The unsustainable development of human societies and economies is degrading ecosystems and watershed processes and functions, reducing nature’s capacity to retain and filter water, sequester carbon, support biodiversity, promote social health and well-being, economic development and sustain agricultural productivity.
Nature-based solutions (NBS) provide a mechanism to adapt to climate and human-induced impacts while also reducing the severity of climate change through carbon uptake and storage and can be used to manage floods, droughts, and extreme weather events. NBS can also restore watershed and ecosystem health, and provide a wide range of co-benefits. Additionally, NBS (including green infrastructure) can be more flexible and resilient than conventional engineered solutions (gray infrastructure).
Implementation of NBS remains limited due to several challenges:
- Lack of awareness about the potential benefits of NBS, from an ecosystem perspective and from a business perspective;
- Lack of resources including under-investment by both the private and public sector and time and land constraints;
- Weak project pipelines whereby projects are developed and implemented over too short a period (NBS are generally long-term projects) or where there is a lack of “bankable projects” (i.e. has sufficient collateral, future cash flow, and high probability of success, to be acceptable to institutional lenders for financing);
- Lack of policy and governance frameworks to incentivize investments in NBS; and
- Path dependency of organizational decision making
Despite the challenges, there has been an increase in private sector investment in NBS, where companies are making commitments to protect nature (such as deforestation-free supply chains) or integrating NBS into long-term sustainability plans. Companies are an important stakeholder for identifying financing for NBS or analyzing and advocating for more policies that facilitate investments in NBS due to their proclivity for innovation and their foresight in addressing business risks. This project complements all these efforts by identifying the range of benefits of NBS and developing a standardized accounting methodology.
This initiative is developing a standardized method and guidance to identify, account for, and value the stacked water, carbon, biodiversity, and socio-economic benefits of NBS for watersheds. This initiative demonstrates how accounting for stacked benefits quantitatively and qualitatively can build the business case and show the investment potential of NBS for watersheds, as well as build awareness of their value.
This multi-phased project has several key activities, comprising the development of relevant documents, method development, tool development, communication, stakeholder engagement and capacity building, pilot testing, and dissemination. Key outputs include:
Stage 1 (Jan 2020 – June 2021)
Landscape assessment
The landscape assessment informs the project’s aim of engaging the private sector to invest in NBS. A literature review was undertaken to understand the contemporary thinking around NBS and identify key opportunities and challenges faced by decision makers, practitioners and researchers. Interviews conducted with businesses, civil society, and academia who have already implemented NBS project or are looking to do so yielded qualitative responses to complement or contrast the findings from the literature review. A review of NBS case studies from the private sector was also conducted.
The landscape assessment aims to:
- Explore the concept, definitions and classifications of NBS;
- Identify barriers to scaling NBS;
- Review available frameworks or methods for evaluating, measuring, and demonstrating the value of NBS benefits; and
- Examine opportunities to scale NBS.
Publicly available guide
This guide provides a starting point to identify and measure the multiple benefits accruing from NBS investments. The guide indicates which specific NBS activities can be implemented in various habitats and suggests methods for measuring the benefits.
Accounting for NBS benefits will improve a company’s impact monitoring and help build the business case for these “green” solutions, thereby supporting widespread implementation. Specifically, the guide helps users account for and measure the stacked water, carbon and biodiversity benefits, as well as additional socio-economic benefits. The aim of this work is to increase the overall awareness of the value of NBS and increase investments in NBS, not only for ecosystem health and community development, but also for businesses directly.
Standardized method
This project aims to develop a method to account for the stacked water and carbon benefits and identify wider co-benefits of NBS for watersheds by mapping the natural and man-made processes from NBS. This method is designed to align with existing tools and resources for NBS benefit accounting and incorporate lessons learned from NBS case studies globally.
By promoting the quantification of stacked benefits of NBS, this method can help to:
- Demonstrate the business case for NBS projects;
- Demonstrate the effectiveness of NBS to deliver multiple benefits;
- Evaluate the investment potential considering the interface with existing carbon and related markets;
- Broaden support for NBS policies, programs and projects;
- Identify opportunities and trade-offs among different NBS project beneficiaries; and
- Increase transparency associated with decision-making, through a clear and standardized method.
