Ecosystem Services and Payments for Ecosystem Services: Why should businesses care?

Abstract

Many companies rely on natural resources, and securing the flow of ecosystem services may be directly related to their business's bottom line. Other businesses have a considerable environmental impact or produce significant harmful emissions; they may find that paying to increase the flow of ES (e.g., carbon offsets or biodiversity offsets) is an economical way to neutralize their footprint. Insurance companies and coastal area developers may find that increasing the provision of ES is the cheapest way to reduce the risk of natural hazard. However, caring for the environment and paying for ES is not the sole responsibility of the private sector. Governments, communities, and NGOs share the burden of protecting the environment. Governments must work out the rules of the game, prime the pump, and in many cases be the direct procurers of some ecosystem services (public goods). Community and conservation NGOs must ensure that ES and PES are pursued with equity -balancing the interests of people and nature- to increase job and income opportunities for the rural poor and deliver real, on-the-ground conservation. Finding creative and equitable business arrangements is not a new concept, and companies that have already embraced corporate social and environmental responsibility are well positioned to take advantage of the business opportunities inherent in the five PES Business Models described within. In recent years, there has been an upsurge of initiatives to increase society's awareness of ecosystem services and a rush to devise mechanisms to pay for sustaining them. The business sector is bound to be a key player here, as a buyer and a seller of ecosystem services as well as a market developer and innovator. With this in mind, in November 2006, WWF invited a dozen representatives of some of the world's largest food, beverage, energy, and mining companies to join staff from government agencies, financial institutions, and nongovernmental organizations (NGOs) in Vienna to exchange ideas and identify collaborative opportunities.