Paying for Nature’s Services: a new frontier for companies
In 2010, the United Nations Environment Program (UNEP) released a study entitled the Economics of Ecosystems and Biodiversity (TEEB). The study concluded that the world is losing between US$2 trillion and US$4.5 trillion worth of natural capital each year as a result of urban development, land change, resource consumption, pollution, and climate change.1 Roughly 60 to 70 percent of the world's ecosystem functions are degrading faster than they can recover.2 The reliable flow of economically viable ecosystem services – such as timber regeneration, crop pollination, pest and disease control, and water filtration – that businesses and economies depend upon is increasingly threatened.
Financial markets and business managers have not historically accounted for the true cost of natural capital assets in traditional decision making analysis, primarily because such assets are either not priced, or because the price is set artificially low by governments that act as their stewards. Read more.