Paul Suff reports on how a project in New Zealand to assess the health of ecosystems is producing benefits
Much of New Zealand's economy, from food production to tourism, depends on the health of its ecosystems. The country's Sustainable Business Council (SBC) has been working with local businesses through its ecosystem health programme to help them understand their dependencies and impacts on ecosystems and how these affect their business strategy and resource use.
Penny Nelson, the SBC's executive director, says the project, which runs to 2016, aims to help organisations integrate an ecosystem approach into their business management. "It uses tools, guides, case studies and presentations to encourage businesses to think about biodiversity and ecosystem issues," she explains.
Tooling up
To assess the ecological impact of an organisation's activities five leading businesses in New Zealand have been using the corporate ecosystem services review (ESR) tool developed by the World Resources Institute and the World Business Council for Sustainable Development. At a conference in March to showcase the early results, representatives of the five organisations championed ESR and the insights derived from using it.
Allyn Glaysher, general manager of human resources and corporate affairs at Aotearoa Fisheries, the Mori-owned seafood business, told delegates that the ESR had revealed previously unknown evidence of decreasing kelp in parts of the Marlborough Sounds. This alga is essential for the survival of pua, a species of large, edible sea snails that are a key product for the business.
In another use, Marta Karlik-Neale, a sustainability consultant at engineering and environment consultancy AECOM (formerly URS), reported that the tool provided evidence that soft-engineering solutions, such as green roofs and living walls, rain gardens, and swales and wetlands, were generally preferable to conventional infrastructure because of the multiple benefits that arise (see case study panels).
Engaging businesses
SBC has partnered with New Zealand's department of conservation and Landcare Research, one of seven crown research institutes in the country, on the programme, which was developed after the council hosted a conference in Wellington on valuing nature in 2013. Pavan Sukhdev, study leader on the TEEB report, The economics of ecosystems and biodiversity, told delegates that businesses should measure the externalities of their operations, and manage, disclose and reduce them.
After the conference, the council decided to find companies in six major sectors in New Zealand to act as champions in the business community to gain a better understanding of their dependence and impacts on ecosystem services, says Nelson.
Agreement was struck with organisations in five - agriculture, power generation, infrastructure, fishing and an SME. Aside from Aotearoa Fisheries and AECOM, the project involved: Archeus, an SME producing natural skincare products, mainly for export; Contact, one of the country's largest electricity generators and retailers; and dairy cooperative Fonterra. Nelson says they were selected because of they are leading companies in key sectors of the economy. All five completed their ESRs by the end of 2014, and more SBC members will undertake a review using the tool this year and in 2016.
Under the five-step ESR process (see panel, top right), businesses identify the key ecosystem services for their operations by evaluating their degree of dependence and impact on a range of different services. The tool then guides them through an analysis of the conditions or trends in the priority ecosystem services, as well as drivers that significantly influence the trends. The next step is to evaluate how trends can have an impact on the company, either as risks or opportunities. Finally a strategy to manage those risks and opportunities is developed.
Making an impact
Suzie Greenhalgh, portfolio leader at Landcare Research, which worked with each of the five organisations on their reviews, describes the ESR as a scoping tool for firms to think about their impacts and dependencies in terms of ecosystem services. "ESR is there to open people's eyes to see what is really important," she told the gathering in March to discuss the outcomes from the pilots. According to Greenhalgh, the ESR process had been very effective in engaging internal and external stakeholders on natural capital issues. "It was reassuring that people found the concept of ecosystem services was relatively easy to understand," she said. Greenhalgh also highlighted how the ESR could provide useful insights for the businesses at relatively little cost.
Craig Griffiths, community relations manager at Contact, said positive engagement with people inside and outside the organisation had been a key benefit of ESR: "The programme allows you to ask people to evaluate your business performance. We got some great insight." Glaysher also highlighted the tool's potential to improve engagement and talk with communities that companies tend not to reach: "We talked to some people who had been in the Marlborough Sounds for a long time and they said they had noticed the change in kelp. They were the people we engaged with as we went through the ESR process. It demonstrates what an effective tool the ESR is in getting people to discuss things."
Griffiths reported that the ESR pilot had cost Contact about NZ$50,000, mostly on the 16 employees who worked 433.5 hours. He also highlighted how the energy company was planning to use the ESR framework to embed sustainability, mainly by helping it move to a material aspects approach in its business, including its reporting.
Meanwhile, Sean Goddard, biodiversity manager at Fonterra, told delegates that the ESR had helped the organisation move beyond focusing on reducing its impacts to looking at the opportunities, the value of investments and improving ecosystems. Similarly, Karlik-Neale said the ESR differed from the usual assessment of impacts because businesses have to focus on how they depend on nature.
AECOM (formerly URS)
AECOM (formerly URS) provides engineering and environmental services globally. Its New Zealand arm is a long-standing member of the Sustainable Business Council. The company saw the potential for the corporate ecosystems services review (ESR) process to enhance the three features of its internal 3i programme - innovation, integration and involvement - by encouraging cross-disciplinary thinking and cross-sector cooperation with clients, regulators and other stakeholders.
