This week, we’ll focus on the role that companies play to address pollution, the third biggest threat to biodiversity. This post will also cover the special form of pollution known as climate change.
“Pollution” refers to the introduction of contaminants, such as chemicals, light, noise, or heat, into the natural environment where they may cause negative changes. For example, herbicides and pesticides cause harm to nontarget species, such as insect pollinators, and pose a risk to human health. The discharge of detergents, fertilizers, and sewage into aquatic systems can cause an excess of nutrients, such as nitrogen and phosphorus, which disrupt ecosystems by causing the overgrowth and decay of plants, algae, and phytoplankton. The result is a severe decline in water quality and the creation of an aquatic environment that promotes the survival of simple algae and plankton over more complicated plants.
Then we have the example of acid rain. The burning of fossil fuels generates air pollutants that can either remain in the air as particle pollutants or fall to the ground in the form of acid rain. The sulfuric- and nitric-acid components of acid rain can lead to the acidification of lakes, streams, and forest soils. Species of fish, amphibians, clams, snails, insects, and plants can have a difficult time surviving in acidic conditions. Fish eggs can’t hatch if the pH of water is too low, and fish species, such as salmon, may abandon their spawning areas. When fewer fish spawn and fewer eggs hatch, it creates fewer food options for predators. Acid rain also harms plants and trees by slowing their growth, damaging their leaves, and making the soil more toxic to plants. The key point is that pollution, in all its forms, can cause serious, widespread harm to wildlife and the ecosystems upon which they depend.
Then we have the special form of pollution known as climate change, caused by the release of carbon dioxide and other greenhouse gases into the environment. The biggest human-caused sources of these “greenhouse gases”—particularly carbon dioxide—are a result of burning fossil fuels and cutting down carbon-absorbing forests.
Increases in temperature can have a massive impact on wildlife. Some habitats may disappear due to rising sea levels, which are caused by the melting of mountain glaciers and polar ice sheets. Temperature changes have an impact on flowering and fruiting times for plants. They also have a significant impact on the habitat ranges that are occupied by animals. Biologists on the ground are witnessing significant shifts in habitat ranges and species composition in different parts of the world. Some species are showing up in areas where they haven’t been seen previously while other species are starting to disappear from areas where they were once abundant. I recently went to a presentation that showed slide after slide of striking shifts in locations where New Mexico birds have been spotted in the state over the past few decades. For species that can survive in a wide variety of habitat patches, climate change may not pose a major threat. However, species that are isolated in just a few habitat patches or are restricted to mountaintops may not be able to rapidly shift their distribution to survive.
What Can Corporations Do?
Fortunately, pollution is one biodiversity threat that corporations of all shapes and sizes are willing to address, at least to some degree. This is largely due to the thousands of pages of environmental regulations with which corporations must comply to ensure that processes and controls are in place for air emissions, wastewater and stormwater discharge, and hazardous-material transport and storage. However, regulatory pressure isn’t the only reason why corporations pay close attention to pollution. Many of the actions that corporations take to prevent pollution also produce significant cost savings. In addition, the approach that corporations need to take to address pollution include processes and ways of thinking that are familiar to them. When you talk about “minimizing waste” and “improving process efficiency,” you’re speaking the language of business. Waste minimization and process efficiency are topics that already get a lot of attention in corporations through a variety of initiatives, such as Lean, Six Sigma, and quality-management systems.
Companies typically adopt one or more of the following five strategies to address the threats of pollution and climate change: pollution prevention, carbon offsets, environmental design, green building, and green infrastructure. Let’s look at each of these strategies in more detail.
Strategy #1: Pollution Prevention. Most corporations have a pollution-prevention program or project in place, often using the well-known “reduce, reuse, and recycle” concept. Many of these pollution-prevention efforts are driven by regulations, following specific guidance from various regulatory agencies. Other pollution-prevention initiatives aim to go beyond compliance, driven by a company’s desire to identify cost-saving opportunities that also reduce pollution. Pollution-prevention activities that yield the greatest value for business and the environment will vary, depending on the company, industry, and location, but they typically include a combination of training programs, energy audits, “green IT” practices, transportation and fleet efficiency efforts, and initiatives to reduce food and beverage waste and unnecessary packaging. For example, Walmart created a tool for apparel buyers and sourcing teams to help them optimize the size of corrugated cardboard shipping cartons. As a result, Walmart was able to reduce the number of boxes shipped by 8.1 million in one year, saving 6.3 million pounds of corrugate, 7,800 metric tons of greenhouse gases, and US$ 15.3 million in operational costs.
Strategy #2: Carbon Offsets. Carbon offsets (also known as “greenhouse-gas offsets”) are a popular tool that corporations use to address climate change, where the company reduces emissions of carbon dioxide or other greenhouse gases in one area to compensate for emissions that are made elsewhere. This benefits companies by enabling them to meet regulatory requirements at a significantly lower cost compared with the effort and resources required to directly reduce emissions from operations. As for the benefits of carbon offsets to wildlife and biodiversity, the jury is still out.
