5 August 2005

Responsible Use of Natural Resources – Challenge and Opportunity for Businesses

New Environmental Study Shows Complex Interaction between Nature and Business

VIENNA, 5 August (UN Information Service) -- The wise use of natural resources will increase profits for businesses, says a new report titled “Ecosystems and Human Well-being: Opportunities and Challenges for Business and Industry”. The report is the latest in the Millennium Ecosystem Assessment (MA) series, a four-year international scientific assessment of the consequences of ecosystem change for human well-being. The authors of the report were supported by various experts from United Nations entities, such as the United Nations Environment Programme (UNEP) and the Food and Agriculture Organization (FAO). The report is a valuable contribution, particularly on Millennium Development Goal No. 7 -- ensure environmental sustainability -- in the context of the preparations for the 2005 World Summit to be held in September 2005 in New York.

The report provides a scientific appraisal of the current condition and trends in the world’s ecosystems and the services they offer. Ecosystem services are the benefits that humans obtain from natural resources, such as water, biodiversity, fibre, food, and climate, and they are produced by interactions within the ecosystem. The report urges companies to use nature more wisely or face higher costs and reduced profits in the future, and it suggests a benchmark for public policy, public awareness and the private sector at the national and international levels. The Millennium Ecosystem Assessment is at present the most comprehensive analysis of the complex ways in which people depend on and affect the environment. It provides a wide analysis of ecosystem status and trends, options for action and scenarios that explore the trade-offs that will occur.

Businesses interact with ecosystems and ecosystem services in two important ways: they use services and they contribute to ecosystem change. According to the report, ecosystem services that are freely available today will become unavailable or more costly in the future, if current trends continue. Business cannot function if ecosystems and the services they deliver are degraded or imbalanced. Solutions offered in the past are often inadequate given the present conditions of global change, and need to be re-thought and re-implemented. Businesses’ engagement in voluntary actions to reduce environmental impact can be an engine of positive change that produces new opportunities and preserves natural resources for the future.

Innovation and technology to minimize damage and to reduce the present occurring impact are creating important new business opportunities for those who are aware and prepared. Businesses will experience both direct and indirect consequences of ecosystem changes because ecosystem degradation is changing public policy, consumer preferences, supplier relationships, stockholder expectations, and competitor strategies, all of which vary by country and region. For example, increasing consumer awareness of environmental issues is exerting pressure on the aquaculture industry, favouring companies with more sustainable practices and policies.

Approximately 60 per cent of the ecosystem services examined in the Millennium Ecosystem Assessment are being degraded or used unsustainably. Actions to increase one service often cause the degradation of other services; for example, food production may be increased at the expense of water quality. Changes being made to ecosystems are resulting in an increased likelihood of potentially high-impact and abrupt changes in physical and biological systems, such as the emergence of disease, dead zones in lakes and rivers, and fishery collapses. According to the MA, future challenges for businesses will be to cope with increased regulatory constraints as governments seek to protect degraded services; the risk of reputation and brand image for businesses directly tied to threatened ecosystems and services; substantial cost increases for important inputs such as water or agricultural products; increased vulnerability of assets to natural disasters and, conflict and corruption in areas plagued by scarcity of ecosystem services. The MA identifies climate change as one of the most important drivers of pressure on and degradation of ecosystems and ecosystem services.

Several large multinational companies have subscribed to the Global Compact Principles launched by the United Nations in 1999 and have made a commitment to promote environmentally friendly technology, to adopt policies of environmental and social responsibility and to implement precautionary approaches to environmental issues. With tourism becoming the world’s largest employer and an important economic factor in many developing countries, private companies will perceive native forestlands, coral reefs, and other natural resources as vital business assets. The growing business of eco-tourism provides an example of shifting consumer preference for different ecosystem services and the opportunities they can provide.


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