Updates in the Valuation of Ecosystem Services

Moderator: Michelle Lapinski, Director of Corporate Practices, The Nature Conservancy

Panelists: Mark Weick, Director of Sustainability, The Dow Chemical Company

Diane O'Connor, VP Environment, Health, Safety and Sustainability, Xerox

Ecosystem Services

The benefits people and businesses derive from ecosystems

Natural Capital

Coastal natural hazard protection

Air pollution mitigation via re/forestation

Freshwater supply

Photos: Jennifer Molnar

Value of nature

Company

Jennifer Molnar

Public

Biodiversity & Ecosystems

Business Message…and Action

• Nature has value to business – degradation is risk and business opportunity

• Natural capital is a productive asset alongside financial and human capital

• Leading from the “bottom up” –progressive private sector action – beyond one size fits all

• Not waiting for government to act, but ready to collaborate: $500B in commitments

http://corporateecoforum.com/valuingnaturalcapital

The New Metrics of Sustainable Business Valuation of Ecosystem Services: Xerox/TNC Partnership

Xerox Environment, Health, Safety and SustainabilitySeptember 27, 2012

With sales approaching $23 billion, we are the world’s largest enterprise for business process and document management.• Employees: 140,000 worldwide• Headquarters: Norwalk, CT• Chairman and CEO: Ursula M. Burns

Document Technology and Managed Print Services

Technology

Business ProcessOutsourcing

IT Outsourcing

Services

Xerox Today

Quantitative Approach

Value Chain Focus

Communicate “Wins”

Sustainability ProgramFundamentals for Success

Leverage Partnerships

Responsible Sourcing Responsible Use Responsible Disposal

Environmentally-sound papers:

• Forestry Practices

• Supplier Requirements for Paper Mills

• Environmentally Sound Paper Offerings

– (FSC, PEFC, SFI)

– Recycled Paper

Xerox equipment is designed for efficient use of paper:

• Print management features

• Recycled paper runs reliably

• On-ramp to digital document management

• Workflow SW tools

• Xerox paper, packaging, and prints are recyclable

Enabling beneficial management:

Steps Toward a Sustainable Paper Cycle

Responsible Sourcing Responsible Use Responsible Disposal

• % paper offerings FSC, SFI, PEFC, recycled

• % Suppliers responding to Xerox annual paper survey

• % certified fibers in Xerox papers

• De- inkability rating• Duplex rate (Managed Print accounts)

TNC Provides the Upstream SME for Xerox Goal of a Sustainable Paper Cycle

Sustainable Paper Cycle Metrics

Environmentally-sound papers:

Xerox equipment is designed for efficient use of paper:

Enabling beneficial management:

• High Conservation Value (HCV) Resource Network- promote, train, steer– Global Network– Indonesia Learning Network

• Support Implementation of the Canadian Boreal Forest Agreement • Certification- work with Xerox Suppliers and other Land Managers in select

regions of North America• Forest Carbon- develop & test broadly applicable methods (domestic & int’l) for

quantifying carbon from improved forest management– Serve as a platform for suppliers receiving potential carbon benefits

• 20% of tropical forests are slated to be logged

• 30-50% of logging impacts can be avoided while maintaining timber production

• Reduced impact logging rarely achieved

• Much work needed • Methodology – critical piece

The Nature Conservancy & Xerox Partnership Progress Report (2006 – 2012 YTD)

A Breakthrough Collaboration:The Economics of Ecosystems

Mark WeickDirector, Sustainability ProgramsThe Dow Chemical Company

17May 1, 2023

Driving the Next Generation of ChangeDow’s 2015 Sustainability Goals

Achieve at least three breakthroughs that will significantly

help solve world challenges

Publish product safety assessments

for all products

Achieve on average a 75% improvement of key

indicators for EH&S operating excellence from 2005 baseline

Achieve individual community acceptance ratings for 100% of Dow sites where we have a

major presence

Reduce our energy intensity 25%

Increase the percentage of sales to 10% for products that are highly advantaged by sustainable chemistry

Maintain absolute greenhouse gas emissions below

2006 levels

Valuing Nature – A Strategic Fit for Dow

•Access to ecosystem services •Product alignment to fit growing need•Project planning and stakeholder buy-in•Expansion/Permitting Process•Green Infrastructure•Remediation•Conservation Activities•Recognition of offsets or payments from ecosystem services on lands Dow owns

Pilot #1: Dow Texas Operations, Freeport

• Freshwater

• Coastal natural hazard protection

• Air pollution mitigation via reforestation

Freeport

2 4 6 8 10 1240

5060

7080

90Month

Tem

pera

ture

(F)

= potential range in 2050

= current average

Future Scenarios: Freshwater

More demand Less supplyhttp://www.nysun.com/opinion/houston-new-york-has-a-problem/81989/

Freshwater Analysis

Water Availability Model (W

AM)

Freshwater: Planning for Future Water

• Future value of water• On-site / off-site responses with greatest net benefit

Jennifer Molnar

Freeport Coastal Area

Plant BOyster Creek

Stratton Ridge

Plant A

Brazoria National Wildlife Refuge

San BernardWildlife Refuge

Outside of levee system

Largest Undeveloped

ParcelLake Jackson

Freeport Seaside

Coastal: Hypothetical Output from Cost-Benefit Analysis

Biodiv

ersity

/ESInd

icator

NetP

resen

tValu

e

PublicRecreation orFisheriesPublic Natural HazardMitigationDow Natural HazardMitigation

Do Nothing BuildMini-levees Restore/protect marshRestore/protect marsh

BuildMini-levees+

0

Air Quality

AIR QUALITY

Evaluating large-scale tree planting for air quality improvement

Expected output: •Cost-benefit and feasibility

analysis of “green infrastructure” project

Air Quality at Freeport: The Issues

• Freeport located in Houston-Galveston-Brazoria (HGB) non-attainment area for ground-level ozone (8-hr NAAQS)

Air Quality: Drivers of ozone levels

• Precursor emissions (NOx, VOC)

• Rising temperatures: – urban expansion/built-up– regional climate change

Air Quality: Reforestation

• Trees remove ambient pollutants (ozone, PM, NO2, SO2, CO)

• We can quantify this removal

• Tree planting is an EPA-approved measure for inclusion in SIPs for ozone

7bigspoons.com

Air Quality: Identify best sites for reforestation

• Biggest ozone and precursor removal

• Credit/offset generation for Dow

• Open land available for reforestation

• Suitability for reforestation • Conservation gains • Costs

Pilot #2: Brazil“Project Cabana”Dow-Mitsui JV: Santa Vitória Açúcar e Álcool (SVAA)

Polyethylene production from sugarcane Cultivation area: 200,000 hectares • Properties leased from local land owners.

Average property size: 200 hectares

Commitment to Brazil Forest Code • Designation of permanent preservation areas

(~20% land) • Tree replanting (10 for each tree removed) • Current regulation: Parcel-by-parcel basis

(inefficient)

Collaboration High-level Goals: • Develop an optimum selection of land for

sugarcane and conservation and implement with government approval.

• Optimize generation and value of ecosystem services to Dow and external beneficiaries, minimize farming cost

Questions?

Jennifer Molnar