Strategy #3: Environmental Design. A third powerful corporate strategy for addressing pollution and climate change is to design products, processes, or services in a way that reduces impacts to human health and the environment. This approach is often called Design for the Environment (DfE), and the concept has been around since the early 1990s. Companies like IBM, Hewlett-Packard (HP), and Philips use DfE to identify chemical alternatives that are better for the environment without sacrificing product quality or performance. These companies also look for ways to make it safer and easier to reuse or dispose of products at the end of a product’s useful life. For example, HP’s DfE program identified an opportunity to use recycled plastic instead of virgin plastic for most of its ink cartridges. This enabled HP to reduce greenhouse-gas emissions by 43 million pounds from 2013 to 2015, which is equivalent to taking 4,125 cars off the road for one year.
Strategy #4: Green Building. Green building is a well-known, cost-effective, environmental-management strategy that businesses have adopted with enormous success. Its popularity continues to grow thanks to numerous examples of green buildings that have yielded significant reductions in environmental impacts while providing a substantial return on investment. For example, in 2006, Adobe estimated a net-present-value rate of return of nearly 20:1 for the initial investment in its headquarters towers. The U.S. Green Building Council estimates that commercial building owners and managers will invest US$ 960 billion globally between 2015 and 2023 on greening their existing buildings. The primary areas of focus are expected to include the installation of more energy-efficient windows, lighting, plumbing fixtures, and heating, ventilation, and air conditioning systems.
Strategy #5: Green Infrastructure. Green infrastructure is similar to green building, but it can take some different forms than a building or roof. The term “green infrastructure” is defined differently by various organizations, but it generally refers to natural systems that are managed to address urban challenges, such as stormwater management, climate adaptation, clean water, and healthy soils. For example, Union Carbide Corporation, a subsidiary of The Dow Chemical Company, constructed a 110-acre wetland in Texas to serve the function of a wastewater-treatment facility. The wetland was 100% compliant from day zero with all discharge requirements. In addition, the constructed wetland has low energy, maintenance, and resource requirements with no need for pumps, additives, an oxygen system, or added water, and there are no biosolids to handle or dispose. Compared with a wastewater treatment plant, the wetland supports greater biodiversity of plants, animals, and micro-organisms. From a cost perspective, the US$ 1.4 million initial investment and operational capital pales in comparison to the US$ 40 million price tag for a gray infrastructure alternative. It’s a good example of a win-win, profitable-conservation project.
I hope this post gives you a better understanding of how companies can mitigate pollution and climate changes in ways that also benefit biodiversity and wildlife, and can help us get to Half-Earth. In next week’s post, we’ll turn our attention to the final biodiversity threat that we’ll be covering in this series: overharvesting.
Today we’ll look at the profitable conservation strategies for the #5 company on the Fortune Global 500 list – Royal Dutch Shell. Headquartered in The Hague, Netherlands, Shell has 86,000 employees that are located in over 70 countries around the globe. These employees support the company’s 43,000 gas stations and 23 oil refineries which produce 3.6 million barrels of oil equivalent for 30 million customers each day.
Shell’s operations are focused on the production, refining, and marketing of oil and natural gas, which is summarized nicely in the graphic below from Shell’s 2017 sustainability report.
Shell CEO, Ben van Beurden, states that if the Company wants to be the best, it must focus on four, equally-important things:
Create value for its owners, the shareholders
Be the most valuable company in its industry
Make its portfolio fit for the future in terms of carbon intensity
Create shared value with society
For that last point, create shared value with society, Ben van Beurden elaborated in an interview with the following: “We have to be seen by society as a force for good. This may mean different things to different people. It may mean we should invest in communities living close to our operations, do social investments. But it’s not enough. Create employment, pay taxes, develop local supply chains, help build institutions, and so on. True, all important, but not enough. What we need to do on top of all that is to go back to our core mission: to provide more and cleaner energy solutions. We must be seen as a force for good because we deliver better products that society really needs. And that’s why I reject the comparisons that people make of oil and tobacco, and oil and weapons. With those industries you cannot argue that the product drives something intrinsically good. It doesn’t drive societal prosperity. It doesn’t drive improvement in life. Ours does. But we have to demonstrate that it does, while always acting to reduce environmental impact.”
For its 2017 Sustainability Report, Shell used GRI version 4 reporting guidelines. In selecting content for its Report, Shell engaged with a variety of stakeholder groups to identify which topics to include in the Report, which topics to include on the company’s website at shell.com, and which topics to exclude. Note that the topic of biodiversity was identified as a topic to include in the Company’s Sustainability Report. Here’s a diagram that shows the criteria that Shell uses to determine which topics to include and exclude from the company’s Sustainability Report and website.
Now that we have our introductions out of the way, let’s see what profitable conservation activities Shell is engaged in across the world, particularly in the areas of biodiversity and wildlife conservation. In this post, I’ll focus on the various activities that Shell is pursuing to address the following four major threats to biodiversity and wildlife: habitat destruction, invasive species, pollution, and overharvesting. Get comfortable, because this is going to be a long post … Shell is engaged a wide variety of activities related to biodiversity and wildlife conservation.
