New Metrics
New Study Illustrates Higher Natural Capital Value of Agrofrestry vs. Monoculture

Global natural capital consulting firm Trucost has released the results of a study comparing the environmental value of monoculture and agroforestry for producing palm oil and soybeans.

Based on pilot studies carried out by Brazilian cosmetics company Natura and agricultural biotech giant Monsanto — which found that the environmental and economic value of agroforestry was higher than that of monoculture — the report recommends that companies should understand and incorporate the economic value of biodiversity, ecosystems services and their environmental impacts into their decision-making processes, in order to pursue more sustainable ways of doing business and to design polices to achieve sustainable development.

The study is part of Conservation International's TEEB for Business Brazil project, a multi-year study of ecosystems, sponsored by Vale, Monsanto, Natura and Santander, and supported by the United Nations Environment Programme World Conservation Monitoring Center (UNEP–WCMC) and the National Confederation of Industry Brazil (CNI).

Luciana Villa Nova, sustainability manager at Natura said: "We believe that a detailed consideration of the dependence on ecosystem services is fundamental to the business sector and society as a whole. We see TEEB as an opportunity to foster discussion about a new economy that is greener, more inclusive and more accountable."

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The balance between the costs of environmental impacts and benefits of the different agricultural practices were measured in monetary terms:

  • In Natura's pilot, the total environmental value of agrofrestry (R$410,853), where palm oil cultivation was integrated with trees and crops such as banana and cacao, was three times as high as that of palm oil monoculture (R$122,253 per hectare). The study also showed that agrofrestry contributed to a diversification of farmer income and minimized the risks of pests and diseases in cultivation.
  • Results were similar in the case of Monsanto's soybean cultivation: The environmental value associated with one hectare of soybean production (R$1,031 per hectare) was 11 percent higher than one hectare covered with a mix of 80 percent soybean and 20 percent indigenous Cerrado forest (R$1,139 per hectare).

"By exposing the monetary value of nature, previously treated as invisible in issues of natural resource conservation, TEEB demonstrates that the preservation and sustainable use of natural capital are essential actions for achieving sustainable economic development and ensuring the social welfare of current and future generations," said Helen Pavese, project coordinator of the TEEB for Business Brazil project.

The relevance of natural capital to business is increasingly being pushed to the forefront as the linkages are better understood.

“Factoring natural capital into business decision-making not only helps companies to make the right decisions when optimizing production, it also builds resilience into business models by identifying risks and opportunities not visible in traditional business accounting," said Neil McIndoe, Head of Environmental Finance at Trucost.

The full report is available here.

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