is to assess the relevance of a specific issue, prioritize among issues, and recommend pathways forward. Ecosystem services is a relatively new issue facing companies today. Despite its wonky moniker, it is ratcheting up on stakeholder agendas—most notably in pockets of government and the financial services’ lending sector.
Ecosystem services, which are derived from functioning natural systems, are the multitude of goods and services from which people benefit. They include the natural dynamics that enable reliable flows of clean water, a relatively predictable climate, and the production and maintenance of fertile topsoil in which to grow crops. Many global studies such as the Millennium Ecosystem Assessment (MA) have documented a downward trend in ecosystem services.
For companies, the implication of an ecosystem services analytical approach is simple. The focus would no longer be on the upward or downward direction of individual metrics. Rather, an ecosystem services analytical approach is one that considers not just the individual parts but also the functioning of the whole—that is, how multiple parameters contribute to (or undercut) the ability of a broader ecological system to produce the goods and services that people have come to expect and enjoy.
This issue frame is increasingly being embraced due to concerns about the status of ecosystem services. The signals that ecosystem services concepts are beginning to shape expectations of and even requirements for, the private sector are increasing and include:
- The large body of peer-reviewed material, including the Millennium Ecosystem Assessment (MA), The Economics of Ecosystems and Biodiversity (TEEB) report, and the European Environment Agency’s classification of ecosystem services, has helped establish categories and an overall definition for ecosystem services.
- Some national governments, including those of Colombia, Costa Rica, Spain, the UK, the United States, and Vietnam, are exploring policy mechanisms to restore and maintain ecosystem services and natural capital.
- A small but influential set of financial institutions has put into place requirements to consider ecosystem services within financial due diligence processes.
- A growing number of companies are discussing ecosystem services and testing decision-making aids.
While corporate work on ecosystem services issues is greater than it has ever been before, it is often occurring in a pilot testing way with a focus on a wide range of questions, including:
- How would an ecosystem services-informed approach differ from business as usual and current corporate environmental management processes?
- What is the added value of an ecosystem services perspective relative to existing corporate environmental management practices?
- What ecosystem services metrics should be monitored within corporate management processes? Why and how?
- How would these new ecosystem services indicators and concepts be integrated into existing processes and protocols (e.g., environmental and social impact assessments and life cycle assessments)? At what cost?
While ecosystem services concepts and approaches are gaining advocates, the challenge for companies pivots around if, when, and how to take action.
The aim of this report is to provide a better understanding of the uptake of ecosystem services concepts and the emerging business case for action, of any kind, related to ecosystem services. In issuing this synthesis of the current state of play, BSR’s Ecosystem Services Working Group hopes to deepen understanding of the opportunities and challenges associated with applying ecosystem services concepts and tools in private sector settings as well as to move the field of application forward.