Ecosystem - Conservation International

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Nov 6, 2013 (3 years and 9 months ago)

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Business &
Sustainability
Council
Meeting
June 27, 2012
Hosted by Rabobank
International
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Vic Arrington
Senior Vice President,
Conservation International
Ian Reece
Managing Director, Senior Credit Officer,
Rabobank International
Welcome and Introductions
3
Global Population Increases …
206,500 Daily
Another
Philadelphia
Every Week
Source: U.S. Census Bureau
4
And by mid
-
century,
the world will be home to
3+ billion more people.
5
In
50 years,
the world
will need
100% more
food than we produce
today.
Source: Science Magazine, 2005
6
7
The Natural Capital Declaration
Declaration by the financial sector
demonstrating our commitment at
the Rio+20 Earth Summit to work
towards integrating Natural Capital
considerations into our financial
products and services for the 21
st
Century.
8
The Importance Of Natural
Capital

Natural Capital comprises Earth’s natural assets (soil, air,
water, flora and fauna), and the ecosystems services
resulting from them, which make human life possible.
Ecosystems goods and services from Natural Capital are worth
trillions of US dollars per year and constitute food, fiber, water,
health, energy, climate security and other essential services for
everyone. Neither these services or the stock of Natural Capital
that provides them are adequately valued compared to social and
financial capital. Despite being fundamental to our wellbeing, their
daily use remains almost undetected within our economic system.
Using Natural Capital this way is not sustainable. The private
sector, governments, all of us, must increasingly understand and
account for our use of Natural Capital and recognize the true cost
of economic growth and sustaining human well being today and
into the future.
9
Our Commitment At The Rio+20
Summit
1.
Build an understanding of the impacts and dependencies
of Natural
Capital
relevant to our operations, risk profiles, customer profiles, supply
chains and business opportunities.
2.
Support the development of methodologies that can integrate Natural
Capital
considerations into the decision making process of all financial products
and services
-
including loans, investments and insurance policies.
3.
Collaborate, when appropriate, with the international Integrated
Reporting Committee
and other stakeholders to build a global consensus
around the development of Integrated Reporting, which includes Natural Capital
as part of the wider definition of resources and relationships key to an
organization’s success.
4.
Work towards building a global consensus for the integration of Natural
Capital
into private sector accounting and decision
-
making; supporting, when
appropriate, the related work of the TEEB for Business Coalition, and other
stakeholders.
By endorsement of this declaration, we wish to demonstrate our
commitment to the eventual integration of Natural Capital
considerations into private sector reporting, accounting and decision
making, with appropriate and adequate standardization of
measurement and disclosure of Natural Capital use by the private
sector.
10
Robert F. Kennedy
The Gross National Product does not
allow for the health of our children, the
quality of their education or the joy of
their play. It does not include the beauty
of our poetry or the strength of our
marriages, the intelligence of our public
debate or the integrity of our public
officials. It measures neither our wit nor
our courage; neither our wisdom nor our
learning; neither our compassion nor our
devotion to our country; it measures
everything, in short,
except that which makes life worthwhile.
11
The Ethical Choice
Support responsible, food
production systems that
allow us to produce the
food we need in the US and
around the globe using
fewer natural resources.
12
Working Together Towards A
Sustainable Future…
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Best in Class
Recommendations:
The Economics of
Ecosystems &
Biodiversity for
Business (TEEB)
Conrad Savy &
Marielle Weikel
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What is TEEB?

Global study to analyze the economic
benefits of biological diversity and its loss

Launched in 2007 by G8, hosted by UNEP

Study lead is CI board member Pavan
Sukhdev

3 phase process to gather knowledge on
BES, create guidance on risks and
opportunities, and facilitate regional studies
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What did TEEB produce?
Reports for distinct end
-
users:

ecologists and economists

international and national policy makers

local and regional policy

citizens

business
What did TEEB recommend for Business?
Identify Impacts
and
Dependencies
Assess Risks
and
Opportunities
Set Targets, Measure
& Value Performance,
and Report
Take Action
-
Avoid, Minimize,
Mitigate Risk
Grasp Emerging
Opportunities
Integrate
Actions with
CSR initiatives
Engage Peers
and
Stakeholders
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What’s next for TEEB?
TEEB for Business Coalition:

Standards

for valuation of natural capital and
externalities

Global alignment

commitment to action,
internalize externalities

A common platform
-
for convergence and
collaboration of current and future initiatives
TEEB for Brazil:

Business
-
case for healthy ecosystems

Guidance on managing BES risk & seizing
opportunities

preliminary report released June
2012

Model for replication in other regions
How Are Companies Implementing
TEEB Recommendations?
Focus on Fresh Water
How are companies measuring & reporting
water performance?