To address the biodiversity threat of habitat destruction, Shell follows the strategies of avoidance, minimization, restoration, and biodiversity offsets. In the words of the Sustainability Report, “In our projects and operations, our primary aim is to avoid impacts on biodiversity and ecosystem services. Where avoidance is not possible we aim to minimize our impact. Where our operations have affected biodiversity and the communities who rely on biodiversity for their livelihoods, we take measures to help restore habitats or ecosystems. We look for opportunities to make a positive contribution to biodiversity conservation in the communities where we operate.” Let’s look at some examples of each of these strategies.
Avoidance: Avoidance refers to the strategy of avoiding development or operations in areas with a high-quality habitat for species that are classified as endangered, threatened, or vulnerable to extinction. An avoidance strategy may also be extended to high-quality habitat for species that are classified as “species of concern,” depending on the health of those populations and the degree and types of potential impacts. Since 2003, Shell has made the commitment that it will not explore for, or develop, oil and gas resources in natural World Heritage Sites. In addition, Shell conducts biodiversity assessments for any new major project or large expansions to existing operations, with the aim of avoiding and minimizing impacts on biodiversity and ecosystem services.
Minimization: Minimization refers to a broad range of strategies that are designed to reduce the duration, intensity, and extent of impacts to habitat for biodiversity and wildlife. There are a wide variety of different minimization strategies to consider – anything from implementing policies and procedures to creating wildlife corridors, installing green roofs, restoring land, and pursuing biodiversity offsets or other voluntary compensatory actions. Here are some of the key minimization strategies that Shell has implemented, along with examples.
Policies and procedures: Shell has a variety of policies and procedures in place to minimize impacts to biodiversity, particular in areas that are designated as critical habitat.
Creation of a Biodiversity Standard: In 2001, Shell became the first company in the energy industry to launch a biodiversity standard to guide its operations. The Company’s biodiversity standards are designed to be aligned with relevant international standards, including those set by the International Finance Corporation. The standard reads as follows:
“We recognize the importance of biodiversity. We are committed to work with others to maintain ecosystems, to respect the basic concept of protected areas, and to seek partnerships to enable the Group to make a positive contribution towards the conservation of global biodiversity. Shell companies will conduct environmental assessments, which include the potential impacts on biodiversity, prior to all new activities and significant modifications of existing ones; and bring focused attention to the management of activities in internationally recognized hotspots, including the identification of, and early consultation with, key stakeholders.”
Conduct biodiversity assessments: As we mentioned in the Avoidance section above, Shell performs biodiversity assessments for any new major project or large expansions to existing operations, with the aim of avoiding and minimizing impacts on biodiversity and ecosystem services. These biodiversity assessments are part of a larger environmental assessment that considers the potential environmental impact of its activities and how local communities may be affected before, during and after operations.
Develop biodiversity action plans: Before Shell begins a project in a sensitive environment, the Company creates a biodiversity action plans to help it identify and minimize impacts during planning, operations, and decommissioning. Biodiversity action plans include measures that are taken to restore habitats or ecosystems that are located near the Company’s operations. For example, to minimize the impacts of a new pipeline in Ireland, Shell decided to construct a pipeline tunnel under an estuary to minimize the impact on land and water habitats. Below is a photo of the landscape in Ireland that the pipeline crosses.
Publicly report on activities in IUCN Category I-IV protected areas: Shell looks for opportunities to further improve the way it operates in International Union for Conservation of Nature (IUCN) Category I-IV protected areas, and areas of high biodiversity value. For your reference, here’s a brief summary of the IUCN protected area categories and definitions:
Category Ia: Strict Nature Reserve. Category 1a protected areas are strictly protected areas set aside to protect biodiversity and geological/geomorphical features, where human visitation, use and impacts are strictly controlled and limited to ensure protection of the conservation values.
Category Ib: Wilderness Area. Category Ib protected areas are usually large unmodified or slightly modified areas, retaining their natural character and influence without permanent or significant human habitation, which are protected and managed to preserve their natural condition.
Category II: National Park. Category II protected areas are large natural or near natural areas set aside to protect large-scale ecological processes, along with the complement of species and ecosystems characteristic of the area, which also provide a foundation for environmentally and culturally compatible, spiritual, scientific, educational, recreational, and visitor opportunities.
Category III: Natural Monument or Feature. Category III protected areas are set aside to protect a specific natural monument, which can be a landform, sea mount, submarine cavern, geological feature such as a cave or even a living feature such as an ancient grove. They are generally quite small protected areas and often have high visitor value.
Category IV: Habitat/Species Management Area. Category IV protected areas aim to protect particular species or habitats and management reflects this priority. Many Category IV protected areas will need regular, active interventions to address the requirements of particular species or to maintain habitats, but this is not a requirement of the category.
