The landmark Millennium Ecosystem Assessment—the most far-reaching ecological study ever undertaken, conducted by over 1,300 scientists around the world—found that 60 to 70 percent of environmental functions, such as natural water purification and flood protection, are being degraded faster than they can be recovered. The private sector, its customers and its suppliers rely on many of these services for consistent supply, business continuity and consumer purchasing power. BSR took on the challenge of identifying and evaluating financial mechanisms that can be applied to these services in order to capture their value through new environmental markets.
BSR's Research & Development team conducted a due diligence process with numerous stakeholders, nearly all of whom identified “reaching ecological limits” as a key megatrend that should frame our efforts. We then worked to identify cutting-edge approaches to environmental management, focusing on the emerging field of Payments for Ecosystem Services, also known as “Environmental Markets.” We shared our findings in BSR reports and external publications and formed the Environmental Markets Initiative Working Group with five oil and gas companies that provide both financial support and thought partnership. Through this working group, we researched the emerging landscape of new financial mechanisms and published a "Corporate Manager’s Resource Guide to Environmental Markets." In addition, the group will assess the utility and future design of new tools for environmental service identification and valuation. In 2008, the working group will expand its scope of work to include demonstration projects with individual companies, in-depth research into select environmental service markets, and dialogue with policy-makers to ensure a business voice in designing smarter regulation.
BSR's Environmental Markets Initiative has contributed key empirical research through interviews with hundreds of global experts, produced quantitative analyses of market growth, mapped the various initiatives from different sectors and geographies, and facilitated partnerships to align agendas and avoid duplicative work. This demonstrates BSR’s capability to develop highly innovative cross-sector collaborations that leverage the resources of corporations, academia, and governmental institutions.
Based on current trends, we predict that corporate investments in ecological infrastructure will become core strategies for leadership companies within the next five years. By becoming a leading organization in this space, BSR is able to help companies anticipate this new generation of corporate environmental strategy.