.
Fresh, clean drinking water, a necessity for life

Ecosystem Services

Mankind benefits from a multitude of resources and processes that are supplied by natural ecosystems. Collectively, these benefits are known as ecosystem services and include products like clean drinking water and processes such as the decomposition of wastes.

 

In 2004, these services were specified by the United Nations Millennium Ecosystem Assessment, a four-year study involving more than 1,300 scientists worldwide. The study grouped ecosystem services into four broad categories:

 

provisioning, such as the production of food and water
regulating, such as the control of climate and disease
supporting, such as nutrient cycles and crop pollination
cultural, such as spiritual and recreational benefits

As human populations grow, so do the resource demands imposed on ecosystems and the impacts of our human activities. For the most part, we have lived our lives, produced and consumed our food, manufactured and used our products, and disposed of our waste as if these ecosystem services are free, invulnerable and infinitely available. However, the impacts of human use and abuse are becoming evermore apparent – air and water quality are increasingly compromised, oceans are being over-fished, pests and diseases are extending beyond their historical boundaries, deforestation is eliminating flood control around human settlements. Consequently, society is coming to realize that ecosystem services are not only threatened and limited, but that the pressure to evaluate trade-offs between immediate and long-term human needs is urgent.

Ecosystem services degradation can pose a number of risks to corporate performance as well as provide business opportunities through ecosystem restoration and enhancement. Risks and opportunities include:


Operational
Risks such as higher costs for freshwater due to scarcity or lower output for hydroelectric facilities due to siltation
Opportunities such as increasing water-use efficiency or building an on-site wetland to circumvent the need for new water treatment infrastructure


Regulatory and legal
Risks such as new fines, government regulations, or lawsuits from local communities that lose ecosystem services due to corporate activities
Opportunities such as engaging governments to develop policies and incentives to protect or restore ecosystems that provide services a company needs


Reputational
Risks such as retail companies being targeted by nongovernmental organization campaigns for purchasing wood or paper from sensitive forests
Opportunities such as implementing and communicating sustainable purchasing, operating, or investment practices in order to differentiate corporate brands


Market and product
Risks such as customers switching to other suppliers that offer products with lower ecosystem impacts or governments implementing new sustainable procurement policies
Opportunities such as launching new products and services that reduce customer impacts on ecosystems or participating in emerging markets for carbon sequestration and watershed protection other products


Financing
Risks such as banks implementing more rigorous lending requirements for corporate loans
Opportunities such as banks offering more favorable loan terms or investors taking positions in companies supplying products and services that improve resource use efficiency or restore degraded ecosystems

 

Download the Millennium Assessment Reports

Ecosystems and human well-being: Synthesis  Ecosystems and human well-being: Opportunities and challenges for business and industry