Category V: Protected Landscape/ Seascape. Category V is a protected area where the interaction of people and nature over time has produced an area of distinct character with significant, ecological, biological, cultural and scenic value, and where safeguarding the integrity of this interaction is vital to protecting and sustaining the area and its associated nature conservation and other values.
Category VI: Protected area with sustainable use of natural resources. Category VI protected areas conserve ecosystems and habitats together with associated cultural values and traditional natural resource management systems. They are generally large, with most of the area in a natural condition, where a proportion is under sustainable natural resource management and where low-level non-industrial use of natural resources compatible with nature conservation is seen as one of the main aims of the area.
Partner with conservation organizations: Shell has formed active partnerships with conservation organizations such as the International Union for Conservation of Nature (IUCN), The Nature Conservancy, Wetlands International, Earthwatch, and the National Fish and Wildlife Foundation to better understand how to protect areas that are rich in biodiversity (critical habitats), develop nature-based solutions to address the global climate challenge, and to engage employees in conservation projects. Shell has been partnering with environmental NGOs for nearly twenty years. As Shell points out on its website: “Since 1999, Shell U.S. has contributed to 19 key environmental NGOs to protect more than 13 million acres of wetlands, converted old rail lines into hiking trails in state parks, cleaned shoreline with Shell volunteers removing 600,000 pounds of debris, and conserved more than 1.8 million acres of land.” Here are some examples:
The International Union for Conservation of Nature: Shell has partnered with IUCN on more than 50 initiatives over the past 15 years, with an emphasis on conserving and managing biodiversity in its operations and improving the way that Shell manages protected areas. For example, Shell and IUCN have been working together since 2004 to minimize the impacts on western gray whales at Shell’s operations in Sakhalin, Russia by taking steps such as rerouting a pipeline away from the feeding grounds of the whales. Here is a photo of an oil and gas platform off Sakhalin Island.
The Nature Conservancy (TNC): Shell has partnered with TNC for about 15 years on a variety of efforts. Here are a few examples:
Natural climate solutions: Shell is working with TNC to better understand how investing in natural climate solutions, such as large-scale reforestation, can help address the global climate challenge. These projects also provide Shell with carbon credits to offset emissions that it generates elsewhere.
Online tool to monitor migratory species: In 2017, Shell partnered with TNC to launch an online tool to monitor migratory species in the Gulf of Mexico and the Caribbean Sea, both areas where Shell has operations. This monitoring tool provides information on migration patterns and possible threats to fish, sea turtles, mammals, and birds.
Reducing the cost and rate of erosion of pipelines: In the Louisiana, Shell and TNC are working together to develop nature-based approaches to reduce the cost and rate of erosion along pipelines in the Louisiana coastal zone. To accomplish this, Shell and TNC plant vegetation and build oyster reefs to create living shorelines that restore wetlands, improve coastline resilience, and enhance local biodiversity.
Mapping biodiversity of watersheds in Colombia: In 2015, Shell and TNC completed a pilot project to map critical biodiversity in three watersheds of the central Magdalena River Basin (pictured below) in Colombia in an effort to better understand the potential impacts that Shell’s operations may have on local biodiversity.
Wetlands International: Shell has partnered with Wetlands International for about 10 years to identify ways to avoid or minimize biodiversity impacts, as well as identify opportunities to make positive contributions to wetland biodiversity and the services it provides to local communities.
Creating a biodiversity monitoring plan for Majnoon: Majnoon is Arabic for “crazy”, and in this case it refers to the large amount of oil in the Majnoon field in southern Iraq. The field covers nearly 500 miles and is estimated to contain 38 million barrels of oil, making it the third largest oil field in the world. The Majnoon field also happens to overlap with the Mesopotamian Marshlands (pictured below), the largest and most important wetland area in the Middle East, with more than 200 species of birds and at least 40 species of fish. Shell partnered with Wetlands International on a project that aims for sustainable oil field development and a positive contribution to marshland restoration, people’s livelihoods, and the institutional strengthening of Iraq.
Earthwatch Institute: For nearly two decades, Shell has partnered with Earthwatch on an employee engagement program called Project Better World. Through this volunteer program, Shell employees can take part in scientific expeditions at different locations around the world and then share their knowledge with colleagues and generate increased awareness of environmental and sustainability issues. Over the past 19 years, over 1,000 employees have participated, contributing around 49,000 work hours to environmental research.
The National Fish and Wildlife Foundation, and other conservation organizations in the US: Over the past 20 years, Shell has funded around 270 projects with various conservation partners in the US, including the National Fish and Wildlife Foundation, to support the protection, restoration and management of habitats in the Gulf of Mexico. These projects included the use of wetlands, reefs, marshes, and outer island barriers to reduce coastal erosion. In 2017, Shell joined the Killer Whale Research and Conservation Program, a public-private partnership to help the killer whale population recover in the Pacific Northwest by supporting projects that improve food supply and the quality and management of habitats.
