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Science in the TNC-Dow Collaboration: The Business Case for Conservation

Molnar, Jennifer 4/16/2012

If the Conservancy is going to be successful moving forward, corporations need to be a part of our conservation solutions. Corporations are the major drivers of change in the natural world; the decisions they make heavily impact everything from land use and conversion to water quality and availability to the abundance of fish and other ocean resources. To not reckon with this force would be a dereliction of our mission as a conservation organization.

Fortunately, our leverage with corporations has never been greater. More and more companies realize that they rely on nature to secure the sustainability of their bottom line. Ecosystems provide myriad benefits for corporations — from raw materials (e.g., timber, agriculture, forests filtering water supply) to the protection of facilities from natural disasters (e.g., storm buffers of coral reefs and salt marshes, flood protection from marshes). And how corporations treat nature — or even the perception of how they treat nature — can influence how regulators and the public allow them to do business.
So there are numerous economic reasons for companies to consider how they rely on and impact the environment. Through our 5-year, $10 million collaboration with Dow Chemical Company, the Conservancy is looking to make the economic case for investing in nature — not just to Dow, but to corporate culture at large. Our hypothesis: If companies consider the often unrecognized benefits from nature, that consideration will lead to improved outcomes for both business and the environment.
The Value of Nature to Business
Before getting into the guts of the collaboration, let’s first define our terms. What do we mean by the “value of nature”?
Our collaboration agreements with Dow refer to “biodiversity and ecosystem services,” with ecosystem services that benefit not just the company, but the public as well. Yes, we are analyzing how Dow’s decisions affect the private benefits that it receives from ecosystems. But we are also analyzing the benefits nature provides to the public and the ecosystems themselves — and feeding that information to Dow for use in its decision-making as well.
To bring these values of nature into corporate decisions often requires some translation. In some cases, we can assess dollar values of benefits to Dow and communities, but that isn’t always the case. For example, when assessing the value of coastal marshes in site-risk management decisions, we can model and value the protection they provide to Dow and communities from storms by estimating avoided property damage or interruption of operations. These data — in dollar values — can be included in decisions about the design of (or need for) levees and other grey infrastructure. Additional benefits from those marshes (e.g., supporting fisheries and recreation) might also be assessed in dollars. But for other benefits and the ecological value of the marshes, dollar valuation isn’t possible. So we are learning how we can most effectively inform managers about these additional benefits.
Our analyses also need to produce results that are useful for corporate decisionmakers. This means that we need to consider the timelines, scale and precision needed for a given type of decision. For example, data that could inform levee design will likely require greater precision than assessment of the additional benefits from marshes that will inform managers. And if a decision needs to be made in three months, but it takes nine months to run the models that give the most precise answer — the additional precision of the longer run doesn’t matter, because the manager won’t be able to wait that long.
Finally, including the value of nature into corporate decisions involves more than just using new types of information. It often requires companies to look beyond the scope of how they traditionally have made decisions. They need to step outside of their factory walls and understand their facility’s place in a landscape. For example, to ensure water continues to come in a pipe, they could consider the role forests and marshes can play in a watershed to maintain flow in the river. We’re working with Dow to help its staff develop that broader understanding of the critical context of nature for their work.
Why This Collaboration?
This collaboration is an unprecedented effort by a corporation to bring the value of nature into its decisions. Other companies have mostly considered ecosystem services individually (e.g., Coca Cola and water); or considered the value of nature at single sites (e.g., Syngenta’s assessment of the value of native bees as pollinators); or have estimated their company’s effects as a whole (e.g., Puma made news last year for committing to report on corporate-wide environmental profits and loss). But we are looking to apply our conservation science and tools to inform Dow’s decisions all the way from the site level to its corporate strategies and sustainability goals.
Precisely because the TNC-Dow collaboration is breaking new ground, the Conservancy is approaching it as a large experiment. It gives us a chance to test our assumptions, learn and report on our results so others can verify, use and build on our work. And we’re already learning a lot about how Dow — a Fortune 50 company — makes a wide variety of its business decisions.
But why are we working with a major chemical company to do this? Consider this: Dow has both a large impact on natural resources worldwide as well as a commitment to corporate sustainability. Dow has had accidents and pollution at its sites, but it also has a track record in improving its sustainability practices.
