1: INTRODUCTION

1
An ecosystem consists of the biological community that occurs in some locale, and the
physical and chemical factors that make up its non-living or abiotic environment. There
are many examples of ecosystems -- a pond, a forest, an estuary, a grassland. The
boundaries are not fixed in any objective way, although sometimes they seem obvious, as
with the shoreline of a small pond. Usually the boundaries of an ecosystem are chosen for
practical reasons having to do with the goals of the particular study.
The study of ecosystems mainly consists of the study of certain processes that link the
living, or biotic, components to the non-living, or abiotic, components. Energy
transformations and biogeochemical cycling are the main processes that comprise the
field of ecosystem ecology. As we learned earlier, ecology generally is defined as the
interactions of organisms with one another and with the environment in which they occur.
e can study ecology at the level of the individual, the population, the community, and
the ecosystem.
!tudies of individuals are concerned mostly about physiology, reproduction,
development or behavior, and studies of populations usually focus on the habitat and
resource needs of individual species, their group behaviors, population growth, and what
limits their abundance or causes extinction. !tudies of communities examine how
populations of many species interact with one another, such as predators and their prey, or
competitors that share common needs or resources.
"n ecosystem ecology we put all of this together and, insofar as we can, we try to
understand how the system operates as a whole. This means that, rather than worrying
mainly about particular species, we try to focus on major functional aspects of the
system. These functional aspects include such things as the amount of energy that is
produced by photosynthesis, how energy or materials flow along the many steps in a food
chain, or what controls the rate of decomposition of materials or the rate at which
nutrients are recycled in the system.
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1.1 ECOSYSTEM CONCEPTS
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"n biology%ecology an ecosystem is the collection of organisms in one area that interact
and therefore depend on each other. "t is to be contrasted with the notion that organisms
are in deadly competition with each other for evolutionary survival. The notion of
ecosystem recognises the many ways an organism interacts with and is dependent for its
own survival on various parts of its environment. The concept of ecosystem may be
viewed as a systems gernerali&ation of the food chain and food web, allowing for more
general relationships than consumption. 'or example, plants not only provide food for
animals but also shelter, shade, etc.
The contrast between the idea of survivial through competition and the idea of an
ecosystem has also been transferred to social and economic systems. The term ecosystem
is used when people talk about the environment that a company is part of, when they
think about how it interacts with various suppliers (of e)uipment, of parts, of services, of
knowledge, of financial li)uidity, etc.*, partners in its primary activity, consumers or users
of the products or services it provides, and the underlying structure and behavior of the
technology, markets and social context. The idea of establishing alliances with companies
that might otherwise have been thought of as competitors reflects the notion that
cooperation in an ecosystem is part of how the organisms that comprise it survive.
"n the general usage one can contrast +ecosystem+ to the term +system+ which focuses on
the collective behaviors. The term ecosystem is typically used to describe the internal
dependencies of the larger system especially as they pertain to a particular part. 'or
example, one might say +he%it is part of my ecosystem+ to refer to recogni&ing one,s
dependence on the other in the larger context. Thus, ecosystem is almost a substitute for
the term environment, but it emphasi&es the existance of various parts of the
environment, rather than the environment as a single entity. "n ecology, the term also
refers to the system (collective* behaviors of an ecological system (e.g. forest, wetland,
coral reef, etc.* consisting of interdependent biological organisms and their physical
context. The large scale collective behaviors include, for example, the forest lifecycle that
might in some places include destruction by fire and stages of regrowth.
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2. BUSINESS AND ECOSYSTEMS
.ver the past /0 years human activity has altered ecosystems faster and more extensively
than ever before in human history. That is the main finding of the 1illennium 2cosystem
Assessment# (1A*, a four-year, international, scientific appraisal of the condition and
trends in the 2arth3s ecosystems.
The 1A classified ecosystem services, the benefits people and businesses obtain from
ecosystems, into four categories$
4 5rovisioning 6 goods such as food, water and fiber7
4 8egulating 6 biophysical processes controlling natural processes7
4 9ultural 6 providing recreational, aesthetic or spiritual values7
4 !upporting 6 underlying processes such as soil formation, photosynthesis and nutrient
cycling.
The 1A- also identified six interconnected challenges that are of particular concern for
business as these further affect the integrity of ecosystems and their capacity to provide
services$
4 ater scarcity
4 9limate change
4 :abitat change
4 ;iodiversity loss and invasive species
4 .verexploitation of oceans
4 <utrient overloading.
This "ssue ;rief explores the six challenges, discusses their implications for businesses
and provides examples of corporate responses.
The business case
;usiness and ecosystem services are inextricably linked. 9orporations not only affect
ecosystem services but also rely upon them. 'or instance, the pharmaceutical industry
benefits from nature3s providing genetic resources7
=
agribusiness depends on nature3s pollination, pest control and erosion regulation services7
while tourism builds on cultural services, and the insurance industry benefits from the
natural ha&ard protections that some ecosystems provide. ;ecause of these inter-
relationships, the trends and six challenges identified by the 1A pose significant risks to
companies (as well as to their suppliers, customers and investors* including$
4 .perational 6 increased scarcity and cost of raw materials such as freshwater,
disruptions to business operations caused by natural ha&ards, and higher insurance costs
for disasters such as flooding7
4 8egulatory 6 emergence of new government policies such as taxes and moratoria on
extractive activities7
4 8eputational 6 damage to corporate reputation from media and nongovernmental
organi&ation (<>.* campaigns, shareholder resolutions and changing customer
preferences7
4 Access to capital 6 restrictions as the financial community adopts more rigorous
investment and lending policies.
At the same time, these trends and challenges can create new business opportunities
including$
4 <ew technologies and products 6 that will serve as substitutes, reduce degradation,
restore ecosystems or increase efficiency of ecosystem service use7
4 <ew markets 6 such as water )uality trading, certified sustainable products, wetland
banking and threatened species banking7
4 <ew businesses 6 such as ecosystem restoration and environmental asset finance or
brokerage7
4 <ew revenue streams 6 for assets currently unreali&ed, such as wetlands and forests, but
for which new markets or payments for ecosystem services could emerge.
:owever, most companies routinely fail to recogni&e the link between healthy
ecosystems and their business interests. 9ompanies can pursue several steps to prepare
for these risks and%or take advantage of emerging opportunities, including$
?
Assess impacs an! !epen!ence
4 9onduct a systematic review of impacts and dependence on ecosystem services,
covering direct operations and those of suppliers and customers. This may initially focus
on a single business unit, facility or product line, but later could expand7
4 Assess the status of relevant ecosystem services and assess key trends in order to
understand their effects on a particular business7
4 9onsider the following$ hat are the conditions of the services globally and regionally@
hat factors are driving these trends@ ho are other significant users of these services@
hat trade-offs among services are involved@
E"p#$%e an! pu%sue ne& business $pp$%uniies
4 Use the impact%dependency assessment to identify, evaluate and respond to new
business opportunities7
4 Take advantage of opportunities emerging in response to ecosystem changes, including
new technologies, markets, businesses and revenue streams7
4 !upport government policies that align incentives with actions that sustain ecosystem
services.
Re!uce impacs an! sca#e up s$#ui$ns
4 Use the assessment to develop appropriate corporate strategy, policy and operational
responses guided by the hierarchy of Aavoid, minimi&e, mitigate and offsetB to reduce
impacts. !et targets for improvement, and report on the results7
4 "ntegrate assessment and review systems into existing environmental management
systems7
4 ;uild alliances with research organi&ations, <>.s, industry associations and
governments to improve understanding of ecosystem services, scale up solutions and
share assessment tools and best practices.
