Thank you to David Clarke for his April 10, 2020 interview and article that was published on April 20, 2020 in Inside EPA on the topic of Corporations and Biodiversity. Below is a copy of David’s article.
April 20, 2020
Corporations May Face Pressure To Accelerate Conservation Programs
April 10, 2020
Many corporations have been slow to adopt broad conservation programs despite the potential that such efforts could boost earnings, but that could change as stakeholder pressure rises for faster and more-aggressive ecosystem protection, says a top conservation biologist.
Mark Aspelin, CEO of the Profitable Conservation consulting firm and the author of a book describing how corporate programs could benefit both corporate profits and biodiversity, in an exclusive interview with Environment Next, says companies could increasingly face calls from shareholders and others for more-aggressive steps to protect habitats and biodiversity.
Aspelin says that, depending on their type of business and the scope of operations, companies adversely affect biodiversity in various ways — and can take steps to reduce those impacts. The impact points are frequently framed using the acronym HIPPO: habitat destruction, invasive species, pollution, human population, and overharvesting.
Pressure for additional conservation measures may arise as a result of the coronavirus spreading health emergencies across the globe, with the United Nations Environment Program posting a statement, “Coronavirus outbreak highlights need to address threats to ecosystems and wildlife.”
With the exception of human population, companies can impact biodiversity in all of the HIPPO areas, most notably through pollution and habitat destruction, which includes climate change. Mining, forestry, oil and gas development, agriculture, and other sectors all have impacts in these two categories, either directly or in their supply chains.
Other sectors have more industry-specific impacts. Shipping and cruise ships, for example, affect invasive species, such as zebra mussels which were brought into the Great Lakes in the 1980s and now have spread to inland lakes in 28 states. Overharvesting is the product of overfishing, which the Environmental Defense Fund has identified as “the most serious threat to our oceans.”
Aspelin began working with corporations in 1998, and in 2018 published his book, “Profitable Conservation: Business Strategies That Boost Your Bottom Line, Protect Wildlife, and Conserve Biodiversity.” In some cases, companies see opportunity to earn profit by embracing sustainability as their business brand, such as outdoor clothing company Patagonia, non-toxic cleaning products maker Method, green buildings, green roofs, and similar sectors.
In other cases, companies save money through pollution prevention, “design for the environment” approaches, building retrofits, and green infrastructure. Chemical company Union Carbide Corporation, for example, constructed a 110-acre “tertiary treatment wetlands” in Texas to comply with wastewater treatment standards, at a cost of $1.4 million as opposed to $40 million to construct a “gray infrastructure” treatment plant. Union Carbide is a subsidiary of Dow Chemical Company, whose chief sustainability officer Mary Draves in an exclusive interview with Environment Next described the corporation’s diverse sustainability priorities, including the circular economy and climate change.
In a municipal project, New York City bought land or used conservation easements covering over 130,000 acres to save the $10 billion cost of building a massive drinking water filtration plant, plus saving at least $100 million annually in operating costs.
“I hope those kinds of stories will play out on a much larger scale,” Aspelin says in the interview. Companies do engage in profitable conservation, but “it’s not mainstream by any stretch.” Corporate responsiveness “varies a lot,” depending on the issue, he notes. Corporations are “very much on board” when it comes to pollution because “it’s a language they speak already,” with an easily identifiable return on investment (ROI) from efficient production processes or from finding markets for their outputs, as with circular economy approaches.
Although habitat conservation is not yet “top of mind” for companies, Aspelin expects it will become a more widespread concern as stakeholder pressures for corporate sustainability become stronger, such as BlackRock CEO Larry Fink’s declaration in January that “climate risk is investment risk” and sustainability will be the $6.8 trillion asset manager’s “new standard” for investing.
Although habitat destruction and biodiversity do not have the same resonance with corporations as pollution prevention, climate change is now getting a lot of corporate attention, and company climate commitments indirectly provide biodiversity benefits because altered climate affects habitat composition and the distribution of species, Aspelin says.
Corporate responsiveness to climate change pressures “is relatively new,” Aspelin notes. “Back in the day,” when he worked with companies “it was up to us to figure out” the primary environmental impacts associated with the companies’ operations, he says.
With Coca Cola, for example, the main environmental impact issue was water, and climate change was not discussed. Regulatory compliance was a major driver, rather than realizing an ROI from investing in conservation, Aspelin says, noting that he worked with a number of sectors, including petrochemicals, oil and gas, railroads, and tourism.
To build awareness of corporate conservation benefits, Aspelin contributed a series of articles about profitable conservation to the E.O Wilson Biodiversity Foundation, which has embraced naturalist E.O. Wilson’s call for protecting half the Earth’s lands and seas for biodiversity and is pursuing a Half-Earth Project to advance that goal.
For now, state, federal, and international policies remain the most effective approaches to force conservation, including through the Endangered Species Act, wetlands conservation, and other approaches that use a regulatory “stick, not a carrot.” On the incentive side are carrots such as solar rebates for businesses, green roof tax incentives that save cities storm water management costs, and municipal incentives to join in circular economy systems. Corporate zero waste goals are also working as a voluntary approach.