The project ran from the end of 2013 until mid-2014 and was confined to the services offered to the firm's water sector clients in Auckland. It focused on freshwater issues, global and regional climate change, natural hazard mitigation, and regulation of water timing and flows. New Zealand academic papers on ecosystem valuation and ecosystem classification, international literature on green infrastructure, and case studies from AECOM experts in the UK were used to the review conditions and trends. A key risk identified by the study was the increasing costs of infrastructure related to supplementing or substituting ecosystem services, such as freshwater, water purification or natural hazards mitigation. Climate models for Auckland predict heavier rainfall but also more frequent droughts. These changes will put pressure on existing infrastructure, perhaps damaging it. As a result, the costs of infrastructure upgrades and maintenance are likely to rise. The review found that ecosystems-based solutions, such as green infrastructure to manage storm water at source, could reduce those costs and generate additional benefits, including improved air quality and noise mitigation.
AECOM says the review confirmed the business case for applying an ecosystem services framework in the water sector. Now it plans to support regulators and its clients to incorporate this way of thinking into their planning and infrastructure design. The company intends using the results of the project to increase awareness of ecosystem-related risks and opportunities.
Aotearoa Fisheries
Aotearoa Fisheries is the largest Mori-owned seafood company. Its Prepared Foods division is the biggest processor of pua - the Mori name for abalone, or edible sea snails. The firm acknowledges that ecosystem change driven by climate change and erosion presents risks to its pua business. It used the corporate ecosystems services review (ESR) tool to examine the operational issues facing the production of wild pua in the marine environment.
The ESR identified trends, risks and opportunities across three selected ecosystem services. The general manager of human resources and corporate affairs at Aotearoa Fisheries, Allyn Glaysher, said the most significant finding, which was unknown to the company, was the serious kelp loss in the Marlborough Sounds, at the north of New Zealand's south island. Aotearoa Fisheries discovered almost a complete loss of kelp and a 90% loss, respectively, in the inner and outer Queen Charlotte Sound, while a 50% decrease was recorded in the Tory Channel. Glaysher said the reduction was probably due to a combination of land management practices and sediment infiltration.
Glaysher described the use of the ESR by Aotearoa Fisheries as a "leap of faith": "We had never done anything of this nature in the company. We have been surprised at the amount of information we've got out of it and what it might mean."
The company is discussing with the department of conservation a kelp restoration project in the Marlborough Sounds.
Archeus
Archeus produces a range of natural skincare and petcare products. The company's founder, Georgina Langdale, was part of the team that produced the TEEB - The economics of ecosystems and biodiversity - and was familiar with the corporate ecosystems services review (ESR). She was keen to use the tool to provide information on how suppliers were growing ingredients and to identify potential risks in the supply chain. The trends, risks and opportunities identified by the review included:
- the growing demand for natural and organic ingredients is placing pressure on availability of raw ingredients;
- rising demand risks soil depletion, while an increase in production of raw ingredients using pesticides or clearing of habitats can lead to a further decline in pollinators;
- intensification of agriculture threatens habitats, although biodiversity-friendly land management practices can limit impacts.
In response, Archeus is seeking to source certified natural ingredients and packaging materials. Langdale says: "The ESR helped us ask better questions of our customers, suppliers and our own business planning."
Contact
Contact is one of New Zealand's largest electricity generators and retailers, with more than 500,000 customers. It generates electricity from geothermal, gas and hydro sources, with hydrodams on the Clutha River accounting for 45% of its production in 2014. The Clyde Dam is the larger of the two dams on the Clutha. The hydro-generation operations on the river were selected to pilot the corporate ecosystems services review (ESR) as it provided a geographically discrete ecosystem with clearly identified stakeholders for Contact to invite to participate in the project. The aim was for Contact to better understand the benefits and impacts, risks and opportunities of its operations on the Clutha. Among the risks and opportunities identified were:
- increasing demand for freshwater from irrigation-based agriculture and horticulture, for example, leading to the regional council to review water allocation on the Clutha. This may affect allocations under Contact's existing consents;
- the Clutha and Roxburgh dams inhibit the natural migration of native fish, such as tuna (native eel). Although fish management programmes are in place to provide passage, the issue continues to be of concern to local communities and environmental groups; and
- tourism is critical for the local economy. Opportunities exist to assist tourist activities, such as river-based events and facilities.
Nicholas Robinson, general manager of corporate affairs, says: "What I've found so valuable about the ESR process has been the structure to identify the ecosystem services Contact is dependent on and those our stakeholders are dependent on. Stepping back, you could see a symmetry; we were dependent on fewer services than our stakeholders, which helped identify where tensions lay and provided a framework for addressing those tensions in the future."
Fonterra
Fonterra is a New Zealand dairy cooperative and the world's largest processor and exporter of dairy nutrition, each year producing more than two million tonnes of dairy and specialty ingredients, and consumer products. The company piloted the corporate ecosystems services review (ESR) in the production of strawberry yoghurt at its Takanini factory in Auckland with the aim of assessing its value and limitations and use it to develop strategies to enhance the sustainability of Fonterra products.
The study involved members of the company's global sustainability and social responsibility team as well as staff from the factory and the corporate procurement team.
The priority ecosystem services identified were crops, livestock, freshwater and the regulation of water timing and flows. Risks identified included security of supply and risk of strawberry crop failure due to climate change, pollination difficulties and other factors. Water was also identified as a key risk, primarily associated with rising costs and drought, shortages due to population growth, and flood damage to crop production. Opportunities included improving the procurement framework and process to enhance supply-chain sustainability.
Fonterra says it will now explore using the ESR as an engagement, scoping and planning tool for working with farmers.
