Transforming Risk into Opportunity:

Transcription

1 Vital Wave Consulting Field Teams Latin America Argentina Brazil Chile Costa Rica Dominican Republic Mexico Peru Asia India China Cambodia Uzbekistan Eastern Europe Estonia Ukraine Africa Egypt South Africa Nigeria Kenya Middle East United Arab Emirates United States California (Headquarters) Transforming Risk into Opportunity: Biodiversity & Ecosystem Services and the Tourism Sector February 29, 2012 Christina Heyniger Strategic Accounts & Sustainable Tourism Vital Wave Consulting C. Josh Donlan, PhD Founder and Director Advanced Conservation Strategies

2 Introductions C. Josh Donlan, PhD Founder and Director Advanced Conservation Strategies Christina Heyniger Strategic Accounts & Sustainable Tourism Vital Wave Consulting 1

3 Agenda Overview of Tourism Industry (Christina) Pressures and Risks Facing Tourism Industry (Christina) Biodiversity & Ecosystem Services, Risk, and Investments (Josh) Case Study: Integrating Social Ventures with High-impact Environmental Outcomes (Josh) Summary of Conclusions (Christina) Questions & Answers (Josh, Christina) 2 2

4 Tourism Industry Overview Business International arrivals 4% in 2011 to more than 980 million International travel generated $US 919 billion in export earnings in 2010 Tourism Industry Environmental changes Changing consumer patterns Travel to wilderness areas increasing Travel to emerging markets increasing Environment Environmental resources are critical attractions for tourists Global: Tourism accounts for approximately 5% of global carbon dioxide emissions Local: Visitors can offer a financial incentive to conserve, but also threaten The tourism industry operates at the intersection of business and environment 3

5 Spend Shifters - a sea of change Brand Asset Valuator (BAV) 1million consumers, 20 years, 50 countries, 70 brand metrics Exclusive 60% Sensuous 30% Daring 20% Friendly 148% Socially Responsible 63% Kindness/Empathy 391% 4

6 Changes in Tourism as a Result of Changing Attitudes and Values Changing Values More Experienced Travelers Demand for authenticity Risk for tourism businesses increases as desire for authentic travel experiences increases 5

7 Environmental Investments in the Tourism Sector Spectrum of approaches to coping with uncertainty around environment and trying to stimulate better outcomes. 100% Market 100% Charity Outcome-based Input-based Reward tourism businesses or other stakeholders based on desired environmental or social outcomes. Investments in eco-lodges with a focus on environmental conservation or poverty alleviation are funded by NGOs or aid agencies. They often lacking enough business to make them sustainable. 6 6

8 Risk Mitigation Strategies Biodiversity and Ecosystem Services (BES) address the root cause of the risk businesses face Reputational Philanthropy Regulatory Product Adaptation Operational Types of Risk Facing Tourism Industry Today Risk Mitigation Strategies CSR Legal Liability Systemic Biodiversity and Ecosystem Services 7 7

9 Advanced Conservation Strategies Focused on outcomes and incentives Our foundation is science, yet we work and collaborate outside of science to innovate and implement new solutions and ventures for environmental and sustainability challenges. We leverage science, markets, design, finance, and behavioral economics for organizations trying to solve problems. 8

10 Ecosystem Services are especially relevant in emerging markets Biodiversity & ecosystem services Why should the private sector care? How we invest in biodiversity & ecosystem services An non-tourism example: sustainable fisheries and sea turtles 9

11 Examples of ecosystem services Environmental Services: Clean water Carbon sequestration Disaster protection Climate change adaptation Fish nursery grounds 10

12 Biodiversity and Ecosystem Services is a new field gaining industry credibility with applications for tourism Biodiversity and Ecosystem Services (BES) degradation and loss has gained business attention in recent years. Higher public awareness of BES is leading to changes in consumer preferences and purchasing decisions. Companies are holding an increasing amount of environmental risk 75% Views of CEOs on threat to growth from biodiversity loss 50% 25% 0% North America Western Europe Asia Pacific Latin America Turning risk into opportunities: strategic approach, with a focus on risk evaluation and mitigation. 11

13 Potential Investments For Biodiversity & Ecosystem Services Least Direct Investment Support for extracted bio-products Examples Logging, non-timber, hunting Support for reduced impact use Sustainable agriculture, sustainable fisheries Support for intact use Eco-tourism, sport hunting, wild honey Payment for other environmental services Carbon, watershed protection Payment for use rights Land easements, non-logging concessions Performance-based payments for biodiversity Paying for bird breeding success, paying for occupied wolf dens Most Direct 12