While not yet mainstream, corporate efforts to protect habitats are occurring in some settings, such as in the oil-rich Permian Basin’s Pecos River watershed, in Texas, where the conservation group National Fish and Wildlife Foundation (NFWF) is touting its work with the Agriculture Department and major oil and gas companies to protect fish, wildlife, and their habitats in the area, suggesting the effort could serve as a model for other industries.
NFWF also works with Walmart on its Acres for America program, under which the retailer has committed to purchasing and preserving one acre of wildlife habitat in the United States for every acre of land the company develops, Aspelin notes. From 2005 to 2015, the program protected more than 1 million acres through 61 projects in 33 states, the District of Columbia and Puerto Rico, and Walmart and NFWF are now in the midst of a 10-year continuation of the program, which NFWF describes as “one of the most important public-private land conservation partnerships in the United States.” While he commends the Walmart programs, Aspelin says it remains “unusual” for companies.
Among emerging pressures on companies is the fact that conservation is a major issue on the environmental agenda this year. The United Nations Convention on Biological Diversity (CBD) is circulating a “zero draft” calling for urgent steps to protect 30 percent of all ecosystems and for economic sector reforms to reduce by at least 50 percent business and supply chain negative biodiversity impacts. Aspelin suggests that companies with large natural resource impacts would be the most likely to be affected by CBD commitments.
In addition, according to a March 18, 2020, Scientific American article, “Destroyed Habitat Creates the Perfect Conditions for Coronavirus to Emerge,” a number of researchers now believe that humanity’s destruction of biodiversity “creates the conditions for new viruses and diseases like COVID-19” and a new discipline, planetary health, has emerged “that focuses on the increasingly visible connections among the well-being of humans, other living things, and entire ecosystems.”
From a climate perspective, the pandemic’s resulting economic slowdown has produced huge pollution decreases, Aspelin says, but the focus remains on human health. — David Clarke
“Our world is increasingly transparent and we’re out to earn trust. When people shine a light on Walmart and see our decisions – the jobs we create, the activities in our supply chain – we want them to like what they see.” —Doug McMillon, CEO of Walmart
To continue our discussion from last week’s post about Walmart’s approach to biodiversity conservation, today we’ll focus on Walmart’s goal of Zero Net Deforestation.
To determine how to tackle this goal, Walmart first reviewed studies and learned that certain agricultural commodities, such as palm oil, soy, cattle, and timber, were driving most deforestation in the world, so that’s where the company decided to focus its attention. Walmart then sought to address the major drivers of deforestation in its operation and supply chain for each of these commodities, which we’ll highlight below.
Palm oil. In 2010, Walmart set a goal to sustainably source any palm oil that is used in its global private-brand products. The company also encourages its national-brand suppliers to source palm oil from sustainable sources. By the end of 2015, 100% of Walmart’s private-brand palm oil was sourced sustainably in accordance with the certification standards of the Roundtable on Sustainable Palm Oil (RSPO), which included the use of the following supply chain models: Mass Balance, Segregated, Identity Preserved, and Credits. In 2017, Walmart decided to adopt a more rigorous approach of only using the RSPO criteria of Mass Balance or Segregated supply chain systems, or equivalent standards, by the end of 2020.
What the heck does all of that mean? Here are the RSPO definitions that should help make things a bit clearer:
Identity Preserved Supply Chain Model: Sustainable palm oil from a single identifiable certified source is kept separately from ordinary palm oil throughout supply chain.
Segregated Supply Chain Model: Sustainable palm oil from different certified sources is kept separate from ordinary palm oil throughout supply chain.
Mass Balance Supply Chain Model: Sustainable palm oil from certified sources is mixed with ordinary palm oil throughout supply chain.
RSPO Credits / Book & Claim Supply Chain Model: The supply chain is not monitored for the presence of sustainable palm oil. Manufacturers and retailers can buy Credits from RSPO-certified growers, crushers and independent smallholders. RSPO’s traceability system for certified palm products is called PalmTrace.
As reported in its 2019 Environmental, Social & Governance Report, the breakdown of Walmart’s Palm Oil supply chain models is as follows:
RSPO Identity Preserved: 0.02%
RSPO segregated or equivalent: 12.87%
RSPO Mass Balance: 47.38%
Palmtrace Credits: 39.72%
In other words, Walmart has some work to do in order to transition away from the use of Palmtrace Credits (~40% of its supply chain methodology in calendar year 2018) in order to accomplish its revised 2017 goal. As result, Walmart is now looking for ways to move towards sources of certified, sustainable palm oil that have been physically verified. The company is also determining how it can best support an industry-wide movement as the industry transitions to 100% traceability for sources of palm oil.