Academic partnerships to protect oceans: Shell acknowledges that the biodiversity of the world’s oceans is at risk from a range of factors, including overfishing, climate change, and pollution from plastics. Shell gathers scientific data and knowledge from local communities to better understand the marine ecosystems in which it operates, and trains people in the community to help protect marine mammals in countries where the company operates. For example, in the Gulf of Mexico of the U.S., Shell collaborates with academic scientists by providing them with Shell’s expertise and technology – such as remotely-operated vehicles – to explore the depths of the ocean. This has led to sightings of rare species, including the discovery of what is thought to be a new species of octopus.
Creating green infrastructure: As mentioned in the partnerships section with The Nature Conservancy, Shell looks for opportunities to integrate natural systems into the design of its projects. For example, Shell provided funding for the Coalition to Restore Coastal Louisiana to support an effort to collect hundreds of tons of oyster shells from local restaurants to help rebuild oyster reefs and restore the state’s coastline. The oysters are clumped together to form reefs which trap sediment and help create shallow marshes and estuaries that serve as nurseries for one of the country’s largest commercial fisheries and a refuge for more than 5 million migratory birds. Humans benefit from this effort as well, since the reefs help shield homes, businesses, and ports from storms on the Louisiana coast. Below is a photo of collected oyster shells from the Shell-funded program to help restore Louisiana’s eroded coastline.
Site Selection: In Pennsylvania, Shell decided to build a petrochemicals facility on an existing industrial site that was used for about 100 years for zinc smelting. Shell decommissioned the old plant, recycled old equipment and waste products, and covered the site with special industrial liners and caps to protect groundwater, surface water, and construction crews. When areas of water on-site could not be protected, Shell created wetlands elsewhere that have now grown into healthy habitats for fish and vegetation. After consulting with local residents and community leaders, Shell also planted native trees along the nearby river to improve the appearance of the site. Shell is investing $80 million to mitigate the environmental impacts of converting the old zinc smelting site into a plant that will produce polyethylene.
Rehabilitation and Restoration: A third major strategy that Shell uses to address the biodiversity threat of habitat destruction is to rehabilitate and restore habitat. One of the largest restoration efforts is taking place in Nigeria where Shell Petroleum Development Company of Nigeria and its joint venture facilities are partnering with the Nigerian government and other operators to clean up sites that have been contaminated by illegal activities and operational spills. In 2011, The UN Environmental Programme report on Ogoniland recommended the creation of a US$ 1 billion Ogoni Restoration Fund to be co-funded by the Nigerian government, Shell Petroleum Development Company of Nigeria and its joint venture facilities, and other operators in the area. Since 2012, Shell has also worked with the IUCN to protect biodiversity and improve remediation techniques at sites that are affected by oil spills in Shell’s areas of operation in the Niger Delta. This has led to the creation of new initiatives, such as a Niger Delta biodiversity strategy and toolkit which provides guidance on restoring mangroves that will help strengthen its remediation and rehabilitation efforts.
Biodiversity Offsets and Voluntary Compensatory Actions: The fourth major strategy that Shell pursues to address the biodiversity threat of habitat destruction is the use of biodiversity offsets to compensate for development impacts. For example, in Australia, Shell acquired the Valkyrie property in 2015 as a biodiversity offset to compensate for clearing vegetation and habitat while developing gas resources. The Valkyrie property (pictured below) is located next to the Dipperu National Park in Queensland, and it contains large areas of eucalyptus woodlands, endangered brigalow woodlands, semi-evergreen vine thickets, riparian vegetation, and wetlands.
There is no mention of any efforts to address invasive species in Shell’s various reports and website. However, I am aware of the following example:
Invasive species monitoring and eradication in Puget Sound: In 2017, Shell’s Puget Sound Refinery in Washington awarded a US$ 10,000 grant to Northwest Straits Foundation to support efforts to monitor and eradicate local invasive species by the Skagit County Marine Resources Committee and its project partners. The grant is being used to purchase equipment to monitor European green crabs. European green crabs are an invasive species that is considered a threat to Puget Sound shellfish fisheries because it feeds on juvenile crabs, oysters, clams, and other shellfish, and it may compete with native fish and birds for food. The equipment will help “citizen scientists” monitor for green crabs in Padilla Bay and Fidalgo Bay near Shell’s refinery and at other sites in adjacent counties.
Pollution and Climate Change
Not surprisingly, Shell is engaged in a wide variety of pollution prevention and energy saving initiatives. Since this blog post is already running long, I’ll provide just a few examples to give you a sense of how Shell is addressing the biodiversity threats of pollution and climate change.
Spill response and prevention in the Niger Delta: The vast majority of oil spills in the Niger Delta are caused by crude oil theft, sabotage of pipelines, and illegal oil refining. In 2017, nearly 90% of the number of oil spills from Shell Petroleum Development Company of Nigeria joint venture facilities was due to illegal activities. The remaining 10% were due to operational reasons. Regardless of whether the oil spills were due to illegal activities or due to operational reasons, Shell takes steps to clean up and remediate areas impacted by spills that come from its facilities. If the spill is due to an operational issue, Shell also pays compensation to people and communities impacted by the spill. Shell works with government agencies, NGOs, and communities to prevent and minimize spills from illegal activity. Shell also conducts air and ground surveillance and installs anti-theft mechanisms on equipment and pipelines to mitigate illegal activities and to ensure that spills are quickly detected and addressed. Despite these efforts, the number of sabotage-related spills has increased from 48 in 2016 to 62 in 2017.
