[Pollinator] What a Silent Spring Means for Business Risk

[Ladadams at aol.com]

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(http://www.greenbiz.com/News_email_page.cfm?NewsID=34682)     Strategic Thinking 
by GreenBiz.com
March 2007   
What a Silent Spring Means for Business Risk
The current catastrophic loss of honeybee colonies around the world may mean 
immediate bad news for agriculture, but it also offers an important lesson for 
companies that are not looking at their dependence on ecosystem services when 
examining risk or growth opportunities, Noam Ross argues. 

If your business's only supplier of a key service folded all of a sudden, 
what would you do? 

That is what a lot of agricultural companies are asking themselves right now. 
As reported in the New York Times last week, honeybee colonies in 24 states 
have collapsed. Colony populations have crashed by 30-70 percent, causing bee 
prices to skyrocket at and sending a $14 billion agricultural sector scrambling 
for insects to pollinate their crops. Yet there are not many options out 
there. The U.S. agriculture has grown increasingly dependent on trucked-in bees as 
natural pollinator populations have declined from habitat fragmentation and 
pesticides since the mid-20th century. 

This failure was almost entirely predictable. The Millennium Ecosystem 
Assessment warned in 2005 that the agricultural community was over-reliant on the 
domesticated honeybee as a pollination service provider, and that the bee was 
prone to disease and parasite problems. 

If a business had such a clear warning about its supply chain, one would 
think it would work to diversify or at least do what they could to shore up their 
suppliers to ensure their continued viability. Yet as we're learning from the 
bee crisis, few companies examine the risks related to ecosystem services, 
like pollination, that they rely on. These risks may be large -- according to the 
Millennium Assessment, two-thirds of ecosystems worldwide are being degraded 
or used unsustainably, and degradation will likely accelerate over the next 50 
years. 

There are a few cases of companies taking a proactive approach to ecosystem 
management. ForestRe, a forest insurance company, recognized that forests 
around the Panama canal help regulate water supplies to the canal and prevent 
excessive erosion that could block it. It convinced a consortium of insurers, Asian 
automakers and Wal-Mart to pay for re-forestation around the Panama canal to 
mitigate the risks of a shut-down. 

For the most part, though, companies are not looking at their dependence on 
ecosystem services when examining risk or growth opportunities. This is not 
entirely their own fault; while there is a vast and growing body of scientific 
knowledge on these services, there have been few business-friendly tools 
developed to help companies analyze this topic. 

This is very different than the current state of business sophistication when 
it comes to climate change. These days, companies have a slew of case 
studies, reports, and tools to help them figure out how to deal with climate change 
issues. Pressure from shareholders and groups like the Carbon Disclosure 
Project has forced firms to assess and report on their carbon portfolio. Financial 
powerhouses like UBS and Lehman Brothers are issuing report after report on 
climate risk management. And an army of nonprofit and for-profit consultants is 
out there to hold hands through it all. 

Assessment tools are going to have to play catch-up as businesses confront 
the global degradation of ecosystems. An important first step, though, is coming 
from a collaboration between The World Business Council for Sustainable 
Development, along with the World Resources Institute and the Meridian Institute. 

"After the Millennium Ecosystem Assessment came out, the business community 
said 'Wow, this is amazing as well as disconcerting. But what do we do about 
it?'" says Craig Hanson, of the World Resources Institute. "At the end of the 
day a company needs to translate those findings into business strategy. That's 
what we were hearing from the business community. Hence the idea to create a 
set of tools." 

Hanson is leading the development of a "Corporate Ecosystem Services Review", 
a methodology to assess business risk and new opportunities arising from the 
damaged state of ecosystems. The review will be designed to help companies 
figure out what ecosystem services they depend on and impact most, and then 
devise strategies to deal with the risks and opportunities represented. 

"[The tool] is quite systematic, and there's value in that," says Hanson. 
"There are whole suites of services that we don't even think about, such as 
erosion control and climate regulation. All these services are taken for granted, 
yet many businesses depend on them." With key ecosystem services identified, 
businesses can mitigate the risk of their failure by partnering with local 
communities or other industries to protect the ecosystems they rely on, or lobbying 
governments for stronger ecosystem protection policies. 

The Ecosystem Services Review is due out this Fall, and is currently being 
road-tested by companies in multiple industries and across four different 
continents. These include power provider BC Hydro, paper producer The Mondi Group, 
mining group Rio Tinto, and the agribusiness Syngenta. 

Global ecosystem degradation may be as big a threat as climate change. We all 
stand to lose a lot if its risks are ignored, but those companies that figure 
out where the opportunities are could make a bundle. 

Noam Ross is an analyst at _GreenOrder_ (http://www.greenorder.com/) , an 
environmental strategy consulting firm
 
Laurie Davies Adams
Executive Director
Coevolution Institute
423 Washington St. 5th
San Francisco, CA 94111
415 362 1137
LDA at coevolution.org
_http://www.coevolution.org/_ (http://www.coevolution.org/) 
_http://www.pollinator.org/_ (http://www.pollinator.org/) 
_http://www.nappc.org/_ (http://www.nappc.org/) 

Bee Ready for National Pollinator Week:  June 24-30, 2007.  Contact us 
for more information at www.pollinator.org 

Our future flies on the wings of pollinators.
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