User-friendly tool
The final product from this project is an online tool, the NBS Benefits Explorer, which adopted the method developed for benefit identification. This highly intuitive and user-friendly tool offers practitioners a simple way to identify benefits from NBS investments across multiple habitats anywhere in the world, as well as offers appropriate indicators and calculation methods to quantify and qualify benefits. The tool can be found at www.NBSBenefitsExplorer.net
The dynamic tool is highly intuitive and user friendly and informs the user of indicators and calculation methods to further quantify the benefits identified. The tool will be updated in later stages to incorporate additional components around benefit forecasting and valuation.
The tool will be updated in Stage 2 to consider further benefit identification, accounting, and valuation approaches.
Stage 2 (July 2021 – December 2022)
Benefit Forecasting
Benefit Identification is the first step along the NBS journey and informs investors of the multiple benefits accrued from NBS. Benefit Forecasting builds on this and aims to report on how different benefits accrue proportionately over time and across spatial scales. For example, biodiversity benefits from mangrove restoration would increase over time, yielding maximum benefits after a certain period (e.g., 10 years after a mangrove has been planted or restored). The larger the mangrove, the greater the potential for increased biodiversity benefits across larger areas. This work will use modelling and calculations based on habitat-specific scientific evidence and expert knowledge.
Benefit Valuation
One of the key challenges limiting further investment in NBS is the lack of Benefit Valuation. Understanding the potential return on investment for NBS over time is a critical need for decision making. During stage 2, the project will develop a Benefit Valuation method, using economic and social metrics, to measure, model and report on the value accrued from an investment in NBS. Global databases of social and economic estimates will be used to perform meta-analyses and assess how individuals value NBS benefits. This will show the economic and social benefits to the environment, as well as report on economic returns to those making the investments – both of which support the case for NBS investment.
Stakeholder engagement and development of guidelines
One of the key findings from Stage 1 was the lack of stakeholder engagement in existing NBS projects. Results from the pilot testing showed that stakeholders are often only engaged at specific points along the project (mostly at the end of the project). There is often a lack of diversity in stakeholders consulted, with a particular lack of inclusion of vulnerable, disadvantaged, or marginalized communities. Stage 2 of this project will investigate the development of a set of NBS-specific guidelines which address stakeholder engagement. Issues of justice, equity, inclusion, and diversity would be covered to ensure that all voices are heard around the NBS decision-making table.
Expanded method identification and benefit accounting
Further time would be spent expanding and elaborating on the set of indicators and calculation methods already provided. Additional considerations would improve the benefit accounting element of the project and allow practitioners to better estimate and measure the benefits from NBS investments. This would include methods and indicators for the socio-economic benefits accrued from NBS projects.
Further development and refinement of the guide and tool
The project team will incorporate all the elements developed in Stage 2 into the guide and tool. This would include benefit forecasting methods, revised indicators and calculation methods for benefit accounting, benefit valuation techniques and stakeholder engagement considerations. The tool would also present trade-offs which could accrue from certain activities. A key addition would be inclusion of an expert-input interface which would allow for greater rigour and verification of interlinkages between activities, processes and benefits/trade-offs across the different habitat and intervention types.
Capacity building and socialization
Sharing the outcomes and outputs of this project with a variety of stakeholders would help achieve communications, stakeholder engagement and capacity building objectives. We aim to hold several events which will showcase the tools functionality and help build the business case for NBS.
Audiences
The primary audience of the guide, method and tool is expected to be private sector decision makers (e.g. corporate sustainability practitioners, water stewardship teams, financial officers) involved in the implementation and evaluation of NBS interventions. Specifically, the guide, method and tool will be most useful for companies interested in responding proactively to shared sustainability challenges, as well as companies that are implementing or considering investing in NBS and would like to estimate and demonstrate the potential benefits of NBS interventions.