Managing water: In water scarce areas, Shell develops water management plans that describe the long-term risks to water availability and define measures to minimize the Company’s use of fresh water or prescribe alternatives to fresh water, such as recycled water, processed sewage water, and desalinated water. Shell treats its wastewater prior to discharge into the environment and, where appropriate, looks for ways to treat wastewater using natural solutions such as constructed wetlands. This approach helps Shell reduce the energy use associated with its water management operations. Shell has a water research laboratory in Bangalore, India that collaborates with NGOs, academic institutions, and technology firms to advance the development of technologies that increase rates of water recycling and reuse. Shell also advocates for common water management practices in the industry and has published, together with the University of Utrecht, an accounting methodology for water used in oil and gas operations.
Climate change and renewable energy: In 2017, Shell announced its goal to cut the net carbon footprint of the energy products it provides by around half by 2050. Shell adds that “this is an industry-leading aspiration that may need periodic recalibration in line with the pace of change in broader society and the wider energy system.” As an interim step, Shell is targeting a 20% reduction by 2035. These reduction targets include emissions from Shell’s operations, emissions from third parties who supply energy for that production, and its customers’ emissions from their use of the products it sells. In order to achieve these targets, Shell plans to invest in hydrogen and advanced biofuels for transportation, invest in electric vehicle charging, generate more renewable power, and advance technology to capture CO2 emissions and store them safely underground. Shell will also use natural solutions, including forests and wetlands, to naturally absorb emissions from uses where alternatives do not yet exist or will take time to reach commercial scale. Shell plans to produce more natural gas, which is the cleanest-burning hydrocarbon, and focus on reducing leakage of methane from its gas operations. Roughly half of Shell’s energy supply is derived from natural gas. To help ensure that greenhouse gas emissions are considered in the Company’s investment decisions, Shell uses a greenhouse gas screening value as part of its project planning and evaluation process. Finally, Shell plans to encourage countries and industries to switch from coal to lower-carbon natural gas, and shares best practices on how to keep CO2 out of the atmosphere.
There isn’t much discussion around the topic of overharvesting in Shell’s various reports and website. Shell’s primary strategy to address overharvesting is to encourage supply chain sustainability through the Company’s General Business Principles.
Supply Chain Sustainability: Shell works with its 33,505 suppliers to ensure that they follow Shell’s General Business Principles. These General Business Principles include a commitment to balancing short-term and long-term interests, and integrating economic, environmental and social considerations into business decision-making.
In its sustainability reports and company website, Shell doesn’t provide much in the way of return on investment data. Instead, the Company provides some data on how much they spent on certain initiatives. Here are some examples:
Energy efficiency: Between 2009 and 2015, Shell achieved a 6% decrease in the energy intensity (amount of energy consumed for every unit of output) of its refineries through improvements in equipment reliability and operating processes. Downstream energy savings, combined with changes in the refining energy mix to lower-carbon alternatives, has reduced Shell’s refining CO2 emission footprint by approximately 1.5 million tons each year. In terms of cost savings, these efforts reduced the total annual energy cost for 13 refineries by $2.5 billion. Between the years 2009 to 2015, Shell’s energy efficiency efforts reduced costs by approximately $100 million each year. In 2017, the overall energy intensity for the production of oil and gas increased slightly compared with 2016 data.
Maintain and Monitor an Artificial Reef: In the Gulf of Mexico, Shell decommissioned the Cougar platform, which produced more than 31 million barrels of oil over the last two decades. In 2017, Shell used a specially-designed vessel to lift the top part of the platform and deck and place it on a barge to be transported to shore for cleaning and recycling or disposal. The same vessel was then used to move the platform’s 345 foot-tall and 6,000,000 pound support structure across 50 miles of open water to its resting place as an artificial reef. Shell donated the structure to the Louisiana artificial reef program and made a $619,000 contribution to help maintain and monitor the reef, which will provide habitat for a variety of marine life such as red snapper and amberjack fish.
Community Skills and Enterprise Development: In the Philippines, Shell supports a community-based enterprise development and biodiversity program called Tourism and Business Through Protecting Nature. This program supports sustainable tourism through community involvement and creating alternative income opportunities that also protect and conserve the biodiversity of Palawan. In 2017, the program provided 67 local jobs and generated more than $90,000 in revenue from supported enterprises.
Research & Development: Shell spends about $1 billion each year on research and development to turn ideas into commercially viable technologies. This includes the development of fuels and lubricants that help customers use less energy, and technologies that improve the energy and water efficiency of Shell’s operations. Since 2009, Shell has invested over $1.1 billion in low-carbon R&D, primarily through investments in companies and technologies that are complementary to Shell’s existing business. For example, in 2015, Shell invested in GlassPoint for solar technology, Aquion Energy for energy storage (produces saltwater ion batteries that can store solar power for use at night), and Next Step Living – a company that helps homeowners improve energy efficiency and use more renewable energy. Shell also supports the global Carbon XPRIZE to foster new ideas in the areas of carbon capture and use, and is actively researching new transport solutions that include hydrogen technologies, advanced biofuels, and energy storage for electric vehicles.
