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Benefit Accounting of Nature-Based Solutions for WatershedsBenefit Accounting of Nature-Based Solutions for Watersheds
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Benefit Accounting of Nature-Based Solutions for Watersheds

Background

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.

Our Vision

This initiative aims to develop a standardized method to account for the stacked water and carbon benefits, and identify wider co-benefits of NBS for watersheds. This initiative will demonstrate how evaluating 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.

Scope of Activity

This multi-phased project has a number of key activities, comprising the development of relevant documents, method development, stakeholder engagement and communication, pilot testing and dissemination. Key outputs include:

Landscape assessment

The landscape assessment was undertaken during phase 1 to inform the path forward for 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.
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Publicly available guide

This project will produce a guide including steps, indicators, and methods to account for the multiple stacked benefits of NBS for watersheds, as well as identifying wider co-benefits.

This guide will introduce NBS as a concept, identify the benefits, opportunities, barriers and trade-offs, and discuss the current landscape of corporate investments in NBS. A project overview will discuss the vision and scope and interlinkages with complementary initiatives for the private sector. An overview of the types of NBS for watershed projects across different habitats, interventions and activities will be provided, including case study examples. NBS principles, parameters and best practice examples will be provided as well as other important aspects to be considered. A method will be developed for identifying and accounting for the benefits and co-benefits of NBS in detail (see next paragraph), and this will be piloted across a number of existing case studies.

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 will be an online tool, which will adopt the method developed and can be used across multiple habitats and interventions.

Users of this tool will be able to select multiple options for inputting data (such a habitat type, interventions, activities etc.) to receive associated process and benefit outcomes. Notably, benefits can be identified and accounted for by category (e.g. water, carbon, biodiversity etc.) or by sector (e.g. environmental, social or economic) based on the needs of user.

The dynamic tool will be highly intuitive and user friendly, and will also inform the user of additional tools, methods and approaches to further quantify the benefits identified. The tool will be updated in later stages to consider further quantification.

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 guide, method and tool. Further financial support is also welcome.

Timeline

This initiative has three phases starting in Q1 of 2020 and ending in early 2021.

  • Phase 1: Develop a landscape assessment using stakeholder interviews and desktop research to evaluate existing tools, resources, and case studies that evaluate, measure, and demonstrate the value of NBS benefits.
  • Phase 2: Develop a draft guide and method building on existing tools and resources while considering spatial and temporal parameters, and adaptive governance paradigms to ensure the sustainability of NBS.
  • Phase 3: Collect feedback from stakeholders in order to refine the guide and method. The goal beyond Phase 3 is to test the method, explore valuing NBS benefits across different geographic contexts, and develop an associated tool for NBS implementers.

The Team

This initiative is being developed by a multi-stakeholder project team including the CEO Water Mandate, Pacific Institute, The Nature Conservancy, Danone, and LimnoTech. An expert advisory group will provide insights into the development and refinement of the method as well as strategic direction of the initiative. The expert advisory group comprises stakeholders with expertise in NBS from the public and private sectors, NGOs, academia, and civil society.

Funding support

Grant funding has 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.

Get Involved

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.

Gregg Brill

Pacific Institute
Project Lead

Contact

CEO Water Mandate

UN Global Compact | Pacific Institute

ceowatermandate@unglobalcompact.org

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