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Progress in the Dow - Nature Conservancy Collaboration

Improving Outcomes for Nature and Business

The Collaboration reached the midpoint of its six-year term at the end of December. In preparation for that milestone, in September, the Collaboration leadership met at the Chippewa Nature Center in Midland, MI, where the collaboration concept was originally launched.

The team identified two major areas of emphasis for the remaining term of the Collaboration. First, the team agreed that working together to apply the findings from our analyses to help shape the development of Dow’s next generation sustainability approach, a set of company-wide sustainability goals targeted for release in 2015, should be a top priority. This will be the third set of goals that Dow has released since 1995. A second high-priority area of emphasis relates to the integration of outcomes into corporate decision-making. As the Collaboration moves into the second half, the team will be seeking to develop tools and influence industry and other interested parties based on the lessons learned from the first two pilots.

Roy Family Award

One of the highlights of the year for the Collaboration was being honored as the recipient of the 2013 Roy Family Award for Environmental Partnership, presented by the Harvard Kennedy School. The award is presented every two years to celebrate an outstanding public-private partnership project that enhances environmental quality through novel and creative approaches. The Collaboration was selected from a group of highly qualified projects nominated from around the world that tackle tough environmental problems ranging from sustainable mining in developing countries to reducing the pollution associated with textile manufacturing. Experts around the world reviewed the nominees with the following criteria: innovation, effectiveness, significance, and transferability.

Pilot Site #1 – Freeport, Texas

Based on the results of the pilots in Freeport, TX, four papers, which are currently in review, have been developed for submission to peer-review journals.

  • Air Quality. The most promising results are found in the air analysis, which, if it can be included in the Texas State Implementation Plan (SIP), could provide Dow and other companies based in Texas the ability to consider large-scale reforestation as a method to help reduce components that form ozone. The SIP is a plan for each state, which identifies how that state will attain and/or maintain the primary and secondary National Ambient Air Quality Standards set forth in the Clean Air Act. There is also the potential that this concept could be applied more broadly across the U.S. if the EPA approves it.
  • Freshwater. The freshwater analysis offered new learnings related to the impact of climate change on the future expected frequency and duration of drought periods in the Brazos River Basin. The results highlighted the value of Dow’s water rights as a natural capital asset and provided a value range that could be used for price forecasting.
  • Coastal Analysis. The coastal analysis team developed a method that can be used to assess the role of habitats in coastal risk mitigation and is now highlighting opportunities to apply this method in places with more extensive coastal habitats. The Conservancy is working with catastrophe modeling firms to incorporate habitat in industry standard models while also seeking pilot sites in North America to build the empirical evidence base for the role of habitats in coastal resilience.

Dow-Mitsui in Brazil

Pilot Site #2 – Santa Vitória, Brazil

The second pilot site — at the Dow-Mitsui joint venture, Santa Vitória Açúcar e Álcool (SVAA) Santa Vitória, Brazil — is located in the Ituiutaba micro-region, on the border between two critically endangered biomes — the Cerrado and the Atlantic Forest — and is close to the São Simão hydropower plant reservoir on the Paranaíba River (Figure 1). This region sits in the heart of Brazil’s agricultural region, where about 15% of natural vegetation remains, which is highly fragmented and poorly protected.

SVAA plans to cultivate sugarcane fields for the production of ethanol. SVAA has committed to adhering to Brazil’s Forest Code, which includes designation of permanent preservation areas (PPAs) including riparian areas, reforestation of approximately 20 percent of properties as legal reserves, and replanting of 10 trees to every 1 tree removed.

The location of the new sugar cane fields and legally required restored natural areas can influence the functioning of ecosystems and the value of the services they provide to SVAA and to local communities – including erosion control and water purification. The Collaboration’s pilot provides a framework to inform how SVAA can meet its sugar cane production needs most efficiently, while strategically locating required forest restoration on land that optimizes the benefits from biodiversity and ecosystem services.

The pilot analysis includes the modeling of sugarcane expansion, biophysical constraints and production costs. To ensure that our models are realistic and can be implemented, the legal context in Brazil is considered, and the Forest Code regulations are incorporated in the modeling framework. The team is applying biological models to identify opportunities to reduce habitat fragmentation and promote connectivity in order to conserve biodiversity. Additionally, the analysis includes quantifying the value of natural areas for other ecosystem services: improved water quality via retention of sediment, nutrient regulation for drinking water, and carbon sequestration.

Planning at a landscape scale instead of at each farm parcel individually is likely to lead to better environmental outcomes as well as a reduction in production costs. It is also likely that environmental compliance costs can be reduced, with greater flexibility to protect existing habitat remnants in areas least profitable for agriculture.

Pilot Site #3 - TBD  

The Collaboration is excited about the opportunities to expand its work. During our two previous pilot analyses, however, the Collaboration team felt it prudent to select a third site based on the learnings from the first two locations, the data obtained from the early results of the ESII tool, and the manner in which the value of nature will be included in Dow’s next generation sustainability goals. The identification of the third pilot is planned for later in 2014.

Tool Development
. The Collaboration entered a new phase in 2013 as the team began the development of a tool, which provides a rapid assessment of ecosystem services at a site level. This tool has been named the Ecosystem Services Identification & Inventory (ESII) Tool, and it will allow businesses to estimate the business value from nature from lands on and adjacent to their sites, as well as the public value from lands on-site.

The vision for the ESII tool is to develop software for a tablet device that a site technician can use to collect relatively simple ecological data, which can be used to identify and model the rather complex production of ecosystem services at a site. By providing this ecosystem service production data, the tool would enable engineers to estimate the value of those ecosystem services to the business using replacement cost calculations.

The Collaboration encourages other companies to incorporate the value of nature into business decision making, a significant component of achieving the Collaboration’s goal of taking our strategies to scale. Collaboration results have been presented in numerous venues to a variety of audiences.

Page Last Modified: April 2014

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