1. The Economic and Business Case
for Conserving Biodiversity
Joshua Bishop
WWF Australia

2. The Economic and Business Case
for Conserving Biodiversity
Joshua Bishop
TEEB

3. Outline
• TEEB overview
• What is biodiversity worth?
• Why should business care?
• What can business do?
• Case study

4. Who asked for TEEB?
Potsdam Initiative – Biological Diversity 2010
“In a global study we will initiate the process of analysing
the global economic benefit of biological diversity,
the costs of the loss of biodiversity and
the failure to take protective measures
versus the costs of effective conservation.”
http://www.bmu.de/files/pdfs/allgemein/application/pdf/
potsdam_initiative_en.pdf

5. Who was involved in TEEB?
• Study Leader: Pavan Sukhdev (ex-MD Deutsche Bank)
• Advisory Board: 14 international scientific & policy leaders
• Administration: United Nations Environment Programme
• Scientific coordination: UFZ, Leipzig
• Over 500 individual editors, authors and reviewers
• Financial donors and other institutional partners:

6. What did TEEB deliver?
Interim Report
May 2008
Climate Issues Update
September 2009
National & International
Policy-Makers November 2009
Business
July 2010
Local & Regional Policy-
Makers September 2010
Ecological & Economic
Foundations
October 2010
Final Synthesis Report
October 2010

7. Outline
• TEEB overview
• What is biodiversity worth?
• Why should business care?
• What can business do?
• Case study

8. UN Convention on Biological Diversity
defines “biodiversity”
• Variety of species
! plants, animals and microorganisms
• Genetic differences within each species
! e.g., varieties of crops and breeds of livestock
• Variety of ecosystems
! e.g., deserts, forests, wetlands, mountains, lakes,
rivers, and agricultural landscapes

9. Millennium Ecosystem Assessment
focused on ecosystem services

10. Example: Tropical forests and climate
• Tropical forests store about 1/4 of all
terrestrial carbon
– 547 gigatonnes (Gt)
• Tropical forest capture carbon
continuously
– up to 4.8 Gt CO2 every year, compared to total
emissions p.a. of ~33 Gt
• Slowing or halting deforestation is an
excellent investment
– Reducing deforestation by 50% would deliver net
benefits of US$ 3.7 trillion (NPV), just counting
the avoided damage costs of climate change
Sources: Trumper et al. (2009), Lewis & White (2009), Eliasch (2008) 10

11. Example: Shrimp farms versus mangroves
US$/ha
in 1996
Private profits Private profits Public benefits
(less subsidies) $12,392ha
10000 $9,632ha
$10,821ha
Storm protection
Subsidies
- $8,412ha
5000
$1220ha $987ha Fisheries
$584ha $584ha
$584ha Forest prod.
0
All values in NPV
over 9 yrs (1996-2004) Net public costs of
at 10% discount rate restoration after 5 years
- $9,318ha Source: Barbier (2007)

12. Who is affected by biodiversity loss?
Ecosystem services Indonesia India Brazil
dependency 99 million 352 million 20 million
21% 16% 10%
Ecosystem services as 90%
79% 84%
percent of classical GDP
47% 11%
25%
Ecosystem services as 53%
75% 89%
percent of “GDP of the
Poor”
Ecosystem services
Source: Gundimeda and Sukhdev, D1 TEEB
18/04/2012 12

13. Outline
• TEEB overview
• What is biodiversity worth?
• Why should business care?
• What can business do?
• Case study

14. Business impacts on ecosystem services
110
100
Flooding damage in
1998
! US$12.2 billion
90 Property loss from estimated ecological
80
flooding pre - 1998
cost of deforestation
Cost (US$/m3 1998)
Loss of river transport
70 capacity in China (1950-88)
Reservoir and lake
60 sedimentation ! 60% of this cost is
50 Desertification attributed to logging
40 Reduced lumber output ! 64% of logging was
30 for construction and
Loss of plant nutrients
20 materials sectors
Lost water runoff
10 ! External costs =
- Reduced precipitation 178% of the market
Market External price of timber (1998)
Price of Cost
Timber
Source: TEEB for Business,
2010 (Annex 2.1).

