The New Economy has begun. One year into a world where global leaders have agreed to act on 17 concrete Sustainable Development Goals, and where the full force of law is now behind the international agreement on climate change, we are speeding toward a bright future for business that creates value for people, the planet, and the economy.
But as the old adage says, we can’t manage what we can’t measure. We need new models for metrics that allow business to quantify sustainability value — in real financial terms — to integrate people and the environment into core business decisions.
This week, I will be speaking at Sustainable Brands’ New Metrics '16 conference, which is gathering a diverse group of leading thinkers — from brand strategists to financial analysts, supply chain managers to IT executives — to share ideas and case studies for smarter, more accurate, and more inclusive business metrics that create value for all stakeholders.
Restore the Earth Foundation's
The Economic Value
at New Metrics '16.At New Metrics, I will be speaking about Restore the Earth’s innovative EcoMetrics™ Model, which allows companies to validate their offsets for carbon dioxide, water, nitrogen, and phosphorus based on the value generated from our landscape-scale restoration projects. Over the past 50 years, 60 percent of the Earth’s ecosystems have been damaged or destroyed. Our projects — including our signature initiative to restore one million acres in the lower Mississippi River Basin (“North America’s Amazon”) — generate significant benefits by rebuilding ecological health and integrity at the ecosystem level. These benefits include mitigating climate change, recharging groundwater, providing critical habitat, buffering against sea level rise and supporting flood control, and preventing storm damage.
But how do we measure and report on these benefits in a way that encourages business investment?
At Restore the Earth, we use our EcoMetrics™ Model, which proves that every $1 invested in landscape-scale restoration generates more than $9 in environmental, social, and economic value. In the collaborative spirit of Sustainable Brands, I’m sharing our model here.
Here’s how it works.
We start by taking stock of the holistic economic, environmental, and social benefits of landscape-scale restoration. These vary depending on the project, but they usually include the following categories:
- Financial: Financial capital is created by multiple offset credits, and revenue from sustainable timber harvests, hunting licenses, and the sale of restored land to conservation organizations.
- Social and relationship: In restored environments, recreational activities such as hunting, fishing, and wildlife-viewing all create social and relationship capital.
- Manufactured: Natural storm protection and waste-treatment systems create valuable manufactured capital in the form of green infrastructure.
- Human: Jobs created directly by the restoration program and indirectly in the restored environment create long-term human capital.
- Natural: Vast natural capital is created from clean air to clean water, stable productive soils, enhanced biodiversity, and greenhouse gas and nutrient retention.
- Intellectual: Restoring landscapes creates and expands knowledge, competencies, and capabilities, and it maintains experiences that build valuable intellectual capital.
We measure the value created by collecting data using field measurements and monitoring related to each category above. All information is collected under the guidelines of the International Integrated Reporting Council (IIRC)’s Integrated Reporting Framework and is vetted through the Social Value International (SVI) Assurances Standards, allowing us to translate the data into financial indicators of each category for each project site.
For each business investor, Restore the Earth provides a formal report — in a format ready for third-party audit — that accounts for and communicates the full monetary value of their natural capital investments in terms of financial, social, and environmental benefits in a transparent and verifiable way. This allows funders to take credit for greenhouse gas offsets, water-quality offsets, and other environmental benefits produced, in perpetuity. And because our model aligns with international standards, it’s easy for companies and stakeholders to compare performance.
Our ability to measure and report on these benefits has attracted a diverse group of businesses — including Shell, Entergy, CITGO, VMware, Veolia, Latham & Watkins, Eileen Fisher, and others — to support and invest in our landscape-scale restoration projects.
The advent of our New Economy is an exciting development, but we need new metrics to set, reach, and outperform our goals in sustainable business. I’m excited to share Restore the Earth’s approach at New Metrics ‘16 and to hear how others are reinventing metrics to support and enhance sustainable business.