/
2.1 'ATER SCARCITY
'reshwater scarcity an
accelerating condition for
#-- billion people
worldwide, affecting food
production, human health
and economic
development. The most
important sources of
renewable freshwater are
forest and mountain
ecosystems, which
provide water to twothirds
of the global population.
The availability of water
per person varies
worldwide, but only about
#/C of the world3s population lives with relative water abundance.
D
Cha##en(es
orldwide, some #.E million people die annually as a result of inade)uate water,
sanitation and hygiene.
:alf the urban populations in Africa, Asia, Fatin America and the 9aribbean suffer from
diseases associated with inade)uate water and sanitation. ;etween /C and -0C of global
freshwater use exceeds long-term sustainable supply and is met by water transfer or
unsustainable use of groundwater. 1ost water is consumed by agriculture and industry,
with agriculture accounting for more than E0C of total consumption in six out of eight
regions.
'reshwater )uality can be reduced by wastewater from industry, storm water runoff in
urban areas, overuse of fertili&er, and poor sanitation facilities in both urban and rural
areas. 5rojections indicate that between -000 and -0#0, global water use will expand by
#0C.
Imp#icai$ns
1ost corporate operations need reliable sources of water. 1ajor business risks arising
from water scarcity include$
4 :igher water costs due to decreased supply or increased treatment and processing costs7
4 Unpredictable water supply, which could disrupt operations, shut down plants, and
challenge heavily water-dependent industries7
4 >overnment-imposed water restrictions or rationing7
4 5lant closures in areas where costs become prohibitive or operations are no longer
viable7
4 8isk to reputation and brand
image as a result of excessive or
inefficient use.
)$&e*e%+ nume%$us business
$pp$%uniies c$u#! eme%(e+
inc#u!in(:
4 "ncreasing access to drinking
water using market mechanisms
E
(e.g., water )uality trading* or new technologies (e.g., wastewater treatment and
desalination*7
4 "mproving efficiency by streamlining processes and implementing closed-loop systems7
4 Gesigning products and processes that are less water-dependent7
4 "mproving image and reputation through active involvement in water management via
partnerships with government, local communities and civil society.
2.2 C,IMATE C)AN-E
2cosystems and climate are closely interrelated7 local and global climate cycles are
influenced by$
4 2cosystems se)uestering or emitting greenhouse gases (>:>* such as carbon dioxide
(9.-*, methane (9:?* and nitrous oxide (<-.*7
4 9hanges in land cover that affect and alter water cycles and rainfall patterns over time
and space7
4 :igher incidence of extreme climatic events such as droughts, floods and hurricanes.
Cha##en(es
2cosystems influence climate, and changes in the climate can transform ecosystems. 'or
example, changes in temperature and water availability can change survival and
fecundity, and hence affect species distribution and interaction as well as the resilience of
ecosystems and their ability to provide services.
H
The use of fossil fuels to meet the world3s growing energy needs has contributed to an
increase in >:> concentration in the 2arth3s atmosphere. There is a widespread view
that this increase is leading to climate change, with adverse effects on the environment.
2cosystems and ecosystem change are also major contributors to climate change in terms
of$
4 9.- emissions from land use changes, primarily deforestation7
4 9:? emissions from natural processes in wetlands and agriculture (ruminant animals
and rice paddies*7
4 <-. emissions from farm systems, primarily driven by manure and fertili&er use.
1arket mechanisms, such as international trade in 9.- emissions allowances, have been
developed to help decrease >:> emissions. Targeted policies that use fiscal mechanisms
to encourage emissions reductions, such as incentives for low-carbon technologies, are
also likely to play an important role in efforts to stabili&e emissions.
9limate change is one of the direct drivers of ecosystem change that is expected to
become increasingly prominent over the next /0 years. !cientists project that climate
change will affect ecosystem services, economic development and human well-being by
increasing the global mean surface temperature, accelerating losses of biodiversity
worldwide, changing productivity and growing &ones of vegetation, causing sea level
rise, and expanding the prevalence of pests and diseases such as malaria, dengue fever
and cholera.
Imp#icai$ns
;usinesses are affected by climate change, but the distribution of the impacts will vary.
Those businesses that have implemented effective risk management strategies or have
competitively positioned themselves will be more adaptable and could stand to benefit
from climate change. Those that fail to recogni&e the risks and potential opportunities
may suffer decreased operational efficiencies and profit margins.
9orporate responses to climate change should incorporate uncertainty regarding the
nature, extent and location of change.
;usiness risks posed by climate change include$
I
4 8educed agricultural yields and insecurity of crucial raw materials, such as water,
caused by higher temperatures and increasingly complex regional variation in weather
patterns7
4 8educed ecosystem resilience generated by the loss of species and their stabili&ing
interactions7
4 Gecreased operational efficiencies, mounting costs, and rising insurance premiums
resulting from the increased occurrence of extreme weather events, such as floods and
tropical storms7
4 "ncreased operating costs due to governmentimposed restrictions on or charges for
>:> emissions.
Business $pp$%uniies p%esene! b. c#imae chan(e inc#u!e:
4 "ntroduction of new businesses, products or services that reduce >:> emissions7
4 8educed costs through
energy efficiency
improvements or switching
to low-carbon fuels7
4 2nhanced reputation and
brand through corporate
policies and proactive
action to reduce >:>
emissions (e.g., conducting
a >:> inventory, setting
reduction targets*7
4 2arning a place at the
policy-makers3 table in response to timely and effective company action.
#0
Bui#! scena%i$s $ p%epa%e /$% chan(e
!kanska has begun to develop its approach to climate change by using scenario modeling.
These models will be applied to new development projects to assess the potential impacts
of climate change on indoor climate and help the company consider architectural designs
accordingly. 'or example redesigning heating, ventilation and air conditioning systems
can significantly lower energy demand, with annual consumption of less than #00 k per
s)uare meter achievable in commercial offices.
2.0 )ABITAT C)AN-E
9hanges in land use have significantly altered the capacity of ecosystems to provide
services. Today, one-)uarter of the 2arth3s land surface is covered by cultivated systems.
:abitat fragmentation is most severe in 2urope and least severe in !outh America. 1any
countries in sub-!aharan Africa suffer from low soil productivity and rely on the
expansion of cultivated areas to meet the demand for food.
Cha##en(es
The economic value of converted land is often far less than that of sustainably managed
natural systems that provide a greater variety and )uantity of services.
##
'or example, the ;ra&ilian Ama&on, which comprises about one-third of the world3s
tropical forest, plays an important role in regulating the hydrological cycle underpinning
the country3s agriculture and hydropower. <onetheless, between -000 and -00/, ;ra&il
accounted for ?-C of net global forest loss, with most of this deforestation occurring in
the ;ra&ilian Ama&on.
1odifying habitats changes the distribution of species. The time lag between habitat
change and extinction provides opportunities to invest in habitat restoration and re-
establish wildlife populations. "nterventions for habitat restoration include enhancing the
efficacy of resource use and management, preventing pollution, and encouraging the
establishment and expansion of protected areas.
About #-C of the 2arth3s land area is designated as protected.
'uture rates of habitat loss will depend in part on changes in human population, wealth,
trade and technology. 5rojections for the next /0 years estimate that$
4 Gemand for food crops will grow by E0-H/C7
4 'orest cover will continue to increase in industrial countries, and commercial
plantations may provide an increasing proportion of timber products7
4 !ome #0--0C of remaining grassland and forestland will be converted for agricultural,
urban and infrastructure development purposes7
4 Fand conversion will mainly occur in developing countries and dryland regions7
4 Fand use change will continue to be a major driver of ecosystem change in terrestrial
and freshwater ecosystems7
4 :abitat losses will lead to global extinctions, including a #0-#/C reduction in plant
species.
