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Mark Tercek

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Making the Business Case for Conservation

Posted: 02/ 3/2012 11:48 am

What is the business case for conservation? Just a few years ago, I don't think many people in either the business or conservation communities would have thought to even pose that question, let alone try to answer it in a meaningful way. But times are changing. The challenge for both of our communities is to think big, beyond the next factory or the next land deal, beyond the next quarter or the next fund-raising campaign.

Companies have been reporting on their sustainability efforts for years. That is not news. The difference today is the urgency of those reports; sustainability is moving from the fringes to the core business decisions companies must make and the fundamental questions they must answer: what are the risks to our business, and how can we minimize them? How can we keep costs down? Where are the new markets and the new opportunities?

In ways unheard of until now, the answers to those questions rest in part on understanding how every company relies on something they usually take for granted and get for free: services from nature like clean water and flood protection. In the coming decades those services will be neither guaranteed nor free, and the companies that will thrive are those that start paying attention to those realities today.

Take Dow Chemical, for example. The Dow complex in Freeport, Texas, is one of the company's largest and accounts for more than one-fifth of its global production. The dozens of production plants on the site cover more than 5,000 acres and employ about 10,000 people. The site was perfect when the company began construction in 1940 -- on the Brazos River, near a fine harbor, with natural gas reserves and salt domes nearby.

As the Freeport site grew, so did the need for freshwater. At the same time, other users required an increasing share: nearby cities grew, and agriculture grew as well. Most worrisome, though, might be the changes in climate, with worsening droughts and forecasts of more to come on the one hand and forecasts of increasingly severe storms in the Gulf of Mexico on the other.

The math is simple: demand for water is going up, supply is going down. The solution, while neither simple nor certain, may be revolutionary. Not so long ago a company like Dow might have addressed such a challenge by only considering its own efficiency efforts, or building a pipeline, a reservoir, a dam. But today the company understands the need to think big, to see its operations in the context of the broader landscape, and it appreciates the value of the natural systems that can provide freshwater, storm protection and other services into the future.

Scientists from The Nature Conservancy are now working with Dow to assess the value of water and the role that marshes, forests and other ecosystems play in maintaining water flow. Then, with the full picture, Dow hopes to be able to plan better for current and future availability of water from the Brazos River to both its own operations as well as for other stakeholders in the area -- including nature. We believe that our assessment will lead to more awareness of the need for conservation in the Brazos. Toward that end, we are assessing supply and demand trends to create models of future water availability in the river; identifying "green" and "gray" infrastructure options that could help maintain water flow; and analyzing the economics of those options to understand which ones will produce the most value for water users, including Dow, and the environment.

Can working with a company like Dow be a benefit to conservation? Yes. While Dow has a huge environmental footprint, it has also come to understand that it materially depends on natural capital and has committed to consider nature when making business decisions. This collaboration will extend far beyond a single corporation. We will try to show how important it is for all companies to value the nature that sustains industries, people and so much more: the oceans that provide seafood; the forests that provide the trees for paper products; and the rivers that provide fresh water.

Dow's example could prove that environmental conservation isn't just good for nature; it can be good for business, too.