February 27, 2014

It Just Got Easier for Companies to Invest in Nature

Nature is valuable. But figuring out how valuable has been challenging. By some measures, the services that nature provides business and society — clean water, food and metals, natural defense from storms and floods, and much more — are worth many trillions of dollars. But that number is not helpful to companies trying to assess how dependent they are on natural resources, or how to value them as business inputs.

fishery%2C%20iStock_000004498767XSmall.jpg

In recent years, many large companies have realized that they need to get a handle on these issues, and that doing it well creates business resilience. But figuring out what steps to take has been challenging. Into that void steps a new, very helpful tool, the Natural Capital Business Hub. The Hub is a project run by the Corporate EcoForum, The Nature Conservancy, and The Natural Capital Coalition (and built by Tata Consultancy Services). It builds off a partnership launched at the Rio+20 summit in 2012 with companies such as Alcoa, Coca-Cola, Disney, Dow, GM, Kimberly-Clark, Nike, Unilever, and Xerox. At the time, they produced a report with case studies showing how companies have managed natural capital issues. The Hub expands that effort, making much more information available and searchable.

The Hub basically does four things:

The case studies are ostensibly the core of the site. Project managers, facility heads, executives who make capital decisions, sustainability managers, and many others can learn from the work that leading companies have done already. Managing natural capital is a young field, but Dow, for example, is now three years into its six-year partnership with The Nature Conservancy to “recognize, value, and incorporate the value of nature into business decisions, strategies and goals.” (The company just released the latest update on the partnership.) The Hub is a place to start your research and learn from Dow and many others.

On the site, you can find stories of completed projects or prospective collaborations that need more partners to get off the ground. In the first category, you’ll find stories like the one about Grupo Bimbo, the Mexican food company that owns Sara Lee, Hostess, and Pepperidge Farms. Bimbo needed to manage stormwater around a site in Pennsylvania. Using natural or “green” infrastructure such as rain gardens and forest buffers — versus “gray”, manmade systems like retention ponds and pipes — the company reduced ongoing operating costs and avoided the complications of burying pipes in sensitive ecosystems.

On a somewhat larger scale, consider Darden restaurants (owner of Olive Garden, Red Lobster, and many more) and its efforts to save fisheries. As companies like Unilever and McDonald’s have long recognized, ensuring healthy fish stocks isn’t a philanthropic nice-to-have, but core to business survival: no fish, no fish sticks, lobster plates, or Filet-O-Fish sandwiches. Darden is working with the National Fish & Wildlife Foundation and others to target valuable fisheries and manage them closely.

What’s interesting about the Darden case study, and the Hub in general, is that this project is just getting started — essentially, it’s an open call for collaboration. The Hub is innovative and helpful because of the partnership tools. Natural capital issues are not easy and cross many lines – every company, city, and home in a region, for example, depends on water and flood protection. No organization or region can act alone, and it shouldn’t. By listing the major collaborations that are actively searching for new partners, the Hub has done a great service.

(This post first appeared on the Harvard Business Review blog network.)

(Sign up for Andrew Winston's blog, via RSS feed, or by email. Follow Andrew on Twitter @AndrewWinston)

Post A Comment

(If you haven't left a comment here before, you may need to be approved by the site owner before your comment will appear. Until then, it won't appear on the entry. Thanks for waiting.)