Beginning in 1995, Dow has set ambitious 10-year sustainability goals, with metrics and reporting of results on progress toward those goals (read more at: sustainability). It was Dow that initiated discussions with the Conservancy about starting this collaboration, because its leaders were interested in expanding how they think about sustainability to include ecosystem services. Through this collaboration, we have the opportunity to influence Dow’s next round of sustainability goals, which can drive even more innovation and new thinking around incorporating the value of nature throughout its business. We won’t be able to prevent every spill, but we are looking to improve the sustainability of Dow’s overall practices.
Dow’s visibility as a Fortune 50 company will help our ability to spread the valuing nature paradigm to other corporations — an explicit goal of the collaboration. Dow’s Foundation is providing 70% of our funding, and that funding stipulates that we develop and share publicly available corporate decision-support methods. We will be reporting on our results and products in science and management peer-reviewed journals. We intend to be as open as possible about our work on this collaboration.
The Role of Science in the Collaboration
The bulk of the TNC-Dow collaboration’s initial work is focused on ecological and economic analyses at three pilot sites where both Dow and the Conservancy work. At these sites, we are tackling how the value of nature impacts tangible business challenges and decisions, ranging from the role of green infrastructure in site-risk management to the sourcing of materials for production. We are able to learn from Dow staff about how they work and then develop and test methods to bring the value of nature into their decision-making. While we’re addressing site-specific concerns, we are also viewing these projects as opportunities to develop generalized decision-support methods that can be applied at other Dow sites and by other companies.
Last year, we began work at the first pilot site in Freeport, TX. This site has Dow’s largest plant in the world, generating 20% of the corporation’s global production, and is located near the mouth of the Brazos River, along the Gulf of Mexico. We are investigating three analyses (see links to corresponding articles below):
We are assessing the role that ecosystems can play in maintaining water supply to Dow, other water users and ecosystems in a river basin that has been in severe drought during the past year, and is projected to see more dry years in the future due to changes in water supply (climate change) and demand (urbanization).
We are analyzing the economic value of storm protection that coastal marshes provide to Dow and nearby communities, as well analyzing additional benefits from those marshes — such as recreation and fisheries — not provided by engineered concrete protection.
In a region where air pollution affects both human health and how companies can operate, we are investigating the role that large-scale reforestation could play in corporate air-quality compliance decisions — and how such reforestation might provide incentives for funding forest restoration.
We expect results from our Freeport analyses to be available later this year.
We are currently scoping out a second pilot site in Brazil, where we will be looking at agricultural supply chains. We will identify the third pilot by the end of 2012. At each of these pilots, we will build on previous pilot work as well as address new types of business decisions.
We’ve found that there are often existing methods and models that we are able to use or adapt at the pilot sites, such as models of freshwater flow. Many of the advances we are making are in the application of these methods or models in a corporate context and in the economic valuation of the benefits from ecosystems. Through these new applications, we are also advancing and improving our conservation tools.
This collaboration is an exciting opportunity for TNC, and leading the science work on the project has been a rewarding experience for me personally. I began my career as an environmental engineer cleaning up toxic sites, and decided to move into conservation to work at larger scales on preventing damage to the environment. Now with this project, my career has made an interesting arc, as we are working with a chemical company to change how they do business to help them be part of the conservation solution. We are drawing on Conservancy expertise to bring strong science to this project — from my team, Sustainability Science, leading ecosystem service analyses with partners in the Conservancy’s Development by Design team, field programs, and global Conservancy teams like Climate Change as well as the Natural Capital Project. And we are working closely with counterparts at Dow.
As we come together as two organizations, some of our largest challenges have been cultural. We speak different languages and have different perspectives. But in working toward the shared goals of the collaboration, we are learning from each other and finding joint solutions by drawing on the strengths of both organizations.
And if we are successful in showing Dow and other companies that it makes business sense to invest in nature, I see the potential for such collaborations to achieve significant conservation outcomes that the Conservancy wouldn’t be able to achieve on its own.

By Jennifer Molnar, manager, Sustainability Science Team, The Nature Conservancy

Image: The Gulf of Mexico from Freeport, TX. Image credit: Jennifer Molnar/TNC.

Access more information about the collaboration — and get a copy of the first annual report at

Editor’s note: Next month’s Chronicles will be devoted to essays from authors both from within and outside of the Conservancy on the issues and opportunities faced by conservation organizations when working with corporations.