Imp#icai$ns
9urrent and projected habitat loss presents significant risks and opportunities for many
business sectors.
Ris1s $ business /%$m c$ninue! habia #$ss inc#u!e:
4 >overnment restrictions on land use and conversion, and pressure for greater
efficiencies on existing land in order to reduce habitat loss7
4 8ising land prices and production costs stemming from competition for land7
#-
4 Tarnished reputation and image in response to corporate degradation of ecosystems and
corresponding habitat loss, such as in the ;ra&ilian Ama&on7
imposed obligations to restore degraded land and habitats in response to stakeholder
concerns.
Business $pp$%uniies /%$m m$%e e//icien use $/ #an! an! habia %es$%ai$n
inc#u!e:
4 Adoption of new technologies, design of new products and processes that improve the
efficiency of land use and boost profitability7
4 <ew businesses that restore or preserve habitats7
4 2nhanced brand image and reputation through the use of certification schemes and
support for habitat restoration initiatives.
#=
De*e#$p bes p%acice (ui!e#ines h%$u(h mu#i2sa1eh$#!e% p%$cesses
1ulti-stakeholder processes like the 8oundtable on !ustainable 5alm .il, the 8oundtable
on 8esponsible !oy, and the ;etter 9otton "nitiative, each established by the orldwide
'und for <ature ('*, are being used by an increasing number of companies and
stakeholders to develop best practice guidelines around the production and extraction of
ecosystem services such as commodities.
2.3 BIODI4ERSITY ,OSS AND IN4ASI4E SPECIES
;iological diversity (biodiversity* refers to the diversity of genes, populations, species,
communities and ecosystems on 2arth. 2stimates of total species numbers range from /
million to over =0 million, but fewer than - million species have been described.
;usiness and industry have profited from the use of microbes, plants and animals for
food, fiber, construction materials, pharmaceuticals, cosmetics and other vital products
for centuries.
Cha##en(es
;iodiversity influences the provision of ecosystem services such as food production,
pollination, seed dispersal, carbon se)uestration and pest control. ;y degrading
biodiversity, human activities are compromising opportunities for future progress and
profitability in all regions of the world.
1aintaining nature3s diverse portfolio to draw from is a way of reducing business risk.
.ver the past few hundred years, species extinction rates have increased by #,000 times
over background rates, mainly due to habitat change, non-native invasive species and
overexploitation. >enetic diversity has declined globally, particularly among cultivated
species. !ome #0-=0C of mammal, bird and amphibian species are threatened with
extinction.
8egions long known for their distinctive plant and animal assemblages are becoming
more homogeneous due to the spread of invasive species, primarily through the
expansion of international trade.
"n conserving ecosystem processes, species interrelationships are as important as the total
number of species. 'or example, loss of certain keystone species like figs and palms in
tropical forests can change species distributions and ecosystem functions, thereby
reducing the flow of benefits to people.
#?
The main causes $/ cu%%en an! /uu%e bi$!i*e%si. #$ss a%e human in!uce! an!
inc#u!e:
4 :abitat change, particularly conversion of natural systems to agriculture7
4 9limate change, which may become the dominant driver in the coming decades7
4 "nvasive species, particularly on islands and in estuaries and freshwater ecosystems7
4 .verexploitation, particularly of fish stocks7
4 <utrient overloading, especially in 2urope, <orth America and 2ast and !outh Asia.
Imp#icai$ns
Today3s overuse and misuse of ecosystem services and the resulting affects on
biodiversity will limit business opportunities and profits in the future. The financial
benefits of ecosystem services (e.g., food and forest production, pollination for crops,
wildlife for recreation, natural pest and disease control* are considerable, as are the costs
of addressing problems such as invasive species. 5reventive measures could make more
funds available, for example for investment in and development of new technologies and
markets.
Ris1s $ business /%$m he c$ninue! #$ss $/ bi$!i*e%si. inc#u!e:
4 Giminishing supply and rising cost of key production inputs such as fish for the food
sector7 trees and associated inputs for the forest sector7 water and pollinating agents for
agriculture7 and raw materials for biochemical industries including pharmaceuticals7
4 Geclining )uality of natural habitat and amenities available for nature-based tourism
and associated travel and hospitality sectors7
4 !ignificant economic losses posed by the spread of invasive species7
4 >rowing pressure from stakeholders to prevent invasion of non-native species and to
conserve endangered species and their habitat, resulting in restricted business access to
critical natural resources.
At the same time, new business opportunities linked to biodiversity conservation are
emerging. These include$
4 2nhanced competitiveness of companies and increased consumer acceptance of
products and services that are credibly associated with biodiversity conservation7
#/
4 5roviding technical advice and consulting services to the wider business community on
biodiversity strategy and management systems7
4 9ommercial supply of habitat restoration and management services, such as carbon
se)uestration in biomass (mainly forestry*, or other forms of compensation for ecosystem
damage (e.g., biodiversity offsets, habitat banking*7
4 2merging markets for
ecosystem services,
particularly regulating and
cultural services
such as watershed management
to deliver clean water, and
private protected areas to
deliver recreational value.
Bui#! $n scieni/ic 1n$&#e!(e $ imp%$*e pe%/$%mance
9adbury !chweppes is engaged in an 2arthwatch "nstitute research project in >hana
investigating the feasibility and potential of cocoa production in a biologically diverse
environment. 9adbury !chweppes employees join the project as volunteer research
assistants and gain a better awareness and understanding of the links between
biodiversity, sustainability and the 9adbury !chweppes supply chain.
2.5 O4ER E6P,OITATION O7 OCEANS
.ceans cover more than E0C of the 2arth, playing key roles in climate regulation, the
freshwater cycle, food provisioning and delivering cultural services.
9oastal &ones cover only HC of the 2arth, but the services they provide are responsible
for approximately ?=C of the estimated total value of ecosystem services. ;eing the most
productive part of the ocean, the coastal boundary &ones yield about I0C of marine
fisheries. They also have high levels of pollution. <early ?0C of the human population
lives within #00 km of the coast.
#D
Cha##en(es
Gemands on coastal &ones are increasing in terms of shipping, military and security uses,
recreation and fish farming. The overexploitation of oceans presents several challenges$
4 'ish landings averaged H-.? million metric tons per year during #II#--000, with a
declining trend largely attributed to over-fishing7 a )uarter of fish stocks are
overexploited or significantly depleted7
4 'ishery declines mean less cheap protein7 more than a billion people rely on fish as
their main or sole source of animal protein7
4 2xpansion of fish and shellfish farming (a)uaculture* has caused loss of vegetation and
biodiversity and deterioration of water )uality7 a)uaculture of carnivorous species such as
salmon and tuna consumes more fish than it produces7
4 Algal blooms and dead &ones (low oxygen conditions* in coastal waters are increasing
in fre)uency and intensity, harming marine resources and human health7
4 !ome =/C of mangrove areas have been lost or converted over the past several
decades7 some -0C of coral reefs have been destroyed, with more than a further -0C
being degraded7
4 "nvasions of non-native species are altering marine and coastal ecosystems, threatening
the supply of ecosystem services.
2stimates based on current rates of diversity loss indicate that there will be no viable fish
or invertebrate species available to fisheries by -0/0.
:owever, the trends in species loss are still reversible hile the demand for fish is
increasing, fish farming may relieve some of the pressure on wild fisheries, but only if it
reduces the pressure on wild fish stocks, and sustainable fish farming practices are
adopted.
1arine tourism is growing, especially the marine wildlife tours sector, which depends on
suitable local conditions, such as productive coral reefs. 'uture forms of ocean
exploitation include fish harvesting, a)uaculture, energy production, bioprospecting,
seabed mining and carbon se)uestration.
