Applying Nature-based Solutions in corporate self-assessment
In the past decades, there have been more and more assessments on the pledges and contributions of States towards sustainable development. The figures on the 150+ Intended Nationally Determined Contributions (INDCs) of States to reach the COP21 goals are one popular example. However, when evaluating the ecological footprint and the so-called ‘non-financial performance indicators’ of companies, it is different. In fact, beyond the compliance thresholds imposed by the States, the communication, or increasingly the sustainability, department of a company has primarily conducted the reporting on sustainability.
To make the corporate sustainability self-assessment of companies more transparent, numerous certifications and standards have emerged since the 1980s. One of the recurring arguments used by companies that would free their liability for the ecological collapse was the recognized and embellished “win-win” scenario. In the win-win scenario, corporate environmental and/or social performance and economic success of a company increase simultaneously. Since the 80s, more companies focused their communication on the positive relationship between their corporate sustainability and their economic performance. Thanks to this new scenario, both stakeholders and shareholders had proof that the company was “doing well by doing good” to society.
In this article we will discuss the ways in which companies around the world can invest and communicate on Nature-based Solutions (NbS) using existing certifications and standards.
The practicability of NbS: Insights from the Nature Conservancy
As we have seen in the previous article of this series, NbS are mainly defined as actions meant to “protect, sustainably manage and restore natural or modified ecosystems, [to] address societal challenges […] while simultaneously providing human well-being and biodiversity benefits” (report by IUCN). This definition leaves the private sector a multitude of interpretations of the concept and the benefits that stem from its use.
The recent white paper, “Strategies For Operationalizing Nature-based Solutions In The Private Sector” published by The Nature Conservancy’s Business Council, tried to address this issue. The nine contributing authors of the report have put together a framework to allow companies to operationalize NbS. In this report published in 2020, the authors have put together nine case studies of companies that made use of NbS. The core of their research was to conduct interviews with companies’ decision-makers and publish the results openly. Such a paper, coming from academics, is one of the very few to provide these insights. The authors emphasized three key takeaways for companies:
First, the authors remind us that the field is not mature enough to make ambitious claims on the operationality of NbS. They write that “The road to operationalizing NBS is long [and] there is a strong need for more qualitative and quantitative case studies demonstrating the business case for NbS.”
Second, the State together with civil societies are very important for the use of NbS in the private sector. As the topic was shaped in the 21st century, it is still under discussion in the research sphere and needs more cooperation between all actors to clarify the dos and don’ts for practitioners. The authors write: “There needs to be more constructive dialogues between public, private, and non-governmental actors on these regulatory issues to ensure the greatest opportunity for scaling NbS.”
Finally, to engage in more investments in NbS, companies need to find their own trajectory and start with the low-hanging fruits. As the authors put it, companies need to engage a “range of company departments early in the process and […] identify quick-win projects to serve as initial pilots.”
To summarize the interview findings, NbS must be considered as a cost-effective business solution that can create ecosystem value for the common good. However, the field lacks the maturity to make bold claims about its potential, thus the private sector should focus on partnerships instead of individual initiatives. Finally, the report says that companies should approach NbS in a holistic and progressive way (not leaving any department behind and investing gradually in NbS).
In reality, companies are doing well on at least one of these points, as a lot of them focus on partnerships when engaging in NbS activities. According to the white paper, around 350 companies have already committed to help reverse nature loss and restore vital natural systems on which economic activity depends through partnerships.
The report also warns us that with time, not investing in NbS will have dramatic consequences for the operations of companies and their stakeholders. Since Duncan (1972), we know that given the ecological urgency, businesses pursue their activity with continuous environmental uncertainty. For example, varying environmental regulations can be harmful to investors. As Sinding, Anex & Sharfman (1998) put it “[environmental] regulations can vary in several dimensions, thus creating uncertainty about the present and future operating conditions for firms.”
Not investing in NbS will only exacerbate and extend this uncertain situation. The main risks cited by the report for which the companies felt concerned were risks related to regulatory requirements and natural disaster risks.
It is not hard to imagine that the report evangelizes the potential of NbS and puts a positive win-win scenario forth. In practice, the observations give a more subtle and restrained role of NbS. According to a recently published report by the OECD “the use of NbS has not been mainstreamed into the set of solutions and options that are currently considered by […] the private sector in different policy areas.”