15. Business dependence on ecosystem
services
• Value of insect pollination to food crops:
€153 billion in 2005 = 10% of VA in the
agriculture sector (Gallai et al. 2008)
• Example: Michigan USA blueberry crop
worth US$ 124 million/year; totally reliant
on pollination by bees at cost of about US
$ 1.5 million/year (renting hives)
• Example: Wild pollinators increase coffee yields by 20% on
farms within 1 km of forest in Costa Rica (Ricketts et al. 2004)
• Pollination services to agriculture are threatened by ‘colony
collapse disorder’ mainly affecting domesticated bees
Source: Syngenta for TEEB

16. Consumer demand for ‘green’
products and services
• Global sales of organic food and drink = US$
60 billion in 2009
• Sales of certified ‘sustainable’ forest products
increased four-fold between 2005 and 2007
• The global market for eco-labeled fish products
grew by over 50% from 2008 to 2009, to a retail
value of US$ 1.5 billion

17. Result: growing business concern
about biodiversity
Source: McKinsey & Company (July 2010) “Global Survey results: The next environmental issue for business” Based on
1,576 responses from executives representing the full range of regions, industries, tenures, and functional specialties.

18. Outline
• TEEB overview
• What is biodiversity worth?
• Why should business care?
• What can business do?
• Case study

19. What can business do?
Some ideas from TEEB…
1. Set ambitious biodiversity targets
2. Measure, value and report your footprint
3. Use and improve tools for biodiversity management
4. Build biodiversity business
5. Support market-friendly environmental policy

20. 1. Set ambitious targets
! BC Hydro: “long-term goal of no net incremental environmental impact.”
! Coca Cola: “Our goal is to safely return to communities and nature an amount of
water equivalent to what we use in all of our beverages and their production.”
! Danone Group: “Attain carbon neutrality for the major Danone brands, including
Evian, by the end of 2011.”
! Marks & Spencer: “Our goal is to become carbon neutral by 2012 in our UK and
Republic of Ireland operations.”
! Rio Tinto: “Our goal is to have a ‘net positive impact’ on biodiversity.”
! Sony: “strives to achieve a zero environmental footprint throughout the lifecycle
of our products and business activities.”
! Unilever: “Today we source 10% of our agricultural raw materials sustainably. By
2012 we will source 30%; by 2015 50%; and by 2020 100%.”
! Walmart: “Committed … to permanently conserve at least one acre of priority
wildlife habitat for every developed acre.”

21. 2. Measure, value & report
Top 100 companies Top 100 companies
Annual reports Sustainability reports
4% 2% 9% 11%
12%
15%
42%
23%
82%
Don't produce sustainability report
No mention of biodiversity or ecosystems
Passing mention of biodiversity or ecosystems
Discuss approach to reduce impact on biodiversity
Identify biodiversity as a key strategic issue
Source: PwC input to TEEB Report for Business

22. 2 (continued) – How to measure?
Climate change: CO2e
Biodiversity and ecosystems:1
• Living Planet Index (LPI) • Coverage by PAs of important habitats
• Wild Bird / Waterbird indices • Area of forest under sustainable mgmt.
• IUCN Red List Index (RLI) • International IAS policy adoption
• Marine Trophic Index • National IAS policy adoption
• Forest / Mangrove / Seagrass extent • ODA in support of CBD
• Coral reef condition (cover) • LPI for utilized vertebrates
• Water Quality Index • RLI for food & medicinal species
• Ecological Footprint • RLI for traded bird species
• Nitrogen deposition rate
• Number of Alien Species (in Europe) Business needs indicators for:
• Exploitation of fish stocks • site, product, group level
• Climatic Impact Indicator (on birds) • processes & performance
• Protected Area extent • internal & external reporting
1/ Adapted from: Butchart et al. (2010 ) “Global Biodiversity: Indicators of Recent Declines” Science Express (29 April)

23. 2 (continued) – How to value?
WBCSD Guide to Corporate
Ecosystem Valuation – shows how
to use valuation methods to:
• Save costs
• Reduce taxes
• Capture new revenue streams
• Assess liability & compensation
• and more…
www.wbcsd.org/web/cev.htm

