The New Business Imperative: Valuing Natural Capital
- Topic: Economic
Prioritizing ecosystems within business strategy will in turn cut costs, reduce risks, enhance brand and reputation, and grow revenues.
O’Meara, Amy, Simmons, P.J., and Lapinski Michelle. (2012). The New Business Imperative: Valuing Natural Capital. The Corporate Eco Forum and The Nature Conservancy.
Twenty-four major companies representing over $500 billion in combined revenues have agreed to incorporate ecosystems and biodiversity into their business strategies. The initiative is organized by the Corporate Eco Forum and The Nature Conservancy. This open-source e-report illustrates the tangible value that nature provides and features 24 new commitments by participating companies. It also outlines a practical action framework and highlights the best-available tools for companies wishing to follow suit.
- Avoid supply chain and operational disruptions caused by scarcities of natural resources.
- Reduce threats to business continuity and harm to facilities, workers and communities in places vulnerable to extreme weather, flooding, drought, fires, desertification or resource scarcity.
- Stay ahead of impending regulatory changes that could limit product or production choices.
- Avoid fines, suspensions, lawsuits or other liabilities due to over-exploitation or contamination of natural systems, and improve relationships with local communities and host governments.
- Avoid damage to corporate reputation and brand.
- Discover new ways to slash expenses and increase margins, as reducing ecosystem impacts helps reveal opportunities to boost resource productivity and increase energy efficiency.
- Save money by reducing waste and recapturing valuable materials that otherwise could harm ecosystems.
- Avoid costly manmade “gray infrastructure” expenses by opting instead for “natural infrastructure” investments in restoration of healthy forests, wetlands, watersheds and coastal ecosystems — often the cheaper and more effective long-term solution.
- Explore natural solutions to cut costs on stormwater management, flood mitigation, air quality management, carbon sequestration, water purification and climate-related threats.
- Postpone or avoid cost increases due to rising resource scarcities by investing in sustainable sourcing practices.
Enhance brand and reputation
- Win trust and loyalty from growing ranks of customers that value sustainability leadership.
- Differentiate brand from competitors by communicating superior purchasing, operating or investment practices.
- Draw and retain top talent, as a growing number of employees value working for a company with a culture and values they share.
- Attract investors and lenders who increasingly factor companies’ environmental performance and exposures into their decisions.
Fuel revenue growth
- Win sales by meeting customers’ growing demands for products and services that do no harm to sensitive ecosystems.
- Create new revenue opportunities by innovating solutions that alleviate pressure on the environment or restore healthy ecosystems.
- Exploit opportunities to educate consumers about high-performance sustainable products to increase demand and create new market segments.
- Leverage emerging “natural capital” markets such as water-quality trading, wetland banking and threatened species banking, and natural carbon sequestration.