Natural Value Initiative

Investment return

How your investment holdings respond to ecosystem services changes and the ongoing degradation of natural systems determines whether their investment returns are enhanced or impaired in the medium and long term.  Returns may be impaired as a result of:

• Increasingly restricted access to land:  As the economic value of biodiversity derived services becomes better known and there is competition for those resources from other activities, there will be greater competition for access to land.  This will impact on the economic returns of the FBT sector as raw material prices and compliance costs rise.
• Increasingly informed markets:  Market access is in part dependent upon meeting consumer aspirations, failure to meet demands for sustainably sourced products by major markets or customers can limit growth.  Sales of Marine Stewardship Council (MSC)-labelled products worldwide, for example, grew by 67% from April 2008 to March 2009
• Vulnerability of supply:  As ecosystem systems integrity declines the availability of raw materials such as water, timber and food become costlier and less easy to secure. 

Companies that understand and respond to these issues can gain first mover advantage. 

CASE STUDIES
Security of supply and investment return

• Pollination and agriculture in the USA
• Strawberry growing, water use and protected areas in Spain
• Shrimp farming in Asia
• Payments for watershed services in Colombia (SABMiller)
• Securing continued access to water and timber (BAT)