Beef. In 2016, Walmart achieved its goal to only source “sustainable beef” that is not associated with deforestation of the Amazon rainforest by getting 100% of its Brazilian beef suppliers to participate in Walmart’s Beef Risk Monitoring System. To monitor its supply of beef, Walmart created a geospatial monitoring system that tracks suppliers, volumes, and over 75,000 registered farm locations, and the data are combined with maps that show where deforestation is taking place. The tool then analyzes Walmart orders to ensure that no beef comes from deforested areas. Beef suppliers are trained to manage geographical information at their slaughterhouses and input the coordinates of their suppliers’ farms into the system. The company is now working to expand the program to include cow-calf operations to address the risk that cattle might be traded from high-risk ranches to approved ranches, and the risk that ranchers who contribute to deforestation may re-register their operations under different names. As the program expands, other sensitive biomes outside of the Amazon will be included, such as the Cerrado tropical savanna ecoregion of Brazil.
Soy. Walmart is working with its supply chain and the Consumer Goods Forum to acquire soy through deforestation-free channels. Walmart supports an indefinite extension for the Soy Moratorium in the Amazon region of Brazil, which has helped reduce the amount of Brazilian soy that comes from deforested areas from 30% to 1%. The company also supports the expansion of the Soy Moratorium to other parts of Brazil where a similar approach is needed.
Pulp and paper products. To address deforestation through logging for timber, Walmart is working to reduce packaging materials and ensure that pulp and paper products are purchased from sustainable sources. The company set a goal of zero-net deforestation associated with its private brand products and is encouraging its national-brand suppliers to set similar goals. Walmart uses a Sustainability Index to measure and track supplier performance based on the percentage of virgin fiber. For the calendar year 2018, the percentage of private-brand pulp and paper volume certified by the Forest Stewardship Council, Programme for the Endorsement of Forest Certification, Sustainable Forestry Initiative, or is using recycled content, was reported to be 91%.
To help promote transparency and traceability across its supply chains, in 2017, Walmart joined the World Resources Institute and 20 other companies to launch Global Forest Watch Pro. Global Forest Watch Pro is an online platform that provides companies, banks and other stakeholders with data and tools for monitoring global forest loss due to the production of key commodities such as palm oil, soy and Brazilian beef. The online platform’s algorithms leverage the use of cutting-edge satellite technology and cloud computing to provide real-time information about where and how forests are changing around the world.
I hope you enjoyed this two-part overview of Walmart’s approach to biodiversity conservation. I’ll be back next week with a new topic or case study that highlights the role of corporations in protecting our planet’s biodiversity.
How Businesses Can Help Make Half-Earth a Reality: Reducing the Threat of Overharvesting
October 11, 2018, by Mark Aspelin
Part 5 of a 5-part series
So far in this blog series, we’ve been looked at the role of corporations in addressing three major threats to biodiversity: habitat destruction, invasive species, and pollution. In this fifth and final post, we’ll explore another big biodiversity threat: overharvesting.
“Overharvesting” is a broad term that refers to the harvesting of a renewable resource at a rate that is unsustainable. The term can apply to plants, fish stocks, forests, grazing pastures, and game animals. The motivation behind hunting, fishing, and plant collection may be for food, economic reasons, cultural reasons, or sport. Regardless of the reason, overharvesting implies that changes need to be made to current harvesting practices or else animal and plant populations may not recover. The result can be species extinction at the population or species level, and major ecosystem disturbances due to imbalances in predator–prey relationships.
Unfortunately, we’ve seen many examples of overharvesting over the years—everything from passenger pigeons, tigers, rhinos, and certain species of fish. Let’s look at passenger pigeons as an example.
When famous naturalist and artist John James Audubon was on a trip to St. Louis, Missouri, he noticed a sky that was darkened by a large flock of passenger pigeons flying overhead. He described the flock as having no beginning and no end, and the flock continued as a steady stream for three days. As the story goes, Audubon started to count the number of pigeons that he could see in the sky, but he soon gave up. There were too many to count. Today, it’s quite easy to count how many passenger pigeons are in the sky: zero. They are extinct.
In the late 1700s and early 1800s, passenger pigeons were one of the most abundant bird species in the world, with an estimated population of three to five billion birds. That’s twice the number of people on Earth at the time. In only 100 years, passenger pigeons were wiped out of existence, primarily through hunting.
The last verified record of a wild passenger pigeon was in March 1900, when a boy in Pike County, Ohio, shot the bird because it was eating corn at his farm. That left just a few remaining passenger pigeons in a single captive flock at the Cincinnati Zoo. Breeding attempts failed, and the flock dwindled until there was only one left: Martha. A US$ 1,000 reward was offered to anyone who could find a mate for Martha, but none was found. On September 1, 1914, Martha—the last known passenger pigeon—died at the Cincinnati Zoo at the age of 29. Martha’s body is periodically on display at the Smithsonian Institution in Washington, DC, and a memorial statue of Martha can be found at the Cincinnati Zoo aviary.
Even if you consider pigeons to be flying rats, the story of the passenger pigeon’s demise still represents a failure of epic proportions when it comes to fulfilling our responsibility to be good stewards of the environment.
