Trucost
Value of integrating biodiversity and ecosystem services into business decision making

Value of integrating biodiversity and ecosystem services into business decision making

18 March 2014

Unprecedented initiative in Brazil, the TEEB for Business Brazil project, coordinated by Conservation International, calculated the natural capital impacts of the different agricultural practices of Natura and Monsanto.

Valuing the real gains of business initiatives that promote the conservation of biodiversity and maintenance of ecosystem services is the main aim of the TEEB for Business Brazil project, coordinated by Conservation International (CI-Brazil) and launched in October 2011. The project now presents the results of a study that compares the environmental value of different agricultural practices for producing palm oil and soybean, based on pilot studies carried out by cosmetics company Natura and agricultural products firm Monsanto. In both cases, the analysis proves the value of integrating natural capital in business decision making.

"By exposing the monetary value of nature, previously treated as invisible in issues of natural resource conservation, TEEB demonstrates that the preservation and sustainable use of natural capital are essential actions for achieving sustainable economic development and ensuring the social welfare of current and future generations," said Helen Pavese, project coordinator of the TEEB for Business Brazil project.

The analysis was conducted by global natural capital consulting firm Trucost, recognized on the international stage for valuing externalities of large companies. To get the final results, the balance between the costs of environmental impacts and benefits of the different agricultural practices were measured in monetary terms.

Neil McIndoe, head of environmental finance at Trucost, said: “Factoring natural capital into business decision making not only helps companies to make the right decisions when optimizing production, it also builds resilience into business models by identifying risks and opportunities not visible in traditional business accounting.”

“All business and agricultural activities depend on the services provided by the environment, such as raw materials, energy, water and a stable climate. Organizations that use these services in an unsustainable way threaten their own future wealth and prosperity. The purpose of TEEB is to support companies in integrating such an analysis in their business decision making, so that this becomes a trend." concluded Pavese.

The TEEB for Business Brazil project is an initiative of Conservation International (CI-Brazil), with corporate sponsorship from Vale, Monsanto, Natura and Santander, and supported by the United Nations Environment Programme World Conservation Monitoring Center (UNEP – WCMC) and the National Confederation of Industry (CNI).

Natura: palm oil in agroforestry systems

To apply the TEEB methodology, Natura chose the Sustainable Palm oil Agroforestry (SAF) Project, a scientific study carried out in partnership with institutions such as the Brazilian Enterprise for Research on Agriculture and Cattle Raising (Embrapa) - Western Amazon (CPAA) and Embrapa - Eastern Amazon (CPATU) and other technical consultants.

The environmental value associated with a single crop, or ‘monocultural’ production of palm oil, was compared to agroforestry, where the crop is integrated with trees and other crops such as banana and cacao.

The main results were:

1. The total environmental value provided by palm oil agroforestry is three times higher than that provided by palm oil monoculture – R$410,853 per hectare compared to R$122,253 per hectare over the 25 year lifetime of the plantation.

2. The pilot demonstrates that in addition to producing palm oil used in the production of Natura’s100% vegetable soap brand, agroforestry systems involving the cultivation of palm oil with cocoa, passion fruit, pepper, banana, cassava, acai, among other species contribute to the diversification of farmer income, while minimizing the risks of pests and diseases in cultivated species.

"We believe that a detailed consideration of the dependence on ecosystem services is fundamental to the business sector and society as a whole. We see TEEB as an opportunity to foster discussion about a new economy that is greener, more inclusive and more accountable," said Luciana Villa Nova, sustainability manager at Natura.

Monsanto: conserving soybeans in the Cerrado

In the case of Monsanto, the study identified the main environmental impacts and benefits related to the cultivation of soybeans, considering provisioning and regulating ecosystem services and the direct consumption of inputs such as fuel, fertilizers and pesticides. To conduct the study, Monsanto provided data on the production of soybeans at a farm located in Western Bahia, in the city of Luís Eduardo Magalhães.

The environmental value associated with one hectare of soybean production was compared to one hectare covered with a mix of 80% soybean and 20% indigenous Cerrado forest.
 
The main results of the study were:

1. The total environmental value provided by soybean production with Cerrado conservation is 11% higher than that provided by soybean monoculture – R$1,139 per hectare compared to R$1,031 per hectare.

2. Soybean production associated with conservation of the Cerrado offers enhanced regulatory services, as well as provisioning services of soy and pequi. The provisioning services of soy, however, have greater monetary value than those offered by pequi.

"This initiative is aligned with the mission of Monsanto to improve the daily lives of farmers, helping them to produce more and conserve more. So we invested in advancing the sustainable development agenda, specifically to advance concrete initiatives that reconcile economic growth and environmental conservation in Brazil," said Daniela Mariuzzo, corporate social responsibility manager at Monsanto Brazil.

DOWNLOAD TEEB for Business Brazil


Contact

Trucost: Sarah Wainwright, +44 (0)20 7160 9800, sarah.wainwright@trucost.com

Conservation International: João Gonçalves, +11 98255-3876, jotage77@gmail.com