Disclosure of water risks is
increasing

Disclosure on water performance
is growing, but still limited

Ex: Royal Dutch Shell discloses setting
variable remuneration measures for its
executives based on achieving internal
sustainability indicators, including fresh
water use

Limited quantitative data and
performance targets

Ex: BHP Billiton’s five
-
year target to
improve the ratio of water the company
recycles relative to the high
-
quality water it
consumes by 10 percent
Source: CERES, Clearing the Waters, 2012.
How are companies valuing water?
Vale in Brazil

CI
-
Brazil & company studied
range of ecosystem services
provided by company’s private
reserves (RRPN) in the state of
Minas Gerais

Monetary valuation for water
use services provided by one
reserve alone (Corrego Seco)
valued at ~USD$1.8 million

Corrego Seco is important
water supply for a nearby city
(Itabirito)
What are the emerging opportunities?
Water markets

US Wetland Banking

annual market worth USD
$1.1

1.8 billion, 20
-
30
percent of supply developed
by large corporations,
including energy & pipeline
companies

Payment for watershed
services

growing
government and voluntary
markets worth annually over
USD $5 billion and projected
to nearly double by 2020
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Panel: Putting ecosystem service
valuation into practice
Cary Krosinsky
Senior Vice President, North America, Trucost
Antonio ValleNeto
Carbon Manager, US and Canada, Environmental
Markets, Bunge Limited
David Warne
Assistant Commissioner, Bureau Water Supply, New
York City Department of Environmental Protection
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Scope 3
Scope 2
Scope 1
Supply chain emissions across sectors
Greenhouse gas emissions in tCO
2
e across the MSCI World (Source: Trucost)
Becker Underwood
-
Supply Chain
Puma’s EP&L

4 Tiers of Supply
Chain
Manufacturing:
Apparel, shoes and accessories
Tier 1
Tier 3
Tier 4
Tier 2
Outsourcing:
Embroiderers, printers, outsole
producers
Processing:
Tanneries, chemical companies, oil refiners
Raw materials:
Cotton farming, oil drilling
PUMA

Efficiency & Innovation
-
key drivers of
outperformance going forward

beyond
Transparency & Awareness

Resource constraints & Population Growth

supply & demand

Naked Value

Growing investor interest in understanding
who will be best positioned to seize the
opportunities & manage these risks
Future Considerations
Newsweek 2010 Green Rankings: Global
Results
Newsweek Top 100 Equally Weighted
-
5.00
--
5.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
45.00
9/01/2009
9/08/2009
9/15/2009
9/22/2009
9/29/2009
10/06/2009
10/13/2009
10/20/2009
10/27/2009
11/03/2009
11/10/2009
11/17/2009
11/24/2009
12/01/2009
12/08/2009
12/15/2009
12/22/2009
12/29/2009
1/05/2010
1/12/2010
1/19/2010
1/26/2010
2/02/2010
2/09/2010
2/16/2010
2/23/2010
3/02/2010
3/09/2010
3/16/2010
3/23/2010
3/30/2010
4/06/2010
4/13/2010
4/20/2010
4/27/2010
5/04/2010
5/11/2010
5/18/2010
5/25/2010
6/01/2010
6/08/2010
6/15/2010
6/22/2010
6/29/2010
7/06/2010
7/13/2010
7/20/2010
7/27/2010
8/03/2010
8/10/2010
8/17/2010
8/24/2010
8/31/2010
Newsweek 100
S&P500
Newsweek 2010 Green Rankings:
Performance
200 years old Agribusiness company, worldwide.
Major changes in the last 40 years. More in the next 40.
Ecosystem Services are vital to us and food safety.
Political scenario is/will be challenging.
Bunge has a team 100% dedicated to the ES markets.
ES Market is the solution we see to address scarcity.
200+ projects to date….
One of them: Florestal Santa Maria, 70k ha REDD
announced this month: 30M tons / 30 years, BEM gave
technical and financial support.

19 reservoirs; 3 controlled lakes

Serves 9 million people (1/2 of
population of New York State)

Delivers approx. 1.1 billion
gallons per day

Source of water is a 2,000
square mile watershed in parts
of 8 upstate counties

Rural, mountainous watershed

78% forested, low population,
significant agricultural uses

Shallow soils and porous rock
produce high quality water

Unfiltered
NYC Water Supply System
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Sonal Pandya
-
Dalal
Senior Advisor, Corporate Leadership
Strategies, Conservation International
Daniela Mariuzzo
Corporate Social Responsibility
Manager, Rabobank International Sao
Paolo
Tools and Techniques for Managing
Business Risks and Opportunities
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Pros

Good first tier review
of major impacts and
dependencies

Prioritizes ESs for
further review
Cons

Scoping of business
risks and opportunities
too general.
Ecosystem
Services Review
U
nderstanding what
you should care about
Pros

Integrates price/costs
into business decisions

Logical next step from
ESR
Cons

Technical staff and
time required.

