A User’s Guide to the Planet
IPS, 15 July 2005 – The world’s ecosystems are failing, forcing business and industry to “green” themselves or suffer the consequences.
Businesses, both large and small, are dependent on services provided by ecosystems and those ecosystem services are changing, according to a new report, “Ecosystems and Human Well-being: Opportunities and Challenges for Business and Industry”.
“We have destroyed some ecosystems and lost the services they provide,” said Steve Percy, retired CEO of the oil company BP America, and one of the report’s co-authors. “This report is a wake-up call for business and industry — the ecosystem services they depend on are being eroded,” Percy told IPS.
The report is one of several Millennium Ecosystem Assessment (MA) synthesis reports released this year. It is based on an unprecedented, four-year scientific assessment of the Earth’s ecosystems by 1,360 experts from 95 countries. Those experts have concluded that 15 of the 24 ecosystem ”services” that support life on Earth are being degraded or used in an unsustainable fashion.
And those findings have enormous implications for the world’s business.
Ecosystem services such as seas full of fish or clean water for agriculture that are freely available today will cease to exist or become more costly in the near future if current decline continues, the report says. Not only will costs and risks rise but customer preferences, stockholder expectations and government regulations will all change, says Percy.
For example, with tourism fast becoming the world’s largest employer and the economic dynamo in many developing countries, natural areas will be seen as important assets for companies and countries. That will limit access to raw materials in such areas, the report suggests.
Business will have to change how it does its planning for the future, he says. Traditional accounting and business analyses often fail to value ecosystem services and tend to ignore long-term impacts. However, ignoring the MA findings could jeopardise the future of some operations.
Stock market investors and the insurance industry are beginning to understand these risks and discount the value of companies that are not responding to these changes, he said.
Ecologists and other scientists do not often talk to business and industry leaders and this report, based on the best science available, explains the current trends in business terms, says Jane Lubchenco, a professor of Marine Ecology at Oregon State University.
“Businesses are as dependent on ecosystem services as much as people and need to know how the changes will impact them,” says Lubchenco, a co-author of the report.
An ecosystem is a complex dynamic of plants, animals, microorganisms and their environment — water, air, sunlight — that interact as a functional unit. Those interactions provide services that humans benefit from such as climate regulation, pollination and water purification.
An attempt to engineer these services in the 1991 Biosphere II experiment was an expensive failure. Eight people were to be cut off from the world and live for two years inside a three-acre, high-tech 200-million-dollar greenhouse. Not long after the doors were closed, oxygen had to be pumped in and then shipments of food brought as the engineered ecosystems failed one after another. At a cost of 70 million dollars, the Biosphere II provides a rough estimate of the costs to duplicate what nature provides. And it didn’t work.
Business leaders who have seen the report are “very enthusiastic and see it as a window into the future,” she said in an interview.
“The solutions of the past are often not robust enough under the conditions of global change and need to be re-thought and re-implemented,” Antony Burgmans, chairman of Unilever N.V., a leading consumer products company, said in a statement. Unilever is a financial sponsor of the report.
“The Millennium Assessment is a user’s guide to the planet for long-term thinkers,” says Lubchenco. The “Ecosystems and Human Well-being” synthesis report is an invaluable resource for business leaders in laying out the threats and opportunities that will shape the economies of the future, she says.
And there are many new business opportunities for more efficient or different ways to use ecosystem services and to mitigate impacts.
Markets for carbon reduction credits are opening up as a result of the Kyoto Protocol on reducing emissions of greenhouse gases that cause climate change. The value of this carbon credit trading market is projected to reach 40 billion dollars by 2010.
Aquaculture will boom as the ocean’s fish stocks continue to decline. Public attention to the negative environmental impacts of aquaculture operations means the companies that find sustainable ways to farm marine and freshwater species will have a major competitive advantage, the report notes.
European companies have taken the lead in making money from green industries, but that is starting to change, says Lubchenco.
The General Electric (GE) corporation, the biggest public-traded company in the United States, recently announced a new focus on sustainable technologies. The company already makes solar energy products, low-energy lighting and many other products.
GE understands that they can make money from selling green products because that is what the world needs right now, says Percy.
“There is a broad recognition that companies can be green and make money,” says Steven Guilbeault of Greenpeace Canada. That does not mean corporate polluters such as GE should be let off the hook. They still have to clean up the messes they’ve made and should be closely monitored, Guilbeault told IPS.
There is a growing awareness by the public and government that climate change is real and that ecosystems are in trouble and change is coming. “Business leaders better beware or the market will put them out of business,” he said.
Surprisingly, former oil company CEO Percy echoes the Greenpeace activist’s thoughts: “Things are going to change. I hope people in the boardrooms around the world will read this report,” he said.