Last week in New York City, I attended a GreenBiz event that brought together corporate executives and thought leaders in the realm of sustainable business. I listened in on an engaging session where several leading companies — including CI partners Coca-Cola and Darden Restaurants — discussed the business case for understanding and valuing natural capital.
The phrase “natural capital” may be a fairly recent addition to business discussions, but what it represents is as old as the Earth itself: the air, water, land and living organisms that provide the goods and services critical for supporting all life on our planet, such as clean air, climate regulation, fertile soil, food and medicines.
Every year, our planet produces an astounding US$ 72 trillion worth of “free” goods and services. I put that word in quotations because as Pavan Sukhdev, an environmental economist and CI board member, has pointed out, “When has a bee ever sent you an invoice?” Insect pollination is worth around $190 billion per year, or around 8% of the planet’s total agricultural output.
However, because we have never before put a value on what nature provides, we are hindering Earth’s ability to sustain current and future generations. As Sukhdev has aptly noted, “We use nature because it is valuable, but we lose nature because it is free.”
Two-thirds of Earth’s natural resources have been significantly damaged by human activity. This translates into a loss of more than $6 trillion every year as soils are eroded, water is contaminated, forests are degraded and lost and fish are overharvested, among other impacts. This figure could increase to a whopping $28 trillion by 2050 and result in even more degraded and lost natural resources unless we quickly and dramatically alter the way we view and use them.
Fortunately, what I heard during this GreenBiz event gives me hope that things are starting to change.
For example, everything Coca-Cola makes is based on water. The company understands the importance and critical link between healthy watersheds and the health of its business. Coca-Cola has set an ambitious goal of replenishing as much water to the environment and communities as it uses in its drinks and operations by 2020.
As part of this commitment, Coca-Cola partners with its bottlers, suppliers and other stakeholders to create and maintain healthy watersheds. Not only does this sort of action improve ecosystem health and ensure the continued supply of water for the Coca-Cola system and for other uses within the watershed, it’s also more cost-effective than trying to improve water quality after the watersheds have become degraded.
In addition, CI and several of our partners have developed and collaborated on tools and approaches to help put a value on nature. For example, we are working with Darden Restaurants — whose popular restaurants include Red Lobster and Olive Garden — and others on the Ocean Health Index, which assesses ocean health and helps inform decisions on the sustainable use of marine ecosystems.
We are also leading and advancing the conversation around the business case for integrating natural capital considerations into companies’ business models, which we covered at last year’s Business & Sustainability Council meeting, a CI forum for companies committed to business and environmental leadership.
It’s no secret that this precious planet we call home and depend on for our survival is in serious trouble. However, I believe we are in the midst of a game-changing moment around valuing our natural capital, with the private sector and organizations like CI leading the way. I am looking forward to seeing how all these conversations and commitments will play out over the next few years as we continually seek to live in harmony with the environment that makes our lives possible.
Jennifer Gerholdt is the senior manager of CI’s Business & Sustainability Council.