Whether it is the ecosystem services that support the conditions for life, the natural resources necessary for the creation of products, or the business costs resulting from droughts, floods, reduced air and water quality or climate-related threats, business must be willing to explore investing in nature to protect its bottom lines. This begins by protecting and investing in valuable areas — like national parks and wilderness areas.
Protected areas can often present a plethora of business opportunities. These areas can have both intrinsic and commercial value, and may bear an economic cost of notprotecting them — either resulting from the downstream effects of biodiversity loss or, more directly, from investing in practices that destroy these areas.
To many, business has long been seen as a barrier to the sustainable use of natural resources. In reality it can be a key to the solutions. By factoring in the true costs of its activities and investing in natural capital, business can thrive in the long term while maintaining the intrinsic value of nature. Business leaders who see these opportunities are now coming together to act through platforms like The B Team and NatureVest, to show that business and protected areas can, and should, thrive side by side.
The prevailing attitude, that conserving ecosystem services must come at a cost to economic development, has done much damage to the way governments, business and civil society value these areas, and it still lingers — though many in the business community recognize that protecting special areas can often contribute to economic development.
Doing so can sometimes be prohibitively difficult, but the business community can drive protection of special areas by fostering the actions required to protect them. We need to demonstrate and celebrate examples of adaptive business practices that successfully conserve natural areas. The Long Run Initiative, for example, assigns economic value to conservation through profitable and responsible tourism. It has fostered a business model that helps its constituent members to conserve important ecosystems for posterity, while supporting improved livelihoods locally and sustainable economic development more broadly.
Another great example of the challenge and opportunity faced is currently found in one of the world’s most beautiful, and most threatened places. Virunga National Park, in the Democratic Republic of Congo, is Africa’s oldest park. It is home to four million people living within a day’s walk, as well as the largest remaining group of mountain gorillas and numerous other endangered species.
It also sits atop large reserves of crude oil — oil that some European oil companies are eyeing. But, in Virunga as in many other precious natural areas, the old ‘extract, plunder and forget’ model is not the only way.
Many who live near Virunga depend on healthy fish stocks for food and employment — a sustainable local fishing industry could be worth over US $60 million a year. Their homes, schools and hospitals could be powered by 100MW of potential hydroelectric power. This could in turn lead to more agro-industrial development: investors are already interested in purchasing hydro-power for the local production of palm oil, soap and papaya enzyme. Not to mention the tens of millions of dollars potentially generated from eco-tourism itself.
The plan to sustainably develop Virunga National Park, already underway thanks to the work of the Virunga Alliance, demonstrates how protected areas can and should support the long term sustainable development of the communities around them — and the critical role for business to play in helping them do so. If this can happen in the Democratic Republic of Congo — a nation rich in natural resources, but racked with internal conflict and extreme poverty — then it can happen anywhere.
Analysis from Credit Suisse has found the “large unrealized potential” of conservation finance, and has identified a $300 billion gap that could be filled with private sector investment — saving these ecosystems while delivering returns for investors.
Some of these innovative approaches to sustainable financing for, and from, protected areas, will be discussed at the IUCN World Parks Congress opening in Sydney, Australia next week. The Congress is a once-in-a-decade global forum on protected areas, and a great opportunity for business leaders to bring solutions to the table.
Business leaders must appreciate the real dependencies of their business on nature, and the impacts their activities have on it. They must be willing to account and pay for what nature provides to their businesses and, by investing in natural infrastructure, businesses can protect the full values provided. A more accurate understanding of the true cost to businesses that their environmental activities bear, will provide the incentive to pay nature for her contribution.
The World Bank President Jim Yong Kim has called this ‘natural capital’ accounting “one important new metric in the global toolbox” to address climate change, poverty eradication and economic development. Kering and PUMA have published the true cost of the environmental impacts of PUMA’s business activities across its supply chain in their ‘Environmental Profit & Loss’ (E P&L) statement, now being rolled out across all Kering’s brands. Natura has estimated the value of natural capital and impacts in its supply chain — assessing potential money savings and environmental impacts at the same time.
This is the way forward for business — a market for conservation that takes into account the true cost of a business’s activities, while promoting the right/broader incentives to invest in protected areas at the same time.