Detailed data sets
required for full analysis
C
orporate
E
cosystem
V
aluation
V
aluing dependencies to
help make better decisions
Ecosystem Service
Value over 30 years
Wildlife Habitat
US$ 2.9 million
Hydrological regulation
US$ 470,000
Carbon Storage
US$ 26.8 million
Net Benefits of Conservation
US$ 17.3 million (net of all costs)
Pros

Not much data required

Out put of modeling and
mapping analysis
Cons

InVEST
is simplistic and
not ideal for arid regions

Neither mesh easily with
existing corporate
processes
ARIES and InVEST
U
nderstanding tradeoffs
through simulation modeling
Convergence
C
onclusions and a note
on an emerging trend

Invest in the day after tomorrow

Sustainable Banking
Daniela Mariuzzo
Head of CSR Brasil
June 27, 2012
Rabobank International
40
5. Develop
strategies
4. Identify
business risks
and
opportunities
3. Analyze
trends in
priority
services
2. Identify
priority
ecosystem
services
1. Select the
scope
Steps in the Corporate Ecosystem
Services Review
-
ESR
41

Worldwide leadership role F&A

Awareness of responsibility

Developed a CSR policy applicable to
all commercial activities in Brazil
ESR Scope
1. Select
the
scope
42
2005: The beginning of Rural Bank in Brazil
Types of Vegetation
Rabobank

s offices in the

field

Tropical Rainforest
Caatinga
Savannah,

Cerrado

Marsh
-
Lands,

Pantanal

Atlantic Forest
Prairies

São Paulo

Rondonópolis
Uberlândia


Barreiras

Rio Verde

Brasília
Ribeirão Preto

Patos de Minas


Chapadao Sul
Varginha

Cuiabá
Lucas do
RV


Tangara


Araçatuba
1. Select
the
scope
43
Ecosystem: our business activities highly
depend on Cerrado biome
´
s services














2. Identify
priority
ecosystem
services
Savannah,

Cerrado

Priority ES provided by Cerrado
2. Identify
priority
ecosystem
services
Agriculture
Genetic
Resources
Freshwater
Air
quality
Climate
regulation
Waterflow
regulation
Disease
and
Pest
mitigation
Pollination
Erosion
control
By the way, this is our business
45
From being
one of the
villains of
global
warming,
farming
could now
become one
of the
victims.
3. Analyze trends
in priority
services
DEGRADED
Air quality regulation
Local / regional climate reg
Erosion regulation
Water purification
Pest mitigation
Pollination
Trends in the Ecosystems Services
Global climate
regulation
ENHANCED
Coffee crop in 16/09/2008, T < 32C
Global warming effects on crops
production

Global Warming and Future Scenarios of Brazilian
Agriculture

, Eduardo
Assad and Hilton Silveira
Pinto, 2008
3. Analyze trends
in priority
services
13 days later, 29/09, T = 33
o
C

Global Warming and Future Scenarios of Brazilian
Agriculture

, Eduardo
Assad and Hilton Silveira
Pinto, 2008
Global warming effects on crops production
3. Analyze trends
in priority
services
Current Scenario
2020 Scenario
2050 Scenario
9,48%
Losses in R$ millions
Low risk areas
882
17,1%
Losses in R$ billions
Low risk areas
1,6

Global Warming and Future Scenarios of Brazilian
Agriculture

, Eduardo
Assad and Hilton Silveira
Pinto, 2008
Coffee Arabica Scenarios
3. Analyze trends
in priority
services
Risk management allows encountering sustainable business opportunities…
Identify business risks and
opportunities
Sustainable
Business
Opportunities
Managing
Sustainability
Risks
PAST
PRESENT
FUTURE
Screening, evaluating and
controlling risks can be a
good way to discover and
develop new sustainable
business opportunities
4. Identify business
risks and
opportunities
Our local CSR Policy, Exclusion Criteria 11 and 12 are nice exemples
…Business opportunities in fields such as technology and knowledge
Technology
Knowledge
Investment
Sustainable Business Development in
Western Bahia
EXEMPLE
River beds and Legal
Reserve Reforestation
&
Avoided Deforestation
and Degradation

Seeds

Trees
nurseries

Pesticides

GPS
/
Mapping

Evaluating
degradation

Planting

Training
personnel

Reducing
arable
land

Buying
seeds

Planting
trees

Monitoring
for
at
least
2
years

Refraining
new
deforestation
4. Identify business
risks and
opportunities
The Golden Delta Project
...And produces potential products/services

some of them already tradable
Carbon
credits
from
reforestation
Carbon
credits
from
REDD+
Increasing
Biodiversity
Improving
water
quality
Sustainable Business Development

The Golden Delta

Invest in the day after tomorrow

Thank you!