In the 1800s, the idea that a species could be hunted to extinction was a foreign concept to most people. Now that we’re in the 2000s, I would like to be able to say that we’ve learned our lesson; unfortunately, we’re not quite there yet. Overharvesting is alive and well. For example, unsustainable fishing practices, such as bottom trawling and blast fishing, are still practiced today, and we’ve seen significant declines in several commercial fish populations, such as Atlantic halibut, to the point where their survival is threatened. Tigers and rhinos have been overhunted, primarily for traditional medicines derived from various parts of these magnificent animals. While it’s illegal to hunt and kill tigers and rhinos, the economic incentive from Asian medicinal markets is so great that the hunting of these endangered animals continues.
Thankfully, we may be rounding the corner for some charismatic animal species, such as the tiger. For the first time in more than a century, the world population of tigers is on the rise. The number of tigers has increased from 3,200 to 3,890 from 2010 to 2016. However, there’s still much work to be done to keep this trend heading in the right direction.
Let’s not forget about plants. Roughly 75% of the top 150 prescription drugs in the United States are based on natural sources, and over 25% of prescribed medicines in developed countries are derived from wild plants. We’ve also seen a multibillion-dollar boom in the herbal market, fueled largely by a desire to find “natural approaches” to medicine. In addition, up to 80% of people in developing countries are totally dependent on herbal drugs for their primary healthcare. When you add all of this up, it’s no surprise that medicinal plants are facing significant overharvesting pressures. Roughly 15,000 species of the 50,000 to 80,000 flowering plant species used for medicinal purposes worldwide are threatened with extinction from overharvesting and habitat destruction.
What Can Corporations Do?
The best way that most companies large and small can help prevent overharvesting is to “green” their supply chain. “Greening the supply chain” adds an environmental lens to traditional supply-chain management practices. Greening the supply chain is also an effective strategy for combating other biodiversity threats, such as habitat destruction and pollution.
Activities to green the supply chain may include a variety of environment-focused actions that guide a company’s interactions with its various suppliers, including:
Setting environmental standards that all suppliers must meet.
Creating performance goals, metrics, and supplier scorecards that are used to monitor and evaluate supplier performance over time.
Establishing a supplier-audit program to verify that suppliers have successfully implemented processes that are effective in reducing environmental impacts.
Improving business processes to reduce environmental impacts.
Identifying alternative materials that have a smaller environmental footprint.
Partnering with government agencies, industry groups, and nongovernment organizations (NGOs) to look for new ways to improve environmental performance.
Greening the supply chain is definitely a profitable-conservation strategy—just ask Dell Computer. Dell holds supplier-innovation summits to generate new ideas for improvements across all areas of the supply chain. For example, one supplier-innovation summit generated the idea that it can remove toxic paints from some of its computers and replace it with a much safer film covering.
Another Dell supplier came up with the idea to mix in straw grass with wood-based pulp for some of Dell’s corrugate boxes. Straw grass is a more quickly renewable resource compared to trees. In addition, straw grass is burned as a farming waste product in parts of China. Rather than burn the straw grass, it could be utilized in the corrugate boxes. Because of this suggestion, Dell now uses a mix of 30% straw grass pulp in some of its boxes. Dell’s innovation program has reduced supply-chain costs by roughly US$ 100 million annually for the past two years.
Dell is not alone. In 2013, Walmart announced that it saved US$ 150 million from supply-chain sustainability efforts in that year alone. General Motors established a reusable-container program with its suppliers and was able to reduce disposal costs by US$ 12 million while reducing environmental impacts. Texas Instruments saves about US$ 8 million per year through supply-chain management practices, such as reducing source materials and reducing and reusing packaging.
As you can see from the examples above, greening your supply chain can add real value to your business by cutting costs, driving innovation for new products and processes, improving customer and consumer perception of your company, and helping you meet or exceed environmental regulations and performance targets.
Greening the supply chain isn’t the only strategy that corporations pursue when it comes to preventing overharvesting. Some companies are leveraging their technology to help prevent hunting of endangered wildlife. Let’s look at Cisco Systems as an example.
Cisco Systems has partnered with Dimension Data on a Connected Conservation initiative to track rhino poachers at a game reserve in South Africa. Cisco and Dimension Data are using seismic sensors, drone cameras, thermal imaging, biometric scanning, and networking technology to track the movements of all humans who enter the reserve grounds. Park rangers use these new tools in combination with traditional sniffer dogs and trained soldiers on the ground to catch and deter poachers while minimizing disturbances to the endangered rhinos. The results have been impressive so far. The Connected Conservation initiative has been successful in reducing rhino poaching at the South African reserve by 96%.
In the future, this approach may be leveraged to protect other endangered species throughout the world. The main obstacle that prevents the spread of this technological approach is the US$ 1.5 million-per-year cost of the system. More and more companies are leveraging their products and technologies to develop solutions that directly help in the fight against overharvesting.
I hope you’ve enjoyed this blog series highlighting four of the major threats to biodiversity, and the role that businesses play in helping us get to Half-Earth.