Imp#icai$ns
9hanging ocean ecosystems as a result of overexploitation will affect the profitability of
#E
businesses that rely on products or services provided by the marine environment,
including fishing, oil and gas extraction, and recreation. 8isks to business from continued
overexploitation of oceans include$
4 Gepletion of fish stocks, reducing revenue and triggering new catch regulations7
4 5roperty damage, asset losses and rising insurance rates associated with the loss of
natural coastal protection7
4 Gecreased tourism and lower property
values caused by beach erosion, coastal
dead &ones and coral reef degradation.
Ne& business $pp$%uniies %e#ae! $
he susainab#e use $/ ma%ine p%$!ucs
an! se%*ices inc#u!e:
4 2nhanced business image and
reputation through the use of eco-labels
or certification programs, such as the
1arine !tewardship 9ouncil (1!9*7
4 <ew products, services and markets
(e.g., reef species for pharmaceuticals, mangrove restoration for flood protection,
wetlands restoration for water purification*7
4 "nvestment in research J development (8JG* to overcome environmental harm from
today3s harvesting and cultivation practices7
4 "ncreased market demand for low-impact fish farming, shipping and tourism.
#H
Assess supp#ie%s $ %e!uce impac
al-1art has set a goal to purchase all of its wild-caught fresh and fro&en fish for the
<orth American market from 1!9-certified fisheries. "n -00D, al-1art gave their non-
certified suppliers three to five years to develop plans and programs
to become certified.
2.8 NUTRIENT O4ER,OADIN-
<utrient cycling is essential for the supply of farmed and wild products. 1ain nutrients
include nitrogen, phosphorus, sulfur, carbon and potassium. :uman activities,
particularly agriculture, have significantly changed nutrient balances and cycles$
4 .ver the last few decades, the flow of reactive nitrogen has doubled. .ver half of the
nitrogen fertili&er ever used has been applied since #IH/7
4 5hosphorus is accumulating in ecosystems due to the use of mined phosphorus in
agriculture and industrial products7
4 !ulfur emissions have been reduced in 2urope and <orth America, but are still rising in
countries like 9hina, "ndia and !outh Africa and in southern parts of !outh America.
Cha##en(es
#I
<itrogen, phosphorous and sulfur are accumulating in many of the 2arth3s vital
ecosystems. <itrogen accumulation in surface and a)uatic ecosystems contributes to the
degradation of freshwater and coastal ecosystem services. "ncreases in nitrogen inputs are
caused mainly by poor or absent sewage systems, insufficient wastewater treatment, and
fertili&ers used in food production. 2rosion of soil carrying agricultural phosphorus that
enters into freshwater systems contributes to eutrophication. 'orest ecosystems are at
high risk of acidification from sulfur emissions.
9onversely, nutrient depletion is a problem in certain regions. :arvesting without
nutrient replacement in parts of Africa and Fatin America has reduced soil fertility, with
serious conse)uences for human nutrition, health and the environment. !oil nutrient
depletion affects more than H/C of agricultural lands in Africa.
Fand management can also play a role. 9hanging natural habitats into large-scale, low-
diversity agricultural landscapes affects nutrient cycling and undermines the capacity of
ecosystems to absorb and retain nutrients.
Imp#icai$ns
Alterations in nutrient balances and recycling will affect many industries that depend
directly on supporting, provisioning and cultural ecosystem services, such as the food,
timber, fiber, water and tourism industries.
Business %is1s /%$m nu%ien $*e%#$a!in( inc#u!e:
4 8estrictions of use and emissions of nutrients for various industry sectors as a result of
regulatory limits on nutrient emissions%releases7
4 Fower profitability as a result of degraded terrestrial, coastal and freshwater
ecosystems7
4 Fimited availability or widespread loss of raw materials as a conse)uence of nutrient
accumulation, as in the case of acid-rain induced depletion of high-)uality timber7
4 "ncreased costs due to government-imposed obligations to pay for the restoration of
degraded ecosystems.
Business $pp$%uniies $ a!*ance m$%e e//icien nu%ien use inc#u!e:
-0
4 <ew products and technologies that enhance
soil conservation, improve nutrient use efficiency
and limit leaching of nutrients to coastal and
freshwater ecosystems7
4 9ommercial recycling of nutrients, such as
sludge from wastewater treatment7
4 2merging markets for nutrient trading and associated businesses that facilitate these
markets7
4 5rovision of technical advice and training on nutrient management to affected
industries.
Rec.c#e &ase $ inc%ease p%$/is
Terra 2co !ystems speciali&es in recycling organic waste materials to agriculture, land
restoration, forestry and horticulture. 2ach year the company recycles more than #.E
million metric tons of organic material including water and wastewater sludge, as well as
green and kitchen waste. Through these services Terra 2co !ystems provides cost-
effective fertili&er solutions.
0. ECOSYSTEMS CONCEPTS IN BUSINESS
An array of processes already exists for environmental data gathering, stakeholder
engagement and decision making. ithin these approaches, many companies have
-#
established processes for navigating a wide range of differences in stakeholder views and
values across a range of issues, including values associated with natural resources.
ithin the past couple of years, however, key stakeholders and opinion leaders have
expanded their focus to include consideration of new, often harder to measure issues,
such as ecosystem services. The reason is simple. "t is increasingly clear that many of
these current corporate environmental performance measures fail to capture impacts on
broader ecological dynamics.
'or companies, this emerging expansion of corporate environmental performance
expectations could be significant. 9ompanies may face accountability, not only for
pollution prevention, but also for impacts (positive or negative* to ecological structure
and function in the areas where they operate or source. !uch an evolving mandate could
either be advanced via regulation or, more opa)uely, become expected practice by
investors, insurers, activists, employees or neighboring communities. !uch an expanded
focus would translate into a company needing to understand its dependencies and impacts
(both positive and negative* on the flow of ecosystem service.
There are growing sets of drivers for businesses to restore the function of ecological
systems, some of which are listed below.
1. Ne& &a.s /$% businesses $:
K 9reate value
K 9onsider risk mitigation
K Gifferentiate among competitors
K 8eali&e new revenue streams through ecosystem services protection
K Access capital and new markets
K !ave on costs
-. <ew mindsets on the part of regulators and key stakeholders that prioriti&e holistic
ecosystem approaches over siloed management of air, freshwater, biodiversity, etc. =.
<ew market valuation techni)ues as trendsetters incorporate ecosystem services into their
research
?. <ew criteria for project finance and credit, as financiers signal that some
environmental assets (e.g. "U9< protected areas "6"L* are priceless
--
Met many in the private sector may ask why should a business N which already pays to
meet air and water pollution regulations and other guidelines, as well as to gain services
from a local or regional water utility N suddenly start paying for ecosystem services@
1ore pointedly, why would individual businesses pay for
the maintenance of well-functioning ecosystems when everyone relies upon them@
The /i%s ans&e% revolves around risk mitigation. "n an environment of unpredictable
weather, shifting rainfall, water shortages and clean technology, the most nimble and risk-
aware companies are those that will excel. The possibilities for corporate restoration of
private lands, as a risk mitigation strategy, are intriguing N particularly if these are
occurring within the context of emergent public policy, in which a company can
demonstrate leadership and thus, in part, shape.
The sec$n! ans&e% is that policymakers are beginning to incorporate ecosystem services
principles into policy dialogues and new legislation. Today, ecological investment
vehicles are proliferating in the form of carbon markets, self-organi&ed watershed
restoration deals and biodiversity impact offsets. A mix of regulatory and voluntary
markets now trade at multibillion-dollar levels in environmental derivatives of carbon
se)uestration, water-)uality improvements and biodiversity conservation. "n addition,
companies that rely upon particular ecosystem services are engaging in focused business
deals and payments for ecosystem services (52!* at local levels.