The secondary audience includes public sector actors, NGOs, investment organizations, development banks, academia, civil society groups and local communities involved in supporting and/or developing effective policies, programs and projects to incentivize greater implementation of and investment in NBS.
Stakeholder Engagement and Communications
Stakeholder engagement and effective communications are critical to the success of this project. A stakeholder and communication plan has been developed to secure the support of various stakeholders throughout the various phases of a project. The aim of stakeholder engagement for this project is to receive expert feedback on the guide, method and tool, to ensure that these are accurate, practical, and credible. The stakeholder engagement and communications plan will allow the project team to collaborate with other stakeholders to create greater impact, and/or influence decision making.
A key group of stakeholders will form an expert advisory group, which will provide strategic and technical input into the direction of the project and review the guide, method and tool developed by the project team. The expert advisory group will comprise of stakeholders with expertise and interests in NBS, including companies, investors, banks, NGOs, government, and academia. The expert advisory group, in conjunction with specialists, academics, piloting companies and practitioners, will inform the outcome of the project and help ensure that the final project output is credible and beneficial for accounting for the benefits of NBS.
Other stakeholders wishing to support this project are invited to contribute case studies, documents or information that will inform the development of the current and future stages of this initiative. Further financial support is also welcome.
The primary audience of the guide, method and tool is expected to be private sector decision makers (e.g. corporate sustainability practitioners, water stewardship teams, financial officers) involved in the implementation and evaluation of NBS interventions. Specifically, the guide, method and tool will be most useful for companies interested in responding proactively to shared sustainability challenges, as well as companies that are implementing or considering investing in NBS and would like to estimate and demonstrate the potential benefits of NBS interventions.
The secondary audience includes public sector actors, NGOs, investment organizations, development banks, academia, civil society groups and local communities involved in supporting and/or developing effective policies, programs and projects to incentivize greater implementation of and investment in NBS.
Stakeholder engagement and effective communications are critical to the success of this project. A stakeholder and communication plan has been developed to secure the support of various stakeholders throughout the various phases of a project. The aim of stakeholder engagement for this project is to receive expert feedback on the guide, method and tool, to ensure that these are accurate, practical, and credible. The stakeholder engagement and communications plan will allow the project team to collaborate with other stakeholders to create greater impact, and/or influence decision making.
A key group of stakeholders will form an expert advisory group, which will provide strategic and technical input into the direction of the project and review the guide, method and tool developed by the project team. The expert advisory group will comprise of stakeholders with expertise and interests in NBS, including companies, investors, banks, NGOs, government, and academia. The expert advisory group, in conjunction with specialists, academics, piloting companies and practitioners, will inform the outcome of the project and help ensure that the final project output is credible and beneficial for accounting for the benefits of NBS.
Other stakeholders wishing to support this project are invited to contribute case studies, documents or information that will inform the development of the guide, method and tool. Further financial support is also welcome.
Nature Based Solutions Webinar Series 1: How to Identify and Account for the Benefits of Nature-Based Solutions for Watersheds
Nature-Based Solutions Webinar Series 2: From Theory to Practice
Nature Based Solutions Webinar Series 3: Benefits Explorer Tool
Tools of the trade: Benefit accounting of nature-based solutions
The Natural Benefits of Including Nature in Water Business Strategy – Uniting Business Live 2021
This initiative is being developed by a multi-stakeholder project team including the CEO Water Mandate, Pacific Institute, The Nature Conservancy, Danone, and LimnoTech. Expert advisory groups will provide insights into the development and refinement of the work as well as strategic direction of the project.
Grant funding for Stage 1 was been generously provided by the Swedish International Development Cooperation Agency. Additional funding support for this initiative comes from the CEO Water Mandate endorsing companies with the lead sponsors being Asian Pulp and Paper, Danone, and Microsoft.
If you’d like to discuss how you and your organization can get involved with this NBS initiative or to hear more about project-related reports, upcoming events, or how to sign up to be a case study, fill out the form below.