Before I sign off, I want to provide you with one last reminder of the upcoming Half-Earth Day event that will be held on October 22, 2018 at the American Museum of Natural History in New York City. This year’s event includes a “Learning from Local Stewards” panel discussion highlighting key learnings from in-country indigenous and local community leaders, as well as a panel called “Half-Earth: How to Save the Natural World” that will be moderated by The New York Timescolumnist Thomas L. Friedman and feature E.O. Wilson and legendary recording artist Paul Simon. To learn more about Half-Earth Day, visit http://www.half-earthproject.org/half-earth-day. It’s going to be a great event.
Thanks for taking the time to read this blog series, and I look forward to meeting you at Half-Earth Day!
You may be surprised to learn that invasive species rank second only to habitat destruction when it comes to the biggest threats to biodiversity. In the United States alone, there are an estimated 1,000 invasive species. Some of these species, such as kudzu (pictured above), were brought in the U.S. deliberately, while other species, like the zebra mussel, arrived by accident. Regardless of how they arrive, invasive species can do a lot of ecological and economic damage. The overall economic cost of invasive species in the U.S. is estimated to be around US$ 120 billion per year.
One of the more infamous examples is the zebra mussel, which frequently appears on lists of the worst invasive species. Back in 1988, the zebra mussel hitched a ride in the ballast water of a transatlantic freighter, arriving in Lake St. Clair—a freshwater lake located between Ontario and Michigan. The mussel quickly spread to other watersheds, such as the Great Lakes and the Hudson River, by riding the currents and hitching a ride on anchors, the bottom of boats, and other human-mediated modes of transport. Zebra mussels like to attach to stable objects. Stable objects can take the form of clams and other mussel species, which they can kill by reducing their ability to move, feed, and breed. This is how the zebra mussel wiped out certain species of clams in Lake St. Clair as well as other freshwater mussel species in Ireland. It’s estimated that at least 30 species of freshwater mussel are threatened with extinction because of the zebra mussel. Other stable objects to which zebra mussels like to attach include water-treatment-facility pipes and electricity-generation infrastructure. The mussels grow in thick densities, which can block pipes and clog water intakes. As a result, corporations in these industries spend a great deal of time and money monitoring and removing mussels from their infrastructure, and companies in the shipping industry must manage their ballast water to ensure that invasive species aren’t along for the ride.
When it comes to invasive species, there are three basic strategies that corporations can adopt to manage the issue: prevention processes, early detection and rapid response, and restoration of native habitat.
The best—and most cost-effective—way to manage invasive species is to prevent them from entering in the first place. Of course, that’s easier said than done. To accomplish this, a company will need to implement a systematic process that monitors for high-risk invaders at critical control points such as wooden packing material, horticultural plants, and ship ballast water, as we saw in the zebra mussel example above.
While prevention is our first line of defense, no matter how many regulations or how much money we throw at preventing invasive species, some will continue to arrive. When they do arrive, we’ll want to have a second strategy in place to address this threat: early detection and rapid response (EDRR). The earlier we detect an invasive species, the better chance we have at eradicating before it before it multiplies and spreads, which translates into substantial costs and resources. Companies can participate in an EDRR system using their own staff, or by partnering with local universities, Native Plant Society organizations, and other trained experts to help with a baseline inventory and ongoing monitoring.
For the “rapid response” piece of EDRR, our goal is to eradicate—or at least slow down—the invasive species after we spot it. In some cases, scientists will recommend that a newly introduced species be tolerated and monitored, as the cost of eradication may be too great, and some invasions will recede on their own. In other cases, it’s time to act by using a variety of mechanical, chemical, or biological control techniques. Each of these control techniques has a variety of pros and cons that go beyond the scope of this short post.
The third strategy that corporations can take to combat the issue of invasive species is to restore habitat by removing invasive species and replacing them with native species. This may take the form of landscaping with native plants, planting meadows and gardens that are attractive to pollinators, and building wetlands or artificial ponds that provide water sources for local wildlife. For example, in Pacheco, Argentina, Volkswagen created an artificial lake near its facility to collect rainwater and provide a habitat for indigenous flora and fauna. This effort provides a natural landscape for the industrial center, and 62 species of birds have been counted at the lake.
For many companies, the value proposition for these three strategies to combat invasive species will come in the form of ecosystem services and more intangible benefits in the forms of employee satisfaction and fostering goodwill with customers, regulators, and the local community. For other companies, the proactive implementation of programs to prevent, detect, and respond to invasive species can yield more tangible cost savings. Let’s take another look at the zebra mussel’s impact on water-treatment and electricity-generating facilities.
In the United Kingdom, Thames Water spends £1 million a year on clearing zebra mussels from its raw water pipes and water-treatment facilities and applying heavy doses of chlorine to deter the mussels, while Anglian Water spends £500,000 a year tackling the problem. In the United States, zebra mussels are estimated to have cost municipalities and power companies over US$ 1.5 billion over the past 25 years. Another study came up with a cost estimate of US$ 267 million for all water-treatment and electricity-generating facilities from 1989 through 2004. These are big numbers. Any prevention, early detection, and rapid-response actions that corporations in those industries successfully implement can yield a significant return on investment.