Tailings: Over the past ten years in Canada, Shell has invested $355 million to develop technologies that speed up the drying process for fluid fine tailings that are generated when separating bitumen from sand. These tailings are stored in ponds, where the sand is allowed to settle at the bottom so that the water can be recycled and the solids can be used for reclamation. These processes are carefully managed to prevent contamination of local surface water and groundwater.
Charitable Giving and Local Investment: In 2017, Shell spent $189 million on social investments worldwide. Of that amount, 41% was required by government regulations or contractual agreements. Shell spent $111 million on voluntary social investments: $57 million of that amount was invested in initiatives that are aligned with Shell’s global themes of enterprise development, road safety, and energy access; $54 million was spent on local programs for community development, disaster relief, education, health, and biodiversity. The Company also established the Shell Foundation, an independent charity that applies a business approach to the global development challenges of access to energy and sustainable mobility. Since 2000, the Shell Foundation has given $279 million in grants to early-stage businesses and new market builders operating in Africa, Asia, and Latin America.
Local Procurement: In 2017, Shell spent $42.2 billion on goods and services from 33,505 suppliers worldwide, with $4.9 billion spent in countries that have a gross domestic product of less than $15,000 a year per person, and 80% of that money going to local companies. In 2015, Shell purchased $56.3 billion of goods and services from 52,000 suppliers worldwide: $37 billion (65%) of this amount was spent in Canada, the Netherlands, Nigeria, the UK and the USA and $5.9 billion (10%) was spent in countries that have a gross domestic product of less than $15,000 a year per person.
Training: In 2015, Shell spent $335 million (600,000 training days) on training and development for employees and joint-venture partners. This training focused on developing leadership capability, improving skills in technical, safety, and commercial areas, and improving expertise in specialist areas such as cultural heritage and indigenous peoples.
Shell is clearly doing a lot of work to minimize its impacts to biodiversity and it does a good job in sharing this information in the pages of its sustainability report and website. There are several areas where I think Shell can improve how its addressing the major threats to biodiversity.
First, Shell could set and communicate clear performance targets related to land use and biodiversity conservation. Shell’s key environmental goals are focused on reducing oil spills, reducing flaring in its upstream business, improving energy-efficiency, and reducing greenhouse gas emissions. In addition to these goals, Shell should set a target or goal to conserve a certain number of acres of wildlife habitat for every acre of land developed, or adopt a policy of no net loss (or even a positive gain) of biodiversity through its development activities and operations.
Second, Shell should share information about its efforts to address the #2 threat to biodiversity: invasive species. This is a common gap for most companies.
Finally, Shell could share more information about how it is greening its supply chain. This could be through the use of supplier scorecards and audits, or other approaches to help ensure that biodiversity impacts are being considered in purchasing decisions and supplier operations. The supply chain section of its sustainability report is very broad and does not mention how supplier environmental performance is being monitored and measured.
Despite its current focus on tangible cost saving initiatives such as energy efficiency, I was happy to see that Shell is also engaged in a wide variety of less tangible cost saving initiatives, such as the protection of biodiversity and oceans. It was refreshing to see that Shell has implemented a biodiversity standard to help guide its operations and operational decisions. However, I didn’t see any tangible goals associated with its biodiversity standard, other than the need to conduct a biodiversity assessment when certain conditions are met. To be fair, the sustainability report mentions that the goals presented in the report are just a selection of global metrics that are tracked within the company, so Shell could very well have quantifiable metrics and targets related to biodiversity and wildlife conservation. I will contact Shell to see if I can learn more about these metrics and will update this post with any relevant details.
As Shell expands its exploration and production activities in the coming years, there will likely be a significant amount of conflict between areas that are considered important for biodiversity conservation and areas that have significant amounts of hydrocarbon resources. It will be interesting to see how Shell resolves these conflicts, and whether or not the Company will factor in the economic value of nature’s services (natural capital) in order to give biodiversity sufficient weight in its operational decision making. Based on the company’s report and website, it’s good to know that biodiversity and natural resource conservation are considered significant factors in the Company’s operations and decision making.
For my next five posts, I’ve been asked by the E.O. Wilson Biodiversity Foundation to highlight the role of business in making “Half-Earth” a reality. Half-Earth is the bold goal to protect half the land and sea to safeguard the bulk of biodiversity. To learn more about the Half-Earth Project, visit www.half-earthproject.org
I wanted to send a quick thank you to the GreenBiz Team for featuring an excerpt from my book, Profitable Conservation: Business Strategies That Boost Your Bottom Line, Protect Wildlife, and Conserve Biodiversity, in today’s “GreenBiz Reads” column that it publishes each Saturday on www.greenbiz.com.
