Case Study

Valuing Ecosystems

Efforts to enhance and preserve biodiversity are often underfunded due to environmental, social and health impact valuation not being used in conventional financial analysis.

The total value of global ecosystem services is estimated to be $125 trillion dollars per year. Meanwhile, the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services has developed a framework for valuing nature that goes beyond assigning a dollar figure. It calls this broader category of value, Nature’s Contribution to People or NCP.

American airline JetBlue partnered with The Nature Conservancy to quantify the value that coral reefs contribute to the Caribbean economy through tourism. Using machine learning and artificial intelligence, reef-associated tourism was estimated at over $7.9 billion dollars annually for over 11 million visitors. Knowing the monetary value of the reefs provides motivation to encourage greater conservation efforts by tourism-related businesses.

Australian multinational mining company Rio Tinto has long been working with the WBCSD on biodiversity management and valuation of ecosystem services. Due in part to this collaboration, the company now has a biodiversity strategy with a long-term goal of Net Positive Impact on biodiversity. Meeting this goal requires the company’s positive effects on ecosystems to outweigh the negative impacts associated with its mining operations. Rio Tinto is working towards this goal by minimizing its impacts and collaborating with scientists and Indigenous communities to restore ecosystems after mine closure.

Companies are seeking ways to quantify the financial value of natural resources and the company’s impact upon them. Placing a monetary value on fresh water resources and ecosystem services provided by native fauna and flora makes it simpler for companies to account for negative and positive impacts on the natural environment. By working with a variety of stakeholders, companies can ensure positive outcomes for both biodiversity and local communities.

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