Coming attractions: In next week’s post, we’ll turn our attention to the biodiversity threats of pollution and climate change. In the meantime, don’t forget to make plans to attend the October 22, 2018 Half-Earth Day event in New York City – it’s going to be a great event! To learn more about Half-Earth Day, visit http://www.half-earthproject.org/half-earth-day.
Habitat destruction is the #1 issue that impacts wildlife and biodiversity today. The term “habitat destruction” can refer to the complete destruction of a habitat or, more commonly, habitat fragmentation, where a large, continuous area of a habitat is divided into two or more fragments. The primary culprit behind habitat destruction is a change in land use. The most common forms include clearing land for agricultural use, extractive industries like logging or mining, and expanding urban or residential development.
There are five common strategies that corporations use to combat habitat destruction, four of which we will cover here: avoidance; minimization; rehabilitation and restoration; and biodiversity offsets and voluntary compensatory actions. The fifth major strategy—supply chain management—we’ll cover later in this 5-part series.
The first—and best—strategy that companies can adopt to address habitat destruction and biodiversity loss is a simple one: avoid any development or operations in areas identified as important habitat for species that are classified as endangered, threatened or vulnerable to extinction; or areas that have been identified as critical for the conservation of biodiversity because of existing species richness.
On land that is not categorized as an avoidance zone, corporations shift their attention towards minimization strategies that reduce the duration, intensity and extent of their impacts for biodiversity and wildlife. Minimization strategies can take a wide variety of forms, including site selection strategies, operational policies and procedures, wildlife corridors and green roofs. For example, to transport material and facilities needed for a project located near the fragile Tibetan plateau of the Sanjiangyuan National Nature Reserve, workers from the State Grid Corporation of China used an “Electricity Caravan” of horses rather than build roads or bridges in this ecologically sensitive area. In another example, companies such as Facebook, Macy’s, and Ford have installed green roofs, which not only save money, but also provide habitat for a variety of insects and birds.
In situations where avoidance and minimization are not practical or feasible, companies may turn to a third strategy: rehabilitation and restoration. With this strategy, a company attempts to rehabilitate degraded ecosystems or restore cleared ecosystems in areas that have previously been cleared, developed or neglected. In another example from China, The China National Petroleum Corporation (CNPC) pursued an ecological restoration effort as part of its Western Pipeline project. As soon as the new pipes were laid down and buried, CNPC planted vegetation to restore the original landscape and followed up with annual monitoring and remediation measures.
If avoidance, minimization and restoration strategies aren’t viable options, then companies may pursue a fourth strategy: biodiversity offsets and voluntary compensatory actions. A well-known example of a voluntary compensatory action is Walmart’s Acres for America Program, which has a goal to conserve one acre of wildlife habitat for every acre of land developed by Walmart stores.
So where does the Half-Earth Project fit in? The Half-Earth Project is creating a global map of fine resolution species distribution that will provide companies, such as Walmart, a unique tool for decision-making in support of biodiversity. The Half-Earth Map can be used to see where various species groups have rich or rare populations, so that companies can avoid development in these special places. The Half-Earth Map can also be used to identify the places that offer the best opportunity to offset biodiversity impacts through conservation management of land that is particularly rich in biodiversity. This tool can guide and ensure that conservation investments are happening in the optimal places for biodiversity while also showcasing the biodiversity value that these kinds of investments can bring to these places.
That wraps up our whirlwind tour of how corporations can address the biodiversity threat of habitat destruction, and how the Half-Earth Project can help corporations make sound decisions that are good for business and good for biodiversity.
In next week’s post, we’ll turn our attention to the #2 threat to biodiversity: invasive species. See you then!
When it comes to protecting half of the Earth to conserve biodiversity, we all have a role to play, and corporations are no exception. In fact, businesses of all shapes and sizes will play a critical role in making Half-Earth a reality.
In this five-part blog series, we’ll explore how corporations can address four of the five major threats to biodiversity, often referred to as HIPPO: habitat destruction, invasive species, pollution, and overharvesting. Climate change is part of “H” as it plays a major role in altering and destroying habitats. I’ll be providing you with some real-world examples of how companies are tackling these issues today. We’ll also look at how businesses can work with the Half-Earth Project to manage these threats to biodiversity.While the goal of Half-Earth is to protect half the land and sea in order to safeguard the bulk of biodiversity, this does not mean that large tracts of land will be fenced off and protected from human trespass. As anyone with on-the-ground conservation experience can attest to, conservation measures can’t be separated from human activities and interests. To be successful, strategies to protect biodiversity must be integrated with strategies that consider economic and social concerns.
The Half-Earth Project is busy working on a variety of initiatives to drive research, provide leadership, and engage people to participate broadly in the goal to conserve half of our planet. One important initiative that launched in March 2018 and was featured in a NY Times Op-Ed by E.O Wilson, “Mapping Earth’s Species to Identify Conservation Priorities” (https://www.half-earthproject.org/blog-posts/2018/3/5/mapping-earths-species-to-identify-conservation-priorities), is the creation of a cutting-edge biodiversity map that will support data-driven conservation. As the map takes shape in the coming years, we’ll no doubt discover that a significant chunk of the land that we would like to protect is either privately held or greatly influenced by the operations and purchasing decisions of corporations. The achievement of Half-Earth will, therefore, include broad stakeholder participation.
