Pressure on green spaces forces businesses to innovate

Businesses can improve their economic position if they are aware of the value of biodiversity and potential threats to it. This is the conclusion of a study into The Economics of Ecosystems & Biodiversity (TEEB) carried out by KPMG Consultancy at the request of the Ministry of Economic Affairs, Agriculture and Innovation. This study was submitted to the Lower House of Parliament by Henk Bleker, the Minister for Agriculture and Foreign Trade, on 21 June 2012.

Many businesses depend heavily on the benefits of ecosystems, particularly in non-western countries. With the scarcity of raw materials and natural resources, operating costs are increasing. The World Economic Forum has identified the loss of biodiversity and ecosystem services as being one of the greatest business risks.

Innovation

Businesses can lower their operating costs by seeking alternatives. There are opportunities as well: by innovating at an early stage, first mover advantages can be created which places businesses ahead of their competitors. The Ministry of Economic Affairs, Agriculture and Innovation asked KPMG Consultancy to look at the opportunities and threats related to ecosystem services for businesses in the dairy sector, arable farming, horticulture, fisheries, the creative sector, life sciences, water management, the chemical sector and tourism. In each of these sectors various cases were analysed.

Economic opportunities

The study makes clear that there are indeed opportunities. The horticulture sector for instance shows the effectiveness of organic pest control. Fish farms are working on plant-based feed as an alternative to animal feed, which helps to reduce overfishing. The Netherlands is eminently placed to play a role in the market for second-generation bioplastics. They help to reduce dependency on oil without competing with food production. In order to acquire a competitive edge, businesses should analyse the financial impact of ecosystem services and biodiversity for themselves, taking account of risks, business opportunities and higher operational costs. Later this year the Ministry of Economic Affairs, Agriculture and Innovation and KPMG Consultancy will organise master classes which include the development of business cases.

TEEB

The KPMG study is the second in a series of six studies on the Economics of Ecosystems and Biodiversity published by the Netherlands. The studies, commissioned by the Ministry of Economic Affairs, must give an insight into the economic value of ecosystem services and biodiversity for society in terms of costs and benefits. The first study in the series (TEEB, Green, healthy and productive) was published in May of this year and will be followed by four more: on spatial planning, trade chains, Dutch Caribbean and towns and cities.