The hi%! ans&e% is that companies today could position themselves for winning new
business, investors and regulatory goodwill within this shifting environmental context.
"ntegration of ecosystem servicerelated
parameters within existing approaches may well become a key element to such
positioning for market leadership. ('or more detail on emerging elements of the business
case, see ;!83s A2xecutive ;riefing on 2nvironmental 1arkets.B*
The next section provides an overview of key tool design considerations for a business
audience and it underscores the importance of integrating new environmental parameters
within corporate decisionmaking
protocols. The report then offers a comparative analysis of the tools for potential users,
with an emphasis on corporate decision makers.
0.1 BUI,DIN- T)E BUSINESS CASE 7OR ECOSYSTEM
SER4ICES TOO, USE
-=
As the environmental management paradigm shifts to one of ecosystem services, the
)uestion for corporate decision makers becomes when to add new parameters to existing
protocols and how to integrate new components. ('or an introduction to ecosystem
services as the concepts apply to business management, see ;!83s AThe <ew 1arkets for
2nvironmental !ervices$ A 9orporate 1anager3s 8esource >uide to Trading in Air,
9limate, ater and ;iodiversity Assets.B*
"n addition, many companies will need to consider the rigor, feasibility and cost
associated with assessing new environmental factors, particularly$ #* within contexts
where few experts exist and data is sparse, as is currently the case for most operating
regions and -* as the information technology platforms evolve to become more data-rich
and user-friendly. ithin this context, companies can begin to ask Aif, when and howB
they would utili&e emerging tools for ecosystem services assessment and management.
9I/ ::
K Are market or operating conditions making ecosystem-level assessments critical to my
company@
K :ow comfortable is senior management with piloting assessment tools when no clear
standardi&ed guidelines exist@
K hat investments would my company make in data collection versus collaborating with
<>. or academic partners on the ground@
9'hen::
K hat are the trends projected for the market or operating conditions mentioned above@
K 9an the case be made to management that positioning our company now will benefit it
once the field crystalli&es@
A. 9The )$&:: Ine(%ain( Ne& Assessmen P%$$c$#s in$ C$%p$%ae P%$cesses
.nce a company has satisfactorily answered the Aif B and AwhenB )uestions above,
decisions must be made about how to move forward with ecosystem services assessment.
1. -ap Ana#.sis /$% P%$cesses: A logical first step is to conduct a gap analysis of
existing internal processes and reporting tools (e.g. 2nvironmental "mpact Assessment,
;iodiversity Action 5lan, etc.* to gauge their effectiveness in identifying ecosystem
service-related issues. "n some cases, existing reporting protocols, some driven by
voluntary or regulatory government programs, may act as barriers to a shift toward
ecosystem services-level management.
-?
2. -ap Ana#.sis /$% E"pe%ise: As with any cutting-edge domain, the necessary skills
may not exist in-house, and early conversations with academic, <>. or consultant
advisors will benefit eventual decision making.
0. Cu#u%a# ,imus Tes: "t will be useful to gauge past success in measuring historically
intangible values. "f the company culture is not conducive, it may be worth prioriti&ing
tools that place a value on ecosystem services, rather than those that are more )ualitative
or relative in their results.
3. 'ish ,is $/ T$$# A%ibues: ;ased upon findings from the above steps, one can
assemble a Awish listB of tool design attributes that would be most helpful to a company3s
decision-making circumstances. .n the next page is the Awish listB from companies in
our working group.
7i(u%e 1: A C$%p$%ae 9'ish ,is: $/ I!ea# T$$# A%ibues
MODE, a. Utili&e recogni&ed nomenclature for ecosystem services, such as the
1illennium 2cosystem Assessment, and justify any adaptations made.
b. Lolunteer up front information on data gaps and the subse)uent limitations of the tool
for any given region.
c. Gemonstrate wide recognition among stakeholders that the methodologies and
assumptions are transparent, reliable and accurate.
d. Gesign for modular and continual updating of the tool to ensure that results improve as
data layers increase. 5lan a business model that will support this regular refresh and
maintenance.
e. Allow for AtaggingB of preloaded versus user-loaded data, so that users can parse out
the source (i.e. preloaded, government, corporate, etc.* at a later date.
f. 9onsider Aco-brandingB outputs with credible <>. or government partners to enable
corporate users to point to these brands when making the case for tool use.
g. 1ake tool adaptable to different industries, some of which have significant and direct
land impacts while others are only indirect users.
INPUTS a. !tate up front the following specifications$
K The ideal format and form of data to be input (with guidance on how to convert to this
form*
K The ideal geographic scale at which the tool should be applied
-/
K The sources and collective methodologies underpinning any preloaded datasets
K The estimated financial and human resources for )uality outputs
K Any third-party assurances for the tool3s methodology
K hat users can do to reduce the level of uncertainty of the tool3s results
b. ;e flexible enough to incorporate both expert and community input, especially as it
relates to relative values for specific ecosystem services.
c. .ffer a Ado-it-yourself B approach that allows corporate decision makers to leverage
preexisting environmental data collection and decision-making processes and protocols.
OUTPUTS a. 9haracteri&e the level of uncertainty for any given output, based upon the
)uality of the data as well as the scientific consensus around dynamics in the ecosystem
of interest.
5robabilistic models are most easily understood among corporate audiences.
b. .ffer functionality for identifying cumulative impacts and reinforcing drivers from all
activities in a given region and flagging potential ecological tipping points.
c. here feasible, include a sensitivity analysis to demonstrate the system-wide
conse)uences of possible activities.
d. .ffer results at varying geographic scales to enable flexibility across corporate and
project planning.
e. "f reporting valuation results, provide them in relative, nonmonetary units, not absolute
financial e)uivalents, and include a range of stakeholder values, accounting for differing
economic and cultural circumstances.
f. Alongside results, provide anecdotal cases from past benefits accruing to companies
that protected a similar ecosystem service.
g. here feasible, provide an overlay of markets and%or transactions in the region of
interest, including real-time pricing.
COST a. 1inimi&e resource demands for basic tool use to make initial adoption more
likely.
b. 9onsider offering tiered levels of access and%or complexity of results.
5. Mach Se#ece! T$$#s $ E"isin( Decisi$n2Ma1in( P$ins: 5rospective users will
need to clarify the Ainterface pointsB between tools and relevant business decision-
making points, including the following$
-D
K P%$!uc an! p%$cess !esi(n !ecisi$ns+ including optimi&ation along the extended
value chain
K 7aci#i. !esi(n an! sie #$cai$n !ecisi$ns+ related to project investments and project
stage reviews
K Inn$*ai$n $pp$%uni. a%eas+ including strategic 8JG initiatives and highest value
efforts
K C$%p$%ae pe%/$%mance a%(es+ including local and regional targets%metrics
K Se&a%!ship an! c$mmunicai$n s%ae(ies+ such as corporate social responsibility
(9!8*
K T%a!e$//s assessmens+ such as net environmental benefit evaluations
K Susainabi#i. s%ae(. ;usi/icai$ns and building the business case for
sustainability%9!8
8. Deci!e $n Ba#ance $/ In2)$use 4e%sus Ous$u%ce! '$%1: 9orporate practitioners
have pointed to the fact that major companies tend to trust models built in-house or at
least with their own datasets.
As such, prospective tool users will need to strike a balance between drawing on the deep
expertise of external tool developers while maximi&ing in-house modeling capacity and
know-how.
