Mark Tercek, a former partner at the investment firm Goldman Sachs, is president and CEO of The Nature Conservancy.
People have typically valued nature either sentimentally, or else as a bunch of commodities – raw materials – whose value is based on what it costs to extract them and what price they ultimately bring on the market. Now, everyone from farmers and fishermen to bankers and financiers are waking up to two vital facts: We depend on nature in far more complex ways than we knew, and natural capital is not inexhaustible.
Environmentalists generally believe in nature’s inherent value. That idea is the bedrock of the environmental movement. However, environmentalists cannot persuade everyone to think along the same lines. Focusing only on the innate wonders of nature risks alienating potential supporters and limits the environmental community’s ability to reach a broader audience and to mine new sources of ideas. The “Isn’t nature wonderful” argument can leave the impression that nature offers solely aesthetic benefits, or worse, that nature is a luxury only rich people or rich countries can afford. We need to get business, government, and individuals to understand that nature is not only wonderful, it is also economically valuable. Indeed, nature is the fundamental underpinning to human well-being.
One way is to connect nature to what concerns people most – how to make lives better, protect health, create jobs, and strengthen the economy. Whether they grew up in the city or the country, in the United States, Brazil, or Indonesia, and no matter what they’ve studied or read, every person shares these concerns. In many places around the world people believe they have more pressing concerns than conserving nature, and those concerns will take precedence unless they better understand what nature provides.
Putting a value on nature is a tricky and even controversial task. Environmentalists tend to love nature for its own sake, and love being outdoors, and believe their children and generations beyond should inherit a world as vibrant and as diverse as the one they experienced. These are all enormously important reasons to protect nature. A business perspective, however, reveals other, perhaps less lofty but no less important reasons for doing so – for example, securing the clean water nature provides, and the timber people need to manufacture houses and furniture. Valuing nature does not mean replacing one set of compelling arguments for nature with another, but it provides an additional and important rationale for supporting the environment.
Thinking about the value of nature leads to other ways of thinking familiar to business analysts. For example, concepts such as maximize returns, invest in your assets, manage your risks, diversify, and promote innovation are the common parlance of business and banking. These are rarely applied to nature, but they should be.
Viewing nature through these basic business principles focuses more attention on the benefits of conservation. You many not be a conservationist, but you will realize that conservation – protection of nature – is a central and important driver of economic activity, every bit as important as manufacturing, finance, agriculture, and so on.
Conservation and business need a more sophisticated and nuanced calculation, one based on sound financial principles and a deeper appreciation for how nature contributes to economic and ecological well-being. When conventional economics leaves natural capital out of the equation, both ecosystems and the economies built upon them are imperiled.
The good news: Investing in nature is a great deal. If you set aside the benefits to nature and take a steely-eyed look at the bottom line, the opportunities are too good to pass up. The case for investing in nature is inspiring and ultimately optimistic.
People in Iowa, for example, have found that “letting floodplains be floodplains again” (in the words of one municipal engineer there) can reduce the risk of destructive and expensive floods. In 2010, the state legislature voted to create a fund to restore wetlands and restore water quality. Another example: Sugarcane farmers in the Colombia’s Cauca Valley have learned that restoring degraded forests and keeping cattle out of headwaters areas can reduce problems they are having with river sedimentation. A study by The Nature Conservancy and others found that farmers could cut the sedimentation rate in half by spending $1 million to $3 million on reforestation projects per year for eight years – and in that scenario would not have to cut back on their growing season. In short, as little as $8 million invested in conservation could yield more than $45 million in savings.
More good news: Investing in nature transforms the way people see their place in it. Time after time, people – farmers in Iowa, sugarcane growers in Colombia, jet-setting corporate executives – who absolutely do not think of themselves as environmentalists have come to realize that their lives and livelihoods depend on healthy natural systems. They are attracted to particular investment in nature for the specific, practical returns they hope to receive from it. When the investment pans out, as it usually does and will do more and more as investors become more sophisticated, the result is a whole new outlook.
A new valuation of nature, one that integrates conservation values and human development, science and economics, means seeing things whole; if we want a successful business, a livable city, a green, diverse, and vibrant planet, we have to take nature into account, and recognize the real value of the services nature provides.
An age of limits and scarcity does not mean an age of want. It does, however, mean an age of care, of stewardship. All of our actions must heed and respect nature. As stewards of the land have long known, with care even badly damaged places can be renewed, perhaps not as exact replicas of what they were, but vibrant and life sustaining nonetheless. The continued resilience of many threatened ecosystems gives us hope. That, too, is a value of nature.
Excerpted with permission from Nature’s Fortune: How Business and Society Thrive by Investing in Nature, by Mark R. Tercek and Jonathan S. Adams. Available from Basic Books, a member of The Perseus Books Group. Copyright © 2013.
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