In this book, I focus on a key idea, which I call “profitable conservation,” meaning any action that benefits wildlife, biodiversity and business. A long list of actions may meet that criteria; however, as the late, great, personal development guru Jim Rohn used to say, “There are always a half-dozen things that make 80 percent of the difference” for any area of life. In this book, you’ll learn the half-dozen things that businesses can do that make 80 percent of the difference when it comes to benefiting wildlife, biodiversity and the bottom line.
The “half-dozen things” I selected are based on my work experience as a conservation biologist and corporate environmental manager. I’ve also added some insights from the numerous environmental lectures and conferences that I’ve attended over the years, including target audiences that wore tie-dyed and flannel shirts, animal costumes, camouflage and tailored suits. I feel comfortable in any of those settings and have learned that each of these perspectives represents a valid and important piece of the conservation puzzle.
While each audience may approach things from a different angle, they’re all interested in knowing the answer to the question, “What can we do to help protect biodiversity and the environment?” However, different audiences will take actions that are aligned with their expertise. For example, government agencies will create incentives and regulations to steer efforts in a direction that helps them move forward with their important conservation work; nonprofit organizations create conservation strategies and solicit donations from individuals and businesses to fund their important conservation work; corporate-sustainability managers develop a business case and pitch it to senior management to get approval and funding to move forward with their important conservation work.
This book will tackle, head-on, the big question with which corporate managers all over the world typically struggle: “What environmental investments are worth pursuing for my organization?”
Of course, the answer to this question is the ever-popular, “It depends.”
The answer depends on a variety of factors including company strategy, pressure from customers and competitors, and the regulatory environment. To help you answer this question for your organization, we’ll look at success stories from a variety of corporations and industries and discuss the key factors that you should consider in determining if a strategy is a good fit for your business.
While biodiversity and wildlife conservation may not be a top-of-mind priority for many companies today, it will become more of a concern in the years to come. Biologists are alerting us to the fact that we’re experiencing major losses of wildlife habitat and biodiversity throughout the world, and they’re taking steps to minimize the damage. Corporations, on the other hand, are expanding operations and hoping to grow. It’s just a matter of time before the actions of corporations and biologists collide. Corporations will face increasing stakeholder scrutiny and pressure to do their part to protect our planet’s biodiversity and wildlife. This is already happening in some industries, and this trend will continue to increase as we witness the extinction of more species.
As a conservation-biology and corporate-sustainability geek, I’m passionate about biodiversity conservation and the role of corporations in protecting biodiversity. Corporations play a critical role in biodiversity conservation. After all, corporations own a significant chunk of the land throughout the world, and their operations and purchasing decisions have direct and indirect impacts on our planet’s biodiversity and limited natural resources.
This book attempts to bridge the gap between the efforts of corporations and the efforts of biologists to protect our planet’s wildlife, biodiversity and natural resources. Fortunately, conservation versus profit is not a zero-sum game where the winner takes all. There are many win-win scenarios, which are good for business (reduced costs, reduced risk and increased profits) and good for biodiversity (healthy species, populations and ecosystems).
I’ll provide a clear action plan on what corporations can do to help protect biodiversity and wildlife as well as guidance on how you can implement those strategies in your organization.This book is divided into three parts:
In Part 1, we’ll look at the corporate and biologist perspectives on the topic of biodiversity and natural resource management, including a primer on corporate environmental-management strategies to help you better understand how companies manage natural resource and environmental issues. Then, we’ll put on our conservation-biology hat and see how biologists view the topic of biodiversity conservation and discuss the all-important business case for biodiversity and natural resource conservation.
In Part 2, we’ll dive into various profitable-conservation strategies that corporations can choose, which have the potential to benefit business and biodiversity, along with guidance on how to implement these strategies. Each chapter will close with a list of action items to help you identify your best course of action for that topic.
In Part 3, we’ll walk through four case studies that feature businesses from a variety of industries. This will give you a better idea of how other companies approach and practice biodiversity and wildlife conservation. These companies aren’t perfect, but they provide a good representation of the broad spectrum of profitable-conservation approaches that companies are taking to protect wildlife and biodiversity. Then we’ll close with a call to action that applies to each us, as individuals, regardless of what we do for a living.
As you’ve probably figured out by now, I’ve written this book in a conversational style, which I hope you’ll find easier and more enjoyable than a traditional textbook. To increase the odds that you’ll finish this book, I’ve also decided to keep it short and to the point. I won’t try to impress you with technical jargon, complex theories and academic references. Instead, I’ll provide just enough information to help you identify action steps that make sense for your business along with key points that may help you sell your ideas to senior management. If you walk away with one to three ideas with which you’ll experiment in your organization or your own life, then I’ll consider this book to be a fantastic success.
As someone who’s been in the trenches, implementing corporate-sustainability and conservation-biology programs and projects, I’ll stick to what I know best: sharing best practices and ideas on how to develop and implement profitable-conservation strategies for your organization.
Well, enough of my yacking. Let’s dive into the world of profitable conservation.