Sasumua

Climate-smart landscapes make business sense to the private sector

By Elizabeth Kahurani

The private sector is an important actor with great potential to inject financial resources, technology and expertise into climate smart initiatives that target sustainable development.

These private companies are looking into ways and strategies for effective engagement out of realization that their existence depends on finite ecosystem services; and also due to an increase in awareness among consumers who demand environmental accountability in the production process, as well as the need to maintain good company reputation through social responsibility.

This not withstanding, their main drive is to make profit, and as such, rules of engagement with these private entities have to make business sense.Vision for Change demonstration plots in Kragui in Côte d’Ivoire. The project aims to revitalis cocoa using a landscape approach that also target to improve he environment, social aspects and livelihoods. Photo credit: World Agroforestry Centre

In a new book Climate-Smart Landscapes: Multifunctionality in Practice to be released this week on the sidelines of UNFCCC COP 20 in Lima, Peru, three chapters expound on private sector involvement in landscape approaches using case studies that highlight among others the need to i) present business case studies to motivate the private sector, ii) enhance sustainability in agriculture supply chains and iii) use production standards and certification as a means to private sector engagement in integrated landscape management approach.

Presenting a business case will entail a shift from the current focus of analyzing environmental costs exclusively, to developing analytical tools, methodologies and frameworks that account for both the natural capital and the business financial goals. It is a process that involves integrating ecosystem services analysis with frameworks that drive corporate decision making strategies.

Examples of initiatives making strides in this direction include the Natural Capital Coalition guide that recommends ways accountants can frame risks and opportunities in business terms and embed natural capital into corporate decision-making. “There is also the British American Tobacco Biodiversity Partnership that has developed the Biodiversity Risk and Opportunity Assessment (BROA) tool to assess risks and opportunities of depending on biodiversity and ecosystem services at the landscape scale for companies with agricultural supply chains,” says Dr Namirembe.

“However, to remain viable, such holistic analysis of both natural and business capital needs to be accompanied by conducive policy regulations and institutional frameworks,” says Dr Sara Namirembe of the World Agroforestry Centre (ICRAF)

She explains this in the context of Sasumua water shed in Kenya.  “Although a conducive business case exists (about $122,924/year Net Present Value) for Nairobi City Water Company (NWCS) to use payment of ecosystem services with upland farmers to reduce sedimentation of the Sasumua reservoir, it cannot be operationalized because of barriers in existing legal and institutional frameworks. NWCS already pays watershed management fees to the Water Resource Management Authority. Although a section of consumers in Nairobi were willing to pay more in their water bill to finance watershed conservation, the mandate to increase tariffs and is not the NWSC, but with the water services regulatory board.”

Sustainable business agricultural supply chains

A Landscape approach can be useful in promoting sustainability in business supply chains particularly within the agriculture sector. Supply chains refers to all those factors, processes and actors involved from the production, all through to the consumption of goods and services. A landscape approach to such a system would make the businesses involved look beyond their unit area of production and the profits thereof to encompass economic, environmental, social and other livelihood aspects. It would mean balancing the need for high production with reducing negative impacts on the environment; avoiding child labor; and ensuring farmers get higher wages for their produce.

“Business supply chains should seek a landscape approach as it not only assures sustainability but it also helps them mitigate reputational and operational risks,” says Dr Amos Gyau of ICRAF. “By supporting a sustainable ecosystem from the production source, they gain consumer confidence and promote continuous supply of high quality products. Failure to maintain natural capital at source leads to poor quality and eventual depletion of raw materials,” he adds.

Another important benefit of embracing landscape approach in supply chains is that it creates space to form new partnerships and establish collaborations with the public sector and other players in a way that spreads risks and complements efforts.

The Vision for Change (V4C) project financed by Mars Inc. and implemented by ICRAF is one model using landscape approach towards business supply chain sustainability. It aims to revitalize the cocoa sector in Côte d’Ivoire while at the same time addressing environmental concerns by promoting trees on farms; and social aspects by eliminating child labor and making cocoa production more attractive to younger farmers through income diversification.

Dr Gyau and his colleagues recommend tools for implementing a sustainable landscape approach in business supply chains. These include: regional producer support programmes with activities such as risk assessment, information sharing on one or more commodities that require going beyond the farm level. There are also multistakeholder dialogues like the UN Global Compact, which is a strategic policy initiative for businesses that commit to uphold principles on human rights, labour, environment and anti-corruption.  Tools on certification standards can be used to implement both vertical integration through buyer-supplier relationship in which contracted farmers meet certain standards in production and horizontal integration whereby businesses handling similar commodities merge to enjoy economies of scale.

In a related chapter, Gabrielle Kissinger of Lexeme Consulting and his colleagues expound on the use of certification standards to integrated land management and explore methodologies using various case studies. They highlight product certification standards as useful because they require evaluation of a business performance beyond production to its impact on the surrounding environment. But the main challenge is that most systems are designed for assessment within the property boundary.

Read more on these case studies in Part 4 of the book Climate-Smart Landscapes: Multifunctionality in Practice: Involving the Private Sector

PRESA’s work informs Kenya’s policy on water

By Elizabeth Kahurani

PRESA’s work on Payments for Environmental Services (PES) at the Sasumua watershed in Kenya has resulted in the inclusion of PES as an effective water resource management mechanism within key government policy on water.

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