My hope is that this blog series will provide you with a glimpse of how we can bridge the gap between the efforts of corporations and 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 (e.g., reduced costs, reduced risk, and increased profits) and good for biodiversity (e.g., healthy species, populations, and ecosystems).
Next week, I’ll be focusing on the biggest threat to biodiversity, habitat destruction, and I’ll share some strategies and examples of how companies can address this issue.
In the meantime, I hope you’ll make plans to attend the October 22, 2018 Half-Earth Day event that will be held at the American Museum of Natural History in New York City. This year’s event includes a “Learning from Local Stewards” panel discussion highlighting key learnings from in-country indigenous and local community leaders, as well as a panel called “Half-Earth: How to Save the Natural World” that will be moderated by NY Times columnist Thomas L. Friedman and feature E.O. Wilson and legendary recording artist Paul Simon. To learn more about Half-Earth Day, visit http://www.half-earthproject.org/half-earth-day. I hope to see you there!
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.
We usually think it’s great when we have an edge, but that’s certainly not the case when we’re talking about habitat fragmentation edge effects and their impact on biodiversity and wildlife. In this post we’ll explore the topic of edge effects and how it relates to business and biology.
Habitat destruction is the #1 issue that impacts wildlife and biodiversity today. This fact shouldn’t come as much of a surprise. When we think of all the roads, power lines, buildings, clearcutting, and other development activities taking place all over the world, we can quickly get a sense of the widespread reality of this issue.
The World Wildlife Fund estimates that forests cover about 31% of the land area on Earth and, for a variety of reasons, we’re losing about 46,000 to 58,000 square miles of forest each year – roughly equivalent to losing 48 football fields every minute. In the Amazon alone, we’ve lost about 17% of the forest over the past 50 years, mostly due to forest conversion for cattle ranching. Habitat destruction is clearly a big issue, and it won’t be going away anytime soon.
The term “habitat destruction” can refer to the complete destruction of a habitat or, more commonly, habitat fragmentation, where a large, continuous area of a habitat is divided into two or more fragments. The primary culprit behind habitat loss, degradation, and fragmentation is a change in land use, usually in the form of agriculture, logging, mining, and urban or residential development.
There are three important conditions that characterize habitat fragmentation: smaller habitat, increased edge effects, and increased isolation. Today, we’ll focus on the second characteristic – edge effects, which refers to the effect of an abrupt transition between two different, adjoining ecological communities.
We can see examples of edge effects occurring naturally all over the place. These natural edges, such as the forest and meadow pictured below, can lead to greater biodiversity in the area.
However, the edge effects that I’m focusing on in this post are man-made edges that are created in the middle of an existing natural habitat. From a business perspective, habitats are commonly fragmented by the construction of roads, power lines, and buildings, or the clearing of land for agriculture and forestry.
In the context of habitat fragmentation, edge effects increase the proportion of habitat edges in relation to the total area. In other words, any given point within the fragment of land is, on average, closer to an edge. Why does that matter? Edges matter because they create changes in the species composition for a given chunk of land. These species-composition changes found at edges are caused by the following conditions:
Edges of a forest have microclimatic changes that impact the types of vegetation that can grow there. These microclimatic changes include more direct sunlight, higher soil temperatures, differences in humidity and depth of humus, and increased wind exposure and snow loads compared with the interior of a forest. The seeds of some plant species are sensitive to drying out with increased sun and wind, leading to significant differences in the types of vegetation found at a forest edge compared with the forest interior. To make matters worse, these species alterations extend into the forest interior. In some tropical rain forests, vegetation changes have been detected as far as nearly 1,500 feet from the edge. In the scenario where we have a small fragment of a natural habitat or a narrow corridor of land, the microclimatic changes associated with the edges can permeate throughout the entire piece of a habitat. The result may be a decrease in the presence of rare and sensitive species, while weedy species and generalist predators may thrive.
Edges are suitable for some species but unsuitable for others. If we build a road through a forest, some plant species will thrive with the extra sunlight, and some bird species will enjoy perches next to these open areas where they can pounce on exposed prey. “Edge species” such as deer and elk like forest edges because they can find food in open areas and take cover in the forest. Other species of animals will actively shy away from areas of increased sunlight and exposure, moving further into the interior habitat where the characteristics of land remain unchanged. For example, spotted owls (pictured below) prefer old-growth, mature forests with a lot of canopy and few edges. When we push these species into the now-smaller interior habitat, we are likely to see increased competition for limited resources.
Edge-tolerant species are often generalist predators and exotic species that outcompete native species and habitat specialists. Examples of edge-loving species include brown-headed cowbirds, crows, raccoons, and opossums. These species thrive in an edge habitat and act as nest predators and cavity competitors of interior species, which can decrease the populations of forest songbirds, ground-nesting birds, reptiles, and amphibians in the remaining habitat fragments.