<. Use T$$# as Sha%e! Ana#.ica# P#a/$%m /$% C%$ss2Ene%p%ise Dia#$(ue: .ne of the
more intangible benefits of tool adoption will be the opportunity to discuss ecosystem
services issues across the company. Through the data collection process, tool users will
gain a better understanding of the day-to-day challenges in each business unit, and build
relationships that can lead to better environmental decision making in the future.
;y taking these steps, it is possible for companies to optimi&e their use of emerging tools
and in so doing, to integrate key )uestions about dependencies and impacts on
ecosystems, as well as facilitate alignment between corporate environmental strategy and
regionally specific policies.
0.2 T)E CURRENT ECOSYSTEM SER4ICES TOO,S
9,ANDSCAPE:
-E
These growing efforts around environmental markets, 52! and other policy changes to
include ecosystem services imply that companies will need to understand their
dependencies and impacts on ecosystem services. "n response, over the past few years,
academics, nongovernmental organi&ations (<>.s* and public sector research entities
have been )uietly developing tools to enable key decision makers N in public, private
and nonprofit sectors N to integrate ecosystem service concepts into planning as well as
daily operations. The growing number of initiatives can make it challenging to sort out
which tools are applicable at which decision-making juncture, which rely on robust
analytical methods and high )uality data, and which may be used in concert with other
decision-making tools.
A. Mu#i2Ec$s.sem Se%*ice Assessmen T$$#s
There is now a set of emergent tools for conducting multiple ecosystem service-focused
assessments, including$
K A8"2! (A8tificial "ntelligence for 2cosystem !ervices* by the University of Lermont3s
2coinformatics A9ollaboratoryB (at the >und "nstitute for 2cological 2conomics*,
9onservation "nternational, 2arth 2conomics, and experts at ageningen University
K 2!8 (2cosystem !ervices 8eview* by the orld 8esources "nstitute (8"*, the
1eridian "nstitute, and the orld ;usiness 9ouncil for !ustainable Gevelopment
(;9!G*
K "nL2!T ("ntegrated Laluation of 2cosystem !ervices and Tradeoffs* by The <atural
9apital 5roject, a joint venture among !tanford University3s oods "nstitute for the
2nvironment, The <ature 9onservancy and orld ildlife 'und ('*
K 1"12! (1ulti-scale "ntegrated 1odels of 2cosystem !ervices* by the University of
Lermont3s >und "nstitute for 2cological 2conomics
K <L" (<atural Lalue "nitiative* Toolkit by 'auna J 'lora "nternational, ;ra&ilian
business school '>L, and the United <ations 2nvironment 5rogramme 'inance "nitiative
B. Bi$!i*e%si.27$cuse! T$$#s ,in1e! $ Ec$s.sem Se%*ices
"n addition to these tools focused on multiple ecosystem services, a number of other tools
exist N or are in development N that are also relevant given$ a* the role of biodiversity
in ecosystem structure and function and b* the broader range of environmental parameters
-H
being considered, which include elements of ecosystem services. These other relevant
assessment approaches, which are in various stages of development, include$
K ;;.5 (;usiness and ;iodiversity .ffsets 5rogram* Toolkit by 'orest Trends,
9onservation "nternational and the ildlife 9onservation !ociety
K ";AT ("ntegrated ;iodiversity Assessment Tool* by 9onservation "nternational,
;irdFife "nternational and the U< 2nvironment 5rogramme3s orld 9onservation
1onitoring 9entre
7i(u%e 2: O*e%*ie& $/ Ec$s.sem Se%*ice Assessmen T$$#s
-I
C. Saus $/ T$$# De*e#$pmen
ithin the set of tools considered on the preceding page, none are yet fully mature with a
robust track record of applications. 8ather, the tools sit along a spectrum from AbetaB to
AprereleaseB to Ain development.B 1ost of the tool developers will have made public at
least a draft form by the end of -00H.
0.0 NA4I-ATIN- T)E TOO,S 9,ANDSCAPE:
A. Simi#a%iies
A range of crosscutting characteristics emerged in this tool review, including$
1. Inen 6 All of the tools profiled on the preceding pages seek to enable improved
decision making through inclusion of ecosystem services considerations.
2. C$mm$n Ta%(e Au!ience 6 All of the tools are intended to influence policymakers,
with A8"2!, "nL2!T and 1"12! explicitly focused on this target audience. 2!8, <L",
";AT and ;;.5 have cast a wider net with an emphasis on corporate decision makers.
=0
0. N$menc#au%e 6 1ost of the tools use the 1illennium 2cosystem Assessment set of
ecosystem services and definitions. "nL2!T has narrowed the list to those services it
deems as AproxiesB for others in an effort to make the set of services more manageable.
3. Te%%es%ia# 7$cus 6 <one of the tools have fully developed marine%ocean models and
few have marine ecosystems as a primary focus area. 1arine systems are, however, on
the list of future activities.
5. Sca#ab#e Daa an! Res$u%ce an! Time Deman!s 6 A8"2!, 1"12!, "nL2!T and
";AT provide preloaded databases while 2!8, ;;.5 and <L" re)uire users to input their
own data.
8. Use% 7%ien!#. 6 The tools are focused on ease of use, either through computer models
(in beta versions of 1"12! and ";AT, and in yet-to-be-developed software for A8"2!
and "nL2!T*, or a series of tasks within an overall analytical approach (2!8, ;;.5 and
<L"*.
<. C%e!ibi#i. 6 The involvement of well-respected players in development of these tools
is likely to result in higher levels of attention paid by policymakers and other target
audiences.
=. Unc#ea% De#i*e%. Mechanisms 6 hile 2!8, ";AT, <L" and ;;.5 are (or will be*
available in basic form via the eb, the model-based tools ("nL2!T, A8"2! and
1"12!* will re)uire more sophisticated technological delivery. "nL2!T is working to
insert the tool as a feature on Arc>"!.
>. E*$#*in( Business an! T%ainin( M$!e#s 6 All tool development teams intend to have
free public access to at least a basic version of the tool, while 1"12!, ";AT and "nL2!T
are considering a paid subscription service for advanced users. All developers are
considering ways to provide training to prospective users, rather than become involved in
each application of a tool. !uch training is also seen as a way to ensure continued )uality
of results.
1?. Minima# Sa1eh$#!e% En(a(emen Thus 7a% 6 hile "nL2!T and 2!8 are
designed to incorporate stakeholder input as a key source of data during tool use, only
minimal stakeholder engagement has been undertaken in tool development across all
seven tools. This is due to a combination of the scarce resources and budgets as well as
preexisting silos in academic departments, <>.s and other sectors.
B. Disinci$ns
=#
Gespite some areas of resonance across tools, there are a number of key distinctions$
1. Use% Ine%/aces 6 which span from computer models through Aworkbook-likeB 2xcel
spreadsheets.
2. T.pes $/ Resu#s 6 ranging from a list of priority ecosystems to consider through
spatially-explicit maps showing changes under different land management scenarios
0. Daa Deman!s 6 from high to low, spanning from do-it-yourself to detailed preloaded
databases.
3. Ec$#$(ica# Deai# 6 from high-level, coarse-grain assessments to fine-grain, map-
based assessments
5. 4a#uai$n Emphasis 6 which can be further parsed in terms of value within an
existing environmental market (such as within the 2uropean Union 2missions Trading
!cheme* or value within a broader societal context that draws upon ecological economics
theory%concepts. "n order to explore further the distinctions outlined on the preceding
page, we offer the following illustrative maps that characteri&e each tool, relative to its
peers, across the five distinguishing criteria. .f the tools profiled here, four offer a
computer model interface that provides spatially explicit maps as outputs. 'oundational
to these tools are preloaded databases built from Abest-in-classB publicly available
information. The other three tools offer sets of )uestions or a workbook that brings
analytical structure to one3s planning.