14 Potential Investments For Biodiversity & Ecosystem Services Least Direct Livelihoods Investment Support for extracted bio-products Examples Logging, non-timber, hunting Support for reduced impact use Sustainable agriculture, sustainable fisheries Support for intact use Eco-tourism, sport hunting, wild honey Payment for other environmental services Carbon, watershed protection Payment for use rights Land easements, non-logging concessions Performance-based payments for biodiversity Paying for bird breeding success, paying for occupied wolf dens Most Direct Payments 13

15 Potential Investments For Biodiversity & Ecosystem Services Least Direct Mature Markets Investment Support for extracted bio-products Examples Logging, non-timber, hunting Support for reduced impact use Sustainable agriculture, sustainable fisheries Support for intact use Eco-tourism, sport hunting, wild honey Payment for other environmental services Carbon, watershed protection Payment for use rights Land easements, non-logging concessions Performance-based payments for biodiversity Paying for bird breeding success, paying for occupied wolf dens Most Direct No markets 14

16 Potential Investments For Biodiversity & Ecosystem Services Least Direct Mature Markets Investment Mature Markets Support for extracted bio-products Support for reduced impact use Support for intact use Payment for other environmental services Payment for use rights Performance-based payments for biodiversity Most Direct Paying For Biodiversity & Ecosystem Services Directly No markets 15

17 Part I. Shellcatch: The Real Fish Story 16% of the world s protein >200 million people $82 billion ¼ of global catch is bycatch Seabirds & turtles Ecosystem impacts 16

18 Part I. Shellcatch: The Real Fish Story Over a third of seafood is mislabeled Seafood industry is calling for systems that ensure that U.S. seafood is safe, legal, and honestly labeled Traceability has been challenging. Market Opportunity 17 17

19 Shellcatch: The Real Fish Story 18

20 Part I. Shellcatch: The Real Fish Story Least Direct Mature Markets Investment Support for extracted bio-products Examples Logging, non-timber, hunting Support for reduced impact use Support for intact use Sustainable agriculture, alternative income generation Eco-tourism, sport hunting, wild honey Payment for other environmental services Carbon, watershed protection Payment for use rights Easements, non-logging concessions Performance-based payments for biodiversity Most Direct Paying for bird breeding success, paying for occupied wolf dens No Markets 19

21 Part II. Creating Innovative Solutions for Fisheries Bycatch The social and economic importance of fisheries and the biological realities of overfishing and bycatch result in major tensions over ocean resources. 20

22 Part II. Creating Innovative Solutions for Fisheries Bycatch Adults & Nesting Sites Juveniles (~40 years) Juveniles (~40 years) Pacific Loggerhead Sea Turtle 21

23 Part II. Creating Innovative Solutions for Fisheries Bycatch Juveniles (~40 years) U.S. Hawaiian Long-line Fishery Regulated Industrial $50 million a year Bycatch Measures In Place 17 turtles year -1 = closure 22

24 Part II. Creating Innovative Solutions for Fisheries Bycatch Juveniles (~40 years) Regulated Industrial $50 million a year Bycatch Measures In Place 17 turtles year -1 = closure Unregulated Industrial No Bycatch Measures Turtles year -1 =? 23

25 Part II. Creating Innovative Solutions for Fisheries Bycatch Unregulated Artisanal <$100,000 Turtles year -1 = >2,000 Scientific knowledge Community outreach 24

26 Part II. Creating Innovative Solutions for Fisheries Bycatch $$ Saved sea turtles Interfishery Bycatch Offsets Regulated industrial fishers buy bycatch credits (avoided mortality) in exchange for regulatory certainty around closures. Artisanal fishers change where and how they fish in exchange for financial payments. Challenge: need technology to documents and certify the bycatch credits (avoided mortality). 25

27 Part I. + Part II. = Direct, high-impact outcomes Directly investing biodiversity services by integrating a program with an existing environmental market, and providing opportunities for environmental risk management. 26

28 Potential Investments For Biodiversity & Ecosystem Services Least Direct Mature Markets Investment Mature Markets Support for extracted bio-products Support for reduced impact use Support for intact use Payment for other environmental services Payment for use rights Performance-based payments for biodiversity Most Direct Paying For Biodiversity & Ecosystem Services Directly No markets 27

29 Hypothetical Case: Market-influenced & outcome-based approach for the Sundarbans 100% Market 100% Charity Outcome-based Input-based 28 28

30 Summary of Conclusions Tourism is a valuable industry; it also relies heavily on intact biodiversity & ecosystem services As tourism continues to expand in response to consumer demand trends, it puts more pressure on natural resources and is increasingly susceptible to environmental risk Leveraging market-influenced and outcome-based approaches for environmental protection can help minimize risk carried by tourism businesses and destinations, and incentivize placebased environmental stewardship 29 29

31 Thank You

32 Questions and Answers C. Josh Donlan, PhD Founder and Director Advanced Conservation Strategies Christina Heyniger Strategic Accounts & Sustainable Tourism Vital Wave Consulting 31