This week IBM will receive the World Environment Center’s Gold Medal Award, so we asked students at the University of Michigan’s Erb Institute for Global Sustainable Enterprise to share their views on sustainability (we’ve included a video to show what IBM is doing to make the world smarter). From Berry Kennedy:
Corporate sustainability strategies are common practice in today’s corporate America, going far beyond a company’s environmental footprint, to becoming a central part of company strategy. Sustainability challenges companies to think about themselves as part of an integrated social and natural network. This type of “systems thinking” drives the emergence of new ways of business thinking.
Systems thinking includes an array of techniques that consider process, product or strategy within a larger context. Two of the more familiar concepts linked with systems thinking are industrial ecology and life cycle analysis. But a third concept — ecosystem services – is the next big challenge, requiring that companies consider how nature’s interacting pathways lead directly back to business success.
Businesses rely on key ecosystem services like air purification, water provision, or storm surge protection, and these services are not as abundant as they once were. For example, the USDA has estimated that honey bees provide over $15 billion in value to US companies and consumers (for free). However, a mysterious decline in US honey bees (Colony Collapse Disorder) has caused business to consider the costs and benefits of the pollination service they provide.
But, while the lack of ecosystem services can be a liability, their presence can be the source of unrecognized business opportunities. In fact, according to the World Businesses Council for Sustainable Development, global business opportunity in natural resources, largely from ecosystem services, is estimated to be as much as $2-6 trillion USD by 2050.
To fully evaluate ecosystem services risks and opportunities and include them in financial bookkeeping, corporations must think with a new “environmental brain,.” The ecosystems perspective considers global (e.g. the service of climate regulation) and local (e.g. fresh water provision in the local watershed) scales; values immediate expenditure with long-term paybacks and establishes novel partnerships. It thinks in non-linear terms, looking for feedback loops, tipping points, synergies and other complex relationships.
New methodologies that help businesses manage ecosystem risks and opportunities have been developed (such as the World Resources Institute’s Corporate Ecosystem Services Review, which as of March had been used by 300 companies). There is a real need for additional tools and complex information technology platforms to take us to this next level. Integrated software could help collect and synthesize the massive volumes of disparate information necessary to think systemically about corporate activities and their place within the broader environment of ecosystem services.
The “environmental brain” has exciting potential to create unexpected payoff. A systems perspective may reveal how seemingly unconnected business units can benefit one another. Insight gained from managing resources shared with diverse stakeholders can foster beneficial public-private or industry relations (they say you cannot pick your family…you cannot pick who you share your ecosystem with either…). New skills synthesizing regulatory, social and financial data can be used to advance processes or products .Systems thinking impacts, not just sustainability performance, but also business thinking, spurring innovation that benefits the bottom line, as well as the planet.
Berry Kennedy is a MBA/MS Natural Resources student (Class of 2014). Prior to school, she worked as Development Coordinator for the Mexican Fund for the Conservation of Nature, Latin America’s largest national environmental fund.