Edges become areas with increased noise, light, pollution, human recreation, and roadkill. The increased noise, light, and human activity may cause some species to move further inland, away from habitat edges. Traffic on adjacent roads can cause pollution in the form of nitrogen deposition, and the increase in noise and light can deter or disorient animals. Roadkill continues to be a significant source of wildlife mortality with several million collisions per year reported worldwide. In one study in Saguaro National Park on the United States–Mexico border, an estimated 30,000 animals were killed by vehicles annually. This included a variety of reptiles, amphibians, birds, and mammals, such as the mountain lion pictured below at Saguaro National Park.
Business Strategies for Managing Edge Effects
To address the issue of edge effects, corporations typically use one or more of the following four strategies:
Avoidance: The first—and best—strategy that companies can adopt to address edge effects is a simple one: Avoid the construction of buildings, roads, trails, power lines, pipelines, etc. in areas with high-quality habitat for species that are classified as endangered, threatened, or vulnerable to extinction. This avoidance strategy may also be extended to a high-quality habitat for species that are classified as “species of concern,” depending on the health of the populations of those species as well as the degree and types of potential impacts. To identify these “avoidance zones,” you’ll need to conduct a biodiversity assessment to collect data about the species that are in the areas where you hope to develop or operate.
Minimization: For land that is not categorized as an avoidance zone, corporations shift their attention towards minimization strategies that reduce the duration, intensity, and extent of their impacts for biodiversity and wildlife. For example, some oil and gas corporations take steps to reduce the width of land cleared for the construction of a pipeline or road. In another example, the State Grid Corporation of China implemented an “Electricity Caravan” concept to minimize environmental impacts in a fragile plateau environment in the area of Sanjiangyuan National Nature Reserve (pictured below), known as “the water tower of China”. This project between Golog and the main grid of Qinghai needed to adhere to strict environmental and water protection requirements. To do this, workers from SGCC Qinghai Electric Power Company didn’t build any roads or bridges, but used horse caravans known as “Electricity Caravans” to transport the material and facilities needed for the project. This alternate mode for transporting materials also served to reduce edge effects compared with the normal practice of building a road or bridge.
Rehabilitation and Restoration: In situations where avoidance and minimization are not practical or feasible, companies may turn to a third strategy: rehabilitation and restoration. With this strategy, a company attempts to rehabilitate degraded ecosystems or restore cleared ecosystems in areas that have previously been cleared, developed, or neglected. In another example from China, The China National Petroleum Corporation (CNPC) pursued an ecological restoration effort as part of its Western Pipeline project. As soon as the new pipes were laid down and buried, CNPC planted vegetation in an attempt to restore the original landscape. In addition, CNPC adopted a higher design grade, increased the pipeline burial depth, enhanced the anti-corrosion grade of the pipes, and installed cut-off valves to prevent oil leakage in the event of any accidents. Since the project was launched in 2004, CNPC has followed up with monitoring and remediation measures on an annual basis to ensure that the restoration effort is a success.
Biodiversity Offsets and Voluntary Compensatory Actions: If avoidance, minimization, and restoration strategies aren’t a viable option, then companies may turn to a fourth strategy: biodiversity offsets and voluntary compensatory actions. The concept of a biodiversity offset is relatively simple. A company has a proposed project that will result in negative impacts to biodiversity at the target site. To offset that loss, the company enters an agreement to protect biodiversity at another site. The result is no net loss of biodiversity or, preferably, a net gain of biodiversity from the perspective of species composition, habitat structure, ecosystem function, and cultural values of biodiversity. Biodiversity offsets differ from philanthropic donations and other compensatory actions by linking the offset to the biodiversity impacts of a specific project. With voluntary compensatory actions, there is no formal link between the actual biodiversity impacts of the company’s development activities and the biodiversity gains from purchasing land for conservation.
Are these strategies “profitable conservation” strategies?
The short answer is, it depends. From a business perspective, the business case is not always attractive. In some industries, businesses are encouraged, and sometimes required, to implement these strategies in order to obtain permission to operate in certain areas. The permission to operate in these areas can lead to huge financial gains. In other cases, these approaches have fewer tangible benefits to the bottom line, but they can be effective risk-management strategies that are well received by regulators, customers, employees, and the local community.
From a biodiversity and wildlife perspective, anything that we can do to minimize impacts to the habitat they depend upon is a good thing. However, the reality is that the cumulative impact of development projects is taking a toll on the health of wildlife populations throughout the world.
Parting words and coming attractions
Well there you have it! I hope this post gives you a better idea about the topic of edge effects, why it matters from a biodiversity perspective, and the steps that businesses can take to minimize edge effects during planning and construction activities.
Next week, we’re off to The Netherlands, where we’ll be looking at oil and gas giant, Royal Dutch Shell, and it’s profitable conservation strategies that are good for business, biodiversity, and wildlife.