In response to increasing requests from members for guidance and collaboration on corporate environmental strategy, Business for Social Responsibility (BSR) has published "
The New Markets for Environmental Services: A Corporate Manager's Resource Guide to Trading in Air, Climate, Water and Biodiversity Assets.” This new 63-page resource guide explains market-based mechanisms related to the environment and provides the information that corporate managers need to assess the risks and opportunities associated with the emerging concepts of environmental services and growing domain of environmental markets.
In 2005, results from the World Resources Institute's Millennium Ecosystem Assessment, a study of 1,300 scientists and 95 countries, suggested that over 60 percent of environmental services — including clean air and reliable water flows - are being degraded faster than they can recover. "Businesses rely on well-functioning ecological systems for raw material inputs, water needs, energy sources, real estate value and production process inputs," said Emma Stewart, Ph.D., director of environmental strategy at BSR. "While these services are essential to the operating infrastructure of all businesses, they have seldom been recognized as such and are increasingly on downward trends."
The response of many environmental advocates - in regulatory, scientific, and advocacy roles - has been to seek out new approaches to conservation and incentives for restoration. Environmental markets, some regulatory and others voluntary, are trading credits as well as derivatives. Regulatory environmental markets are operating in Europe, the United States, Australia and other countries around the world. Voluntary markets and business-to-business "payments for environmental services" (PES) deals are also underway, in both industrialized and developing countries.
"These markets and transactions are sending price signals about environmental values," said Sissel Waage, Ph.D., co-author of the resource guide and part of BSR's research and development team. "The result is that businesses can place a financial value not only on environmental compliance, but also increasingly on voluntary actions."
BSR's "
New Markets for Environmental Services" is a valuable reference tool based on interviews with dozens of researchers and practitioners around the world. It describes the various market mechanisms and provides illustrative case studies, materiality assessment resources, as well as lists of service providers and potential partner organizations. BSR would like to thank BG Group, BP, Chevron and Shell for their thought partnership in the Environmental Markets Initiative and seed capital for this resource guide, which is available at
www.bsr.org/reports/BSR_environmental-services.pdf.