Those advocating for a shift toward ecosystem services-based management have often
called for an emphasis on valuation, or the ability to place financial value on a given
service, and possibly even a suite of services known as a Abundle.B :owever, distinct
=-
differences are apparent between 2uropean policy dialogues that emphasi&e valuation and
U.!. dialogues that skirt the issue or take a risk mitigation angle.
.f the tools assessed here, three have strong focus on valuation as part of their offerings
(given <L"3s target audience of financial institutions, this is perhaps not surprising*. The
majority of tools are also capable of detailed ecological analysis. Gepending upon the
level of detail needed by the user, as well as the desire to see valuation analysis, the
choice of the most appropriate tools )uickly becomes clear.
"t is noteworthy that at
present, there are no
tools specifically
tailored for easy Aplug
and playB within
business decision-
making processes.
8ather, each of the
existing tools could be
applied in various ways
and during discrete
phases of decision
making. As the tools
evolve, we aim to map each of them to preexisting corporate decision-making processes.
"n the meantime, one can make the following broad generali&ations about when to use
which tool.
==
;ased upon the status of each tool as of mid--00H, ;!83s corporate working group
participants offered the following perspectives on the relative strengths and weaknesses
of each tool for the business world.
7i(u%e <. C$%p$%ae Pe%speci*es $n T$$#s@ Re#ai*e S%en(hs an! 'ea1nesses
=?
0.3 CONC,USIONS AND RECOMMENDED PAT)'AYS 7OR'ARD
At present the value of these tools is to enable a structured conversation around whether
were asking all the questions that need to be asked and whether we are missing anything
we should be thinking about.
6 2nvironmental !ervices, Tools and 1arkets 9orporate orking >roup member, -00H
There remains a considerable amount of work to advance both the business case for, and
business adoption of, ecosystem services tools. "n order to avoid duplication of effort N
or proliferation and dilution of impact N we have attempted to stimulate more
coordination between tool developers. !ince we launched these efforts, the following
progress has been made$
K All seven tool development teams now know of one another3s tools and their
capabilities
K "nL2!T3s partner organi&ations have$
6 Approached Arc>"! for delivery of "nL2!T software
6 :ired a team to design their commerciali&ation strategy and conduct a market-si&ing
exercise of potential business users
K A8"2! and 2!83s developers have discussed the complementary nature of their tools
and are considering collaboration
K 1"12!, A8"2! and ";AT developers have explored their respective business models
for selfsustained financing and user membership
K All seven tool development teams and working group companies have agreed to host a
second three-day workshop in early -00I to address the proposed pathways forward (see
figure below*
K The tool developers have tentatively committed to joint development of a navigational
device for prospective users (below*
=/
7i(u%e =. P$ssib#e Ta"$n$m. /$% P%$p$se! Na*i(ai$na# De*ice $ T$$#s
Through our discussion across business, nonprofit, academic and public sector
organi&ations, we discovered the following sets of needs for immediate consideration$
=D
7i(u%e >. I!eni/ie! Nee!s $ A!*ance T$$# De*e#$pmen an! Upa1e
"t is our hope that this synthesis paper will be a first step in moving toward greater clarity
on the details related to each of the emerging ecosystem service-related tools as well as
how to most effectively use the tools within the business setting.
=E
3. CASE STUDIES
PROMOTION O7 RENE'AB,E ENER-Y IN INDIAN INDUSTRIES
.verall, about D# percent of "ndia3s greenhouse gas emissions come from energy
generation, and this amount is expected to grow along with future demand. The solution
to emissions reductions in the power sector must come from a planned transition to a
low-carbon economy through an emphasis on renewable power generation.
8enewable sources of energy currently constitute only H percent of total installed
capacity nationwide, and - percent in terms of energy operation. :owever, "ndia is
bestowed with abundant renewable energy sources, with a total estimated potential of
#--,000 1 of grid-interactive power (without considering solar energy potential*. This
translates into an investment potential of 8s D#0,000 9rores (U!G #=/ billion*, in
addition to the current annual turnover of H to #0 Thousand 9rore 8upees in the
renewable energy sector. "n spite of the huge opportunities for growth in the renewable
energy sector in "ndia, it is still lacking large scale commerciali&ation. To cataly&e more
corporate investments and enhance penetration of renewable energy systems for
industrial and commercial applications, 9""->odrej >;9 has formed a 9ouncil on
8enewable 2nergy to facilitate more private sector participation in tapping the huge
potential in the 82 sector in "ndia. The 9ouncil addresses policy issues at the !tate and
9entral level, supports technology transfer, and facilitates innovative financing
mechanisms
by bringing all stakeholders together. Today "ndia is in a position to play a major role in
large-scale commerciali&ation of renewable energy technologies, and can offer
=H
technology transfer to other developing countries and support in building capacity. The
country has already achieved installation of over #0,000 1 of renewable-based
capacity, and stands at fourth position worldwide in terms of wind power installed
capacity. "t is notable that more than I/ percent of the total investments in renewable
energy in "ndia have come from the private sector.
INNO4ATIONS IN )OME ENER-Y
>asification represents a new innovation in the energy sector, allowing the conversion of
carbonaceous matter such as rice husks into carbon monoxide and hydrogen through use
of heat, pressure, and steam. The products of gasification include syngas (or hydrocarbon
gases*, hydrocarbon oils, and char (carbon ash by-product*. The resulting syngas product
is more energy dense than the original biomass, and is thus a more energy-efficient fuel.
>asification has changed life in ;aharbari, an isolated village in the state of ;ihar that is
not connected to the electricity or telephone grid and is cut off from the outside world
during monsoon season. "n -00-, for the first time, villagers harvested -/ acres of
irrigated summer wheat for the creation of biofuels. A small rice husking industry has
grown so that it competes with a monopolistic business set up by a powerful family some
years ago. !everal members of lower castes and a disabled woman have full-time salaried
jobs7 some have bought land for the first time.
hat happened@ ith skills and technical assistance from desipower, a self-formed co-
operative
=I
has succeeded in transforming the village in the past years by installing a village power
plant run by a biomass gasifier. 'uelled by rice husk and dhaincha, a weed commonly
grown in "ndia to restore nitrogen to depleted soils, the power plant runs agro-processing
machines, irrigation pumps, and a battery charging station. "t doesn3t take much 6 just -/
kilowatts 6 to power these village industries on clean, renewable, local energy.
'OR,D C,ASS ENER-Y E77ICIENCY IN T)E CEMENT
INDUSTRY
"ndia is the second-largest cement producer in the world, with an installed capacity of #DD
million tonnes. "ndia3s projected >G5 growth rate of H percent, coupled with a booming
construction industry, has spurred the cement sector to start gearing up for the high
demand.
As the cement industry grows, attention must be paid to the associated environmental
impact.
The cement industry is highly energy-intensive, the cost of energy within some plants
reaching as high as // percent of manufacturing costs. ;ecause it powers its clinker
production with carbon-intensive coal fuel, the global cement industry is responsible for
contributing about ? percent of global 9o-emissions.
The "ndian cement industry has become a forerunner in energy-efficient cement
manufacturing, with some of its plants operating at among the lowest specific energy
?0
consumption levels in the world. Gue to increases in overall production, this energy
efficiency may not reduce the overall 'ootprint. <everless, it is important to note that
"ndian manufacturers are making steps to decrease their demand on "ndian biocapacity.
The cement industry brings together a vast array of practices and techni)ues to reduce its
impact on the environment. A significant effort in this direction was the Aorld 9lass
2nergy 2fficiencyB initiative in "ndian cement plants.
