Climate Change and Desertification: The Link to Corporate Responsibility

Authors

• Laura Ediger

  Former Associate Director, BSR

Throughout history, every continent has harbored dry landscapes that depend on limited rainfall and are vulnerable to desertification, the process through which vegetation and soil moisture is lost and dry lands become more like deserts. Now, global climate change is making the situation worse.

The examples range across geographies: Spain already loses an estimated US$200 million per year due to desertification, and it's expected to get even hotter and drier over the next 50 years. Across the sea in northern Africa, fragile dry environments are losing their productivity along with the capacity to support subsistence farmers and herders. Even the Amazon is at risk, with deforestation, drought, and rising temperatures creating conditions that could quickly turn the world’s largest rainforest into savanna or desert.

Most of the desertification hot spots are in relatively poor, rural places, where the removal of vegetation is due to cultivation, grazing, and domestic use by local communities. But for global companies in many industries, the impacts are relevant because of the potential risks both to the sites where they operate and to the sustainability of their supply networks, which may be undermined by increasingly inhospitable landscapes.

Later this week, on the World Day to Combat Desertification, most of the emphasis will likely be on government intervention and NGO assistance, but there are clear opportunities for the private sector to play a role as well—especially as more companies begin to look carefully at their environmental impacts. Businesses can invest in local projects to halt or reverse desertification, engage with suppliers to reduce degradation, and create products that improve agricultural sustainability and enable the restoration of damaged land.

Investing in Local Projects

In northern China, desertification is the root cause of the heavy spring sandstorms that plague Beijing and also spread to Korea, Japan, and even North America. In early 2010, Hong Kong blamed its worst ever air pollution on northern sandstorms. The Chinese government has made fighting desertification a top priority, with plans to construct a “Green Great Wall” to hold back the desert. The private sector is chipping in as well: Hyundai is planting a 50-square-kilometer grassland reserve in Inner Mongolia as its first global environmental corporate social responsibility (CSR) project, and Toyota will plant 1,500 hectares of trees in the Hebei Province, which supplies much of Beijing's water.

ABB, a Swiss company that provides power and automation technology, has also taken steps to address desertification in northern China, which has a direct physical impact on ABB's projects because high-voltage power lines in Inner Mongolia are affected by dune movement and encroaching desert. ABB is working with Inner Mongolia Power and the local power supply bureau to reforest hundreds of hectares and create a barrier to anchor nearby dunes. The company has turned this effort into an employee-engagement initiative.

Working with Suppliers

Supply chains—particularly for textile and apparel companies—may contribute to degradation if they include livestock products from arid or semi-arid regions, which are vulnerable to negative impacts from overgrazing. The production of low-cost cashmere in China has soared, along with the goat population, testing the carrying capacity of the grassland and increasing desertification. As a result, retailers like Marks and Spencer are including the environmental management of their cashmere suppliers as a factor in supplier evaluation.

Intensive cotton production with high levels of chemical input is another substantial cause of desertification, particularly in Turkmenistan and Uzbekistan. Sustainable cotton sourcing has become a priority due to the use of child labor in some regions, but improving traceability also could enable companies to reduce their environmental impacts through strategic sourcing from areas that have lower risk of desertification.

Lastly, wood and timber products are potentially linked to deforestation, another key cause of desertification, but efforts by the Forest Stewardship Council and others to certify sustainable forestry practices and chains of custody have created mechanisms for making sure that environmental impacts are minimized.

Creating Sustainable Products and Solutions

Other businesses see the challenges of vulnerable arid and semi-arid landscapes as a market opportunity. BASF, Bayer, Dow, DuPont, Monsanto, and Syngenta have invested heavily in research into drought-resistant seeds and technologies like water-retention gels for use in planting crops and trees, which could be helpful for re-vegetation of degraded areas.

Environmental degradation can also be addressed through careful decisions about the ways in which land is used. This is especially relevant as changing climatic conditions add another element of uncertainty into resource management. To better understand their environmental impacts, companies should view ecosystems and resources more holistically. This means understanding not only the component parts but the relationships between them and the emergent properties of an ecosystem—the ways in which it is greater than the sum of its parts.

Organizations such as BSR's Environmental Services, Tools & Markets working group are making progress by using tools to assess resources and landscapes in terms of the value of the services they provide. While environmental economists and ecologists are still wrestling with translating these services into quantitative terms, approaching environmental issues through this lens can be instructive for companies wanting to take a more comprehensive approach. Taking ecosystem services into consideration for strategic planning and assessment of operational impacts should help businesses understand their risks and dependencies on ecosystem services. Indeed, when viewed through an ecosystem services lens, the costs of desertification become even more significant. That’s because in the process of desertification, land loses not only its immediate economic value to humans when agriculture or grazing is no longer possible, but also the value created by soil stabilization, biodiversity, rain infiltration, nutrient retention, carbon sequestration, and climate regulation.

Initiatives to fight desertification can have clear and immediate environmental benefits, but the expected impacts of climate change demand a more far-sighted and systemic approach to local and global land-use allocations. Shifting climate patterns will alter the ability of an ecosystem to provide certain services, and so must also change the calculus of land-use decisions.

For businesses with global reach, adaptation to climate change should include not only long-term projections of how a warming planet will change the availability of certain resources, but also a nuanced understanding of how the complex services provided by functioning ecosystems are influenced by and enable their own operations. Policymakers are beginning to think this way; businesses will have to as well.