Former Manager, BSR
Of the engineers among us, who has ever woken up and said, in the words of my former colleague George Basile, “Today, I am going to design a bridge that ignores gravity!”
You wouldn't do it. Your bridge would not stay up for long.
Like gravity, the functions of nature also have dynamics and underlying principles. And if we undercut those principles and ignore relationships within ecological systems, there will be consequences.
Unfortunately, unlike the clarity of gravity (let go of something, and it will drop), when the laws of nature are undermined, the consequences are not always immediate or proximal. So the impacts can be difficult to perceive.
Consider the issue of fertilizer run-off from farms along the Mississippi River. Many farms contribute what may be relatively small inputs of fertilizer into that mighty river. But these inputs add up, becoming significant problems as they run downstream into the Gulf of Mexico. Now, the Gulf has a seasonal situation in which the nutrients from the fertilizer diminish the oxygen levels in the water, causing algal blooms that affect fish populations, which in turn undercuts family incomes and local economies in the Gulf that rely on fishing.
Predicting where, when, and how we will breach certain ecological “thresholds”—or points that trigger issues to arise (the “gravity law,” if you will)—is challenging, but more tools are becoming available. We now have computer modeling that allows us to consider how natural dynamics are likely to play out over time under various management scenarios. In effect, ecosystem services computer models are helping us see and predict dynamics in nature, and there is hope that we will be able to do so as clearly as we can see and predict the effects of gravity. Some of these models include Microsoft’s first prototype of a Global Ecosystems Model (GEM) with its Madingley Model, as well as the Stanford University-WWF-TNC InVEST models, and the University of Vermont, Conservation International, Earth Economics, and the Basque Center for Climate Change’s ARIES model, among others.
Even as the knowledge base grows, this kind of systems thinking is seldom applied within corporate decision-making processes. Every day, we design, make, distribute, and sell products that ignore individual and cumulative effects on the structure and function of ecosystems, the integral role of biodiversity, and the flow of ecosystem services.
Corporate decision-makers and investors expect that it will all work out—that the water needed to operate our manufacturing facilities will continue to be available from underground aquifers and that seawater will maintain a consistent temperature range so that we can use it to cool our energy plants. We expect a lot of the natural environment—and those expectations are usually met. When they are not, we blame it on an exceptional situation.
But what if the exception becomes the rule? What if every actor in society—including corporate decision-makers—must start to think of biodiversity and ecosystem services in the same category as we consider gravity?
Some companies are already taking these natural laws as seriously as the average person considers gravity. Puma is incorporating impacts associated with the environment into its operations. In Puma's 2011 sustainability report, CEO Franz Koch stated: “We established the first-ever environmental profit and loss account, which puts a monetary value on the impacts the sourcing, production, marketing, and distribution of Puma products have on the environment.”
By doing this, Puma is asking how much the company would owe the planet for the services it “leases” to Puma, and how much Earth would charge the company to clean up the pollution and damage Puma leaves behind. It is a measurement innovation that the company hopes will help drive corporate and ultimately product innovation.
While it’s new for companies to account for environmental impacts in profit and loss statements, the ideas that this activity is seeking to inspire are already being applied, and have been for years, even if they are not widespread—witness approaches like design for the environment (DfE), cradle to cradle thinking, and biomimcry.
In a recent article, GreenBiz Executive Editor Joel Makower pointed out that we need more action. “Despite the seeming flurry of commitments and activity, companies’ efforts aren’t addressing planetary problems at the scale, scope, and speed they demand,” he wrote. “At best, we’re treading water. At worst—well, all bets are off.”
In other words, we are not operating as if natural capital has the same demands as gravity.
Gravity is an unkind time-keeper, as demonstrated in the bridge example. Biodiversity and ecosystems are often perceived as more generous with their time, as in the Mississippi River example. But that is changing as impacts accumulate and there are more stresses on ecological systems—as is increasingly well-documented in the Millennium Ecosystem Assessment (MEA), the TEEB (the Economics of Ecosystems and Biodiversity) reports, and the work of the Inter-governmental Platform on Biodiversity and Ecosystem Services (IPBES).
In business, it is common to hear that the world is shrinking. In ecology, it is common to hear that there is no “away,” where you can throw waste or create damage and ignore it. Both sentiments are true. And both indicate that the time is now for companies to start factoring in (and ultimately designing out) many of their impacts—including on biodiversity and ecosystem services.
Net positive impact is an aspirational goal that can, and increasingly must, drive innovation. It is being spurred on by growing government attention to biodiversity and ecosystem services around the world. Investors are also pulling out their own magnifying glasses, as many now factor ecosystem services impacts and dependencies into due diligence processes, such as the World Bank’s International Finance Corporation (IFC) and the 76 Equator Banks. This government attention combined with investor and private sector applications as well as advocacy on the issues are introducing their own gravitational pull. And this “gravity” will have its own set of dynamics in the coming years that business will need to mind.
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