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TEEB for Business Brazil


Natural capital accounting in Brazil


20 March 2014

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Overview


This study report under the coordination of Conservation International (CI-Brazil), recommends that companies should understand and incorporate into their decision making process, the economic value of biodiversity and ecosystems services as well as of their environmental impacts, in order to pursue more sustainable ways of doing business.

Environmental, or ‘natural capital’, valuation could also be more widely used by governments to design polices to achieve sustainable development.

The study compared the environmental value of different agricultural practices for producing palm oil and soybean. The assessment is based on pilot studies carried out by cosmetics company Natura Cosmeticos S.A. and agricultural products firm Monsanto on plantations in Brazil.

Extract


The results have important implications for companies, farmers, investors, governments and campaign groups.

All business and agricultural activities rely on services provided by the environment such as raw materials, energy, water and a stable climate. Companies that use these services unsustainably are damaging the means to create wealth and continuing prosperity for all. They also put their companies at risk from more stringent environmental regulation that could force them to pay the full price for their pollution and resource consumption.

Companies that use environmental valuation alongside traditional financial accounting can understand and reduce their exposure to these risks. Companies can also use valuation to better communicate the environmental and social benefits of voluntary corporate responsibility programmes to enhance the reputation of their brands.

Companies that embed environmental value can identify opportunities to reduce costs and develop more sustainable business models. The research findings suggest that Natura could benefit from promoting a switch from monocultural production to agroforestry. This could yield savings from reduced fuel and fertiliser costs. Certified sustainable commodities can attract a premium in the marketplace, as experience in coffee production has shown. From using monocultural production in the 1970s, many coffee growers have since shifted to agroforestry.

Why did TEEB for Business Brazil commission the research?


Understanding natural capital dependencies is no longer enough for business. It is also necessary that companies value and quantify their impacts on biodiversity and the ecosystems in order to manage risks and embrace new business opportunities. Economic valuation tools, in particular, can assist in this process as they translate to the dominant language of economics and politics, the value of the natural capital.

Using this approach, the TEEB for Business Brazil Project aimed at highlighting the environmental value of agricultural practices of two companies: Natura and Monsanto, in order to demonstrate the environmental and economic benefits generated by more sustainable business practices.

In this report we present the lessons learned from the first application of TEEB in Brazil and the results of these case studies. Thus, by highlighting the outcomes of this project, we hope to promote a greater awareness of the Brazilian corporate sector and serve as a stimulus for other Brazilian companies to consider biodiversity and ecosystem services as a strategic factor for their business.