There is much debate about the measurements used to determine a firm's ecological impacts.
Some organizations focus on the measurement of their carbon footprint and how to offset it.For example, a manager who needs to fly three employees from Canada to New Zealand for a business trip could minimize their environmental impact by buying carbon offsetting.
By simply visiting a carbon offset website and indicating the number of people travelling, including their destination and travel mode, the managers would receive the trip's associated CO2 discharge and its corresponding cost. They could then choose whether or not to pay the company to offset their employees' carbon footprint.
However, a quick survey of three of the many carbon offsetting websites reveals three very different CO2 discharge totals and costs (e.g., 4 tons of CO2 with a US$56 USD fee, 9.9 tonnes and a 177 GBP fee and 21.2 tons with a US$538 USD fee).
Why are these estimates so different? What important questions were omitted from the calculations, enabling such discrepancies? And why should companies consider the carbon footprint over the ecological footprint, the life cycle assessment, the eco-cost/value model or the ecosystem service value? The simple answer to all these questions is that there are no worldwide standards for measuring a firm's ecological impacts.
The underlying goal of each method is similar: to educate people about carrying capacity and over-consumption, with the aim of altering behaviour. However, differences between the methods abound, including how they account for fossil fuels, biodiversity, exports, imports, nuclear power, and sea areas.
The Network for Business Sustainability is funding a project to systematically review the academic literature on firms' ecological impacts, with the goal of identifying meaningful, consistent measures with which firms can determine their true ecological impacts. To the extent that the information is available, an effort will also be made to describe the different ways firm value those impacts.
The NBS team sat down with ecological economist Pamela Kaval, PhD, who is lead author of the 'Measuring Ecological Impacts' systematic review.
NBS: First - what is an 'ecological economist'?
Kaval: An ecological economist is someone who, for example, would determine the value of a piece of land an organization is planning to deforest and pave. The ecological economist would calculate the value of the ecosystem services that would cease to exist, such as the amount of oxygen the trees on the land are capable of producing, as well as the carbon dioxide they're capable of removing from the air. He or she would also assess the significance of the land's watershed and the role it plays in preventing flooding and supporting animal and plant species in the area. There are numerous assessments an ecological economist can make on a given ecosystem. Once this is complete, then he or she would compare their results to the economic value associated with paving the land.
NBS: So, how does an ecological economist put a price on a lake? Or a tree? Or a species of bird?
Kaval: There are several ways this can be done. One way is to ask people what they'd be willing to pay for it. For example, you could conduct a survey of people who visit a particular park to determine whether they visit the area because of its flora and fauna. You could then ask them if they would be willing to pay a US$5 entrance fee if it went towards the protection of a specific species that lived there, such as a wood stork or brown bear. But people who don't visit the land might also have a value for these endangered species; this could be considered an existence value, as they value the species just because it exists. So it also would be important to survey non-users.
NBS: You're clearly capable of assessing ecological impacts and comparing them against economic value. What has been your experience so far with the Network's systematic review process?
Kaval: Well, I've done a lot of literature reviews and meta-analyses of research before, but this project is different because of the extensive involvement with the business leaders. I really enjoy getting feedback with the different professionals on the oversight committee as it is helping me ensure my work is useful to them. The systematic review process has provided me with a viewpoint outside the academic and government communities, enabling me to change direction when it's important.
NBS: How have the business leaders on the oversight committee changed your direction?
Kaval: I was initially going to focus my energy on the different methodologies firms use for their sustainability reports and how firms are applying those methodologies. But the practitioners on the oversight committee said that they knew about the methodologies and wanted more information about how they can apply this knowledge in their own organizations.
Before becoming a consultant in the United States, Pamela Kaval was an associate professor at the Waikato Management School at New Zealand's Waikato University. In addition to the systematic review she is conducting for the Network for Business Sustainability, she is also conducting an Ecosystem Service valuation of the Colorado River Watershed for the Nature Conservancy, writing standards guidelines for forest valuation as a member of the Cost E45 European Forest Valuation Action Management Committee, valuing biodiversity and native birds in New Zealand and writing a chapter in the upcoming book 'Ecosystem Services in Engineered Systems.'