1. Ecosystem Services: Perspectives on the Bottom Line for Business and Industry Marcus Lee, Millennium Ecosystem Assessment FIDIC 2005, 6 September, Beijing

2. Largest assessment of the health of Earth’s ecosystems Experts and Review Process  Prepared by 1360 experts from 95 countries  80-person independent board of review editors  Review comments from 850 experts and governments  Includes information from 33 sub-global assessments Governance  Called for by UN Secretary General in 2000  Authorized by governments through 4 conventions  Partnership of UN agencies, conventions, business, non- governmental organizations with a multi-stakeholder board of directors

3. Focus: Ecosystem Services The benefits people obtain from ecosystems

4. 1. Ecosystem Changes in Last 50 Years 2. Gains and Losses from Ecosystem Change Three major problems may decrease long-term benefits  Degradation of Ecosystem Services  Increased Likelihood of Nonlinear Changes  Exacerbation of Poverty for Some People 3. Ecosystem Prospects for Next 50 Years 4. Reversing Ecosystem Degradation MA Findings - Outline

5. Why ecosystems and their services matter to business and industry Businesses interact with ecosystems and ecosystem services, directly or indirectly, by  Using ecosystem services  Contributing to ecosystem change If current trends continue, ecosystem services will become more costly or cease to be available Operating environments are also likely to change in the face of ecosystem-related challenges  Customer preferences  Regulatory and policy regimes  New markets  Competitor strategies  Investor demands

6. Important ecosystem changes with negative impacts on business Water scarcity  Governments will allocate supplies / water rights  Market mechanisms for allocation and efficient use Climate change Habitat change and land conversion Biodiversity loss and invasive species Overexploitation of the oceans Nutrient overloading

7. Biodiversity: current estimates of species loss

8. Overfishing: example from collapse of Newfoundland cod

9. What we can expect in future (I) Growing demand for food  Without further harming the environment  In particular, capture fisheries vs. aquaculture Growing fresh water needs for agriculture, industry and consumption  Given globally uneven distribution of supply Growing demand for energy  While minimizing impacts on climate and air quality Balancing biodiversity conservation with economic development

10. What we can expect in future (II) Unexpected and abrupt changes in ecosystems  Cannot assume that there will be ample warning  Businesses may well be caught by surprise Substitutes can be developed for some, but not all, ecosystem services  Where substitutes are available, their cost is generally high Insurance industry taking account of growing risks from degradation of ecosystem services Independent, third-party verification of performance / certification

11. Challenges for business and industry Increased regulatory constraints as governments seek to protect degraded ecosystems Risk to reputation and brand image for businesses directly tied to threatened ecosystems and services Increases in costs of important inputs Vulnerability of assets and operations to natural disasters Conflict and instability in areas affected by scarcity of ecosystem services

12. Opportunities for business and industry New markets and products to address degradation in ecosystems and scarcity of ecosystem services Enhanced image and reputation, political capital, and brand value from genuine proactive management of ecosystem issues First-mover/competitive cost and operational advantages from early recognition and action with regard to ecosystems

13. What does this actually mean? Example: Water scarcity Businesses will have to compete - including with other businesses - for water Cost of water may cause substantial increase in overall business costs Decisions about locating operations must take account of long- term water supply Increasingly, new ways to recycle supplies need to be found New technologies to reduce water intensity and address water quality will be valuable Marketing and supplying water is already a business opportunity pursued in some places

14. Restating the Business Case Business can be a positive force in addressing ecosystem-related challenges by  Pursuing new opportunities and markets  Reducing operational footprints  Developing and deploying new technologies  Demonstrating leadership in support of poverty reduction, sustainable development and environmental protection Businesses which successfully address ecosystem-related challenges will  Gain first-mover / competitive advantage  Help ensure stable and secure societies, continued access to critical resources, and open markets

15. What businesses can do Identify and understand ecosystem services used or affected by business operations, as part of strategy  Including those important to suppliers, customers Manage ecosystem services through the supply chain and/or product life-cycle in an integrated way Increase efficiency in use and supply of ecosystem services  Develop, deploy and market new technologies which improve operations, reduce impacts, and meet increasing demand Pursue partnerships with government and civil society  Accelerate learning, leverage resources and expertise, build trust with stakeholders

16. Visit the MA Website All MA reports available to download Access to core data MA ‘outreach’ kit  Slides  Communication tools www.MAweb.org