24. 2 (continued) – How to report?
• Water reporting by SAB Miller
• Target: increase water productivity by 25% by 2015
• Potential savings: 20 billion litres of water/year

25. 3. Use & improve business tools
• Integrated Biodiversity Assessment Tool
– http://www.biodiversityinfo.org/ibat/
– GIS database for site-level risk assessment
– Based on World Database of Protected Areas, World Biodiversity Database, IUCN Red
List of Threatened Species
• Business and Biodiversity Offsets Program
– http://www.forest-trends.org/biodiversityoffsetprogram/
– Guidance on designing and implementing biodiversity offsets to ensure “no net loss”
– Led by Forest Trends, Wildlife Conservation Society and Conservation International
• Certification and labelling
– http://www.isealalliance.org/
– Global hub for social and environmental standards
– Members represent fair trade, forest stewardship, organic agriculture, fisheries, etc.

26. 4. Build “biodiversity business”
Greening existing business
• Agriculture
• Biodiversity mgmt services
• Cosmetics
• Extractive industries
• Finance
• Fisheries
• Forestry
• Garments
• Handicrafts New products & markets
• Pharmaceuticals • Bio-carbon & REDD-plus
• Retail • Water quality trading
• Tourism • Biodiversity banking

27. 5. Support business-friendly policy
• Reform of harmful subsidies
• Tax credits and other incentives
• Voluntary certification and eco-labelling
• Payments for Ecosystem Services
• Environmental responsibility and liability
• Environmental trading schemes
• Public access to information

28. Outline
• TEEB overview
• What is biodiversity worth?
• Why should business care?
• What can business do?
• Case study

29. Case study of Rio Tinto: mining,
biodiversity offsets and “NPI”
! “Our goal is to have a ‘net positive impact’ on biodiversity” (Rio Tinto 2004)

30. Biodiversity offsets: A key tool for
achieving net positive impact (NPI)
“Biodiversity offsets are measurable
conservation outcomes resulting from
actions designed to compensate for
significant residual adverse
biodiversity impacts arising from
project development after appropriate
prevention and mitigation measures have
been taken. The goal of biodiversity
offsets is to achieve no net loss and
preferably a net gain of biodiversity on
the ground with respect to species
composition, habitat structure, ecosystem
function and people’s use and cultural
values associated with biodiversity.”

31. Valuing biodiversity offsets in practice:
NPI in Madagascar (Olsen et al. 2011)
• Madagascar: QMM mine environmental
action includes the protection of 60,000
ha of lowland humid rainforest adjacent
to the mining lease
• Case study assessed economic benefits
and costs of continued deforestation
(estimated 1-2% p.a.) versus conserving
the Tsitongambarika forest (TGK)
Source: Asity Madagascar, 2009

32. The case of Rio Tinto and the Tsitongambarika Forest in Madagascar 25
NPV of conservation: US$ 17.3 million
30,000,000
Present value US$/TGK
Costs: Benefits: 26,839,291
25,000,000
20,000,000
15,000,000
9,763,951
10,000,000
5,000,000 2,939,205
2,511,463
707,325 270,642 198,842
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Note: Present values of costs and benefits associated with conservation of
Source: Olsen
TGK (at 5% discount rate, 30-yr horizon, assuming 1% p.a. deforestation) et al. (2011)

33. The case of Rio Tinto and the Tsitongambarika Forest in Madagascar 25
Payments for ecosystem services (PES)
30,000,000
Present value US$/TGK
Costs: Benefits: 26,839,291
25,000,000
20,000,000
$ $ $ $ $ $
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Source: Olsen
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34. For more information…
www.teebweb.org

35. Investing in HoB for a Green Economy
HoB
Investing in
Nature for a Economic case for
Green policy reform to
Economy
underpin HoB’s role in
a Green Economy
(REDD+ finance as transition
mechanism for a GE)
Engage private
Political platform & sector to invest in
Partners forum to nature and to
support HoB3 green their
operations
Green Economy Vision
for HoB

36. Thank You
www.teebweb.org
www.teeb4me.com