Acting towards NbS: New forms of evidence
For now, it seems that most of the corporate reporting made on NbS is linked to the building industry, more precisely to green infrastructure.
Green infrastructure is a network of areas and buildings that is built and managed artificially to maximize the utility emanating from ecosystems to a wide audience. Some examples of Green infrastructures include rainwater harvesting (collecting and storing rainfall for later use to reduce runoff), bioswales (little gardens placed in long narrow spaces such as the space between the sidewalk and the street) or permeable pavements (catching water where it falls to infiltrate, treat, and/or store it to reduce risks in case of flooding or icing).
Green infrastructure contrasts with the status quo of grey infrastructure, which put very simply, involves engineering projects that use concrete and steel. Today, investing in green infrastructures or energy-efficient buildings constitute the main means towards an NbS certification for companies. Unfortunately, they require a large amount of initial capital and a lot of planning. Consequently, there is little room for small green actions for companies when reporting and using standards about NbS. Low-hanging fruits in the field of NbS are rare as few enterprises have the luxury to make an impactful investment in NbS today.
In addition to this, opportunities to invest in NbS fluctuate depending on the geographical position of the company or project site. The biggest opportunities for any project to get certified are concentrated in few parts of the world, namely where the climate conditions allow it. As the report by the Nature Conservancy puts it: “establishment, maintenance, and sustainability of NBS is more challenging in areas with shorter growing seasons and harsher weather conditions”. This constitutes a challenge to the spread of NbS certifications in places with harsh environmental conditions, even though these places might benefit more from ecological services than “safer” countries. For the authors, this constitutes an “increased regulatory risk to achieving regulatory milestones for NBS projects.”
Getting NbS certified today: Two examples
Every certification or standard that encompasses an ecosystem-based approach to foster human well-being and biodiversity benefits has its own purpose. Here we will mention two of the most prevalent certification bodies that allow companies to report on NbS in a methodical way. These are the Low-Impact Development Certification and the Wildlife Habitat Council Conservation Certification.
First, the Low-Impact Development (LID) Certification is an initiative led by the fund for Lake George in the USA (New York). Its primary goal is to foster sustainable water management across businesses. As mentioned on their website, its purpose is to “catch every drop of water from our built environment before it reaches a stream or lake, and reduce the non-point source pollutants to a level that is in balance with the natural systems of the waterbody.” Companies can test their performance in water management linked to NbS and only get certified if their score is high enough. The score is based on five categories linked to water management: protect, build, restore, maintain, and innovate.
The Wildlife Habitat Council (WHC) is another certification body from the USA and is dedicated to certifying NbS activities for companies all around the world. It is one of the biggest and most advanced certification bodies that relates directly to NbS as it is currently active in 28 countries. Essentially, they accompany companies from the planning phase to the self-assessment phase for all kinds of NbS investments around habitat conservation and management of working lands. Unlike the LID certification, which focuses on water, the WHC conservation certification focuses on all types of projects that require a deep understanding of ecosystems services and food chains. Companies that want to be certified do not need to have these investments linked to their core activity: projects can be independent of the sector of activity of the company.
To give you an idea of what they do, past projects certified by the WHC were linked to native landscaping, mangrove restoration, butterfly monitoring, and sustainable hunting to control deer populations.
For each project, the company must go through a 6-steps process to receive the certification at the end. It must also continuously engage in NbS projects to keep them up to date and be able to communicate their relevance to stakeholders.
To conclude this section, dedicated to NbS in the private sector, companies play an important role in the ecological transition and certifications can be helpful to increase the transparency of their activities. Certifications for corporate sustainability often emphasize the ability for companies to be both profitable and good for society and nature. This also encompasses certifications about NbS.
Although the topic of NbS is still being developed and academics are tidying up with typologies, research that focuses on the practicality of NbS already exists, and should continue to grow and evolve. Two examples of certifications were presented here: The Low-Impact Development Certification and the Wildlife Habitat Council Conservation Certification. Both are innovative and push for more environmentally responsible activities across the private sector in their own unique way.
Only time will tell if the “win-win” scenario, when investing in NbS, is realistic. For now, thanks to institutions and researchers there is increasingly more attention driven towards NbS from sustainability managers and communication departments, which is already very positive.