1ajor initiatives taken up by the cement industry towards minimi&ing the industry 3s
2cological 'ootprint include$
O Adoption of energy-efficient technologies
O Use of alternative fuels
O "nstallation of waste heat recovery system
As part of the initiative, major cement companies shared their best practices and
experiences with respect to the efficient utili&ation of energy resources. ith a focus on
the impact of waste products and the importance of low specific energy consumption per
tonne of cement produced, the initiative was able to significantly reduce the cement
industry 3s environmental impact.
The average electrical energy consumption for the cement industry in -00/-0D was H-
kilowatt hours per tonne of cement (kh%t*, and thermal energy consumption was E-/
kilocalories per kilogram (kcal%kg*. "t is expected that the average electrical energy
consumption will decrease to EH kh%t of cement, and thermal energy consumption to
E#0 kcal%kg by the end of -0#-.
This improvement can be made possible by new options in retrofitting and the adoption
of energy-efficient e)uipment, better operations and process control of instrumentation
facilities.
?#
CONC,USION
The contrast between the idea of survivial through competition and the idea of an
ecosystem has also been transferred to social and economic systems. The term ecosystem
is used when people talk about the environment that a company is part of, when they
think about how it interacts with various suppliers (of e)uipment, of parts, of services, of
knowledge, of financial li)uidity, etc.*, partners in its primary activity, consumers or users
of the products or services it provides, and the underlying structure and behavior of the
technology, markets and social context. The idea of establishing alliances with companies
that might otherwise have been thought of as competitors reflects the notion that
cooperation in an ecosystem is part of how the organisms that comprise it survive.
Larious steps should have been taken to analyse the ecosystem concepts and applications
in business like$

4 1eeting ecosystem challenges depends on scientists and business strategists with
different world views developing shared perspectives and research7
4 2xecutives may feel more comfortable responding to ecosystem challenges when other
business leaders are doing the same7
4 As ecosystem management becomes integral and widespread among businesses,
benefits in terms of competitive environmental advantage may be reduced7
4 To build a sufficient shared response to ecosystem degradation, governments
worldwide must employ fiscal and regulatory mechanisms7
4 !patial information on ecosystem degradation should be widely available and
accessible as a public good to help business planning and responses7
?-
4 The development of an Aecosystem marketplaceB that is widely accepted and
encompasses both ecosystem investments and payment for ecosystem services is crucial
in adopting a response of suitable scale7
4 <ew tools are re)uired by businesses to manage ecosystems, recogni&e the true value of
the services they provide, and internali&e the costs of public goods and services usage in
business operations.
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BIB,IO-RAP)Y
BOOAS
;orman, '.:. and >.2. Fikens. #IE0. +The nutrient cycles of an ecosystem.+
!cientific American, .ctober #IE0, pp I--#0#.
essells, <.P. and K.F. :opson. #IHH. ;iology. <ew Mork$ 8andom :ouse. 9h.
??.
'EB PA-ES
http$%%www.globalchange.umich.edu%globalchange#%current%lectures%kling%ecosyst
em%ecosystem.html
http$%%necsi.org%guide%concepts%ecosystem.html
www.iucn.org
www.wri.org and www.earthtrends.wri.org
www.wbcsd.org
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ANNE6URE
'BCSD
The orld ;usiness 9ouncil for !ustainable Gevelopment (;9!G* brings together
some #H0 international companies in a shared commitment to sustainable development
through economic growth, ecological balance and social progress. .ur members are
drawn from more than =0 countries and -0 major industrial sectors. e also benefit from
a global network of /0Q national and regional business councils and partner
organi&ations. .ur mission is to provide business leadership as a catalyst for change
toward sustainable development, and to support the business license to operate, innovate
and grow in a world increasingly shaped by sustainable development issues.
.ur objectives include$
;usiness Feadership 6 to be a leading business advocate on sustainable development7
5olicy Gevelopment 6 to help develop policies that create framework conditions for the
business contribution to sustainable development7
The ;usiness 9ase 6 to develop and promote the business case for sustainable
development7
;est 5ractice 6 to demonstrate the business contribution to sustainable development and
share best practices among members7
>lobal .utreach 6 to contribute to a sustainable future for developing nations and nations
in transition. www.wbcsd.org
EART)'ATC) INSTITUTE
2arthwatch "nstitute is an international environmental organi&ation whose mission is to
engage people worldwide in scientific field research and education to promote the
understanding and action necessary for a sustainable environment. !ince #IE#
2arthwatch has been bringing together individual volunteers and scientists on field
research projects as a means of providing essential funding and a dedicated labor force
for international scientists. 2arthwatch believe that by involving the general public in
science, they gain the knowledge, skills and motivation needed to take responsibility for
the environment. 2arthwatch currently supports over #=0 environmental research projects
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in /0 countries. !ince #IE# the worldwide organi&ation has recruited over H0,000
volunteers in support of -,H00 field research projects in ##H countries. These volunteers
have contributed over #0 million hours to essential field work. 2arthwatch "nstitute
(2urope*3s 9orporate 2nvironmental 8esponsibility >roup (928>* is a platform for
enhancing good practice among the business sector. 928> members benefit from
networking and shared learning with other companies committed to good environmental
practice, stakeholder dialogue through report%policy feedback services and disseminating
good practice through presentations at 2arthwatch seminars. www.earthwatch.org
IUCN B T)E 'OR,D CONSER4ATION UNION
'ounded in #I?H, The orld 9onservation Union brings together states, government
agencies and a diverse range of non-governmental organi&ations in a uni)ue world
partnership$ over #000 members in all, spread across some #?0 countries.
As a Union, "U9< seeks to influence, encourage and assist societies throughout the
world to conserve the integrity and diversity of nature and to ensure that any use of
natural resources is e)uitable and ecologically sustainable.
A central !ecretariat coordinates the "U9< 5rogramme and serves the Union
membership, representing their views on the world stage and providing them with the
strategies, services, scientific knowledge and technical support they need to achieve their
goals. Through its six 9ommissions, "U9< draws together over #0,000 expert volunteers
in project teams and action groups, focusing in particular on species and biodiversity
conservation and the management of habitats and natural resources. The Union has
helped many countries to prepare <ational 9onservation !trategies, and demonstrates the
application of its knowledge through the field projects it supervises.
.perations are increasingly decentrali&ed and are carried forward by an expanding
network of regional and country offices, located principally in developing countries. The
orld 9onservation Union builds on the strengths of its members, networks and partners
to enhance theircapacity and to support global alliances to safeguardnatural resources at
local, regional and global levels.
www.iucn.org
?D
'OR,D RESOURCES INSTITUTE
The orld 8esources "nstitute (8"* goes beyond research to create practical ways to
protect the 2arth and improve people3s lives. "ts mission is to move human society to live
in ways that protect 2arth3s environment and its capacity to provide for the needs and
aspirations of current and future generations.
'or more than -0 years, 8" has demonstrated its commitment to helping find solutions
to these enormous global environmental challenges. 8"3s work is concentrated on
making progress toward four goals$
:ealthy 2cosystems 6 8everse rapid degradation of ecosystems and assure their capacity
to provide humans with needed goods and services.
!table 9limate 6 5rotect the global climate system from further harm due to emissions of
greenhouse gases and help humanity and the natural world adapt to unavoidable climate
change.
!ustainable 2nterprise 6 :arness markets and enterprise to expand economic opportunity
and protect the environment.
Access to 2nvironmental "nformation and Gecisions 6 >uarantee public access to
information and decisions regarding natural resources and the environment.
www.wri.org and www.earthtrends.wri.org
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