Dow and The Nature Conservancy: 10 years of collaborating on the business case for nature

Ten years ago, The Nature Conservancy and Dow came together to answer a basic question: How can we work together to make the business case for nature? Speaking from the Detroit Economic Club, the CEOs of Dow and The Nature Conservancy announced that one of world’s largest science and technology companies and one of the world’s largest environmental nonprofits would join forces to figure out how to value the services of nature in order to make better business decisions.

At the beginning of this collaboration, Dow and The Nature Conservancy were unlikely partners. A chemical company and a conservation NGO were on two ends of the spectrum. What we had in common was a commitment to science and to figuring out how to operationalize the value of nature in business. We believed that when a company makes a fully informed decision on how its operations rely on and affect nature, it can lead to better outcomes for business and for conservation. Our goal was to create a “new normal” where nature is a critical consideration in business decisions.

It was a big challenge. While most of us understand that clean air, clean water and biodiversity are essential to our well-being and strong economy, few businesses actually factor the value of ecosystem services into their decision-making. Now, a decade later, we’ve made significant strides toward not only demonstrating the business case for valuing nature, but also developing and sharing the tools and methodology needed for companies and other organizations to build nature into their everyday practices.

How do you begin to value nature if you’re a global corporation like Dow? You begin at the site level. To ensure Dow was able to make better decisions for nature and our company, the collaboration had to figure out how to assess natural assets at the local level – and find opportunities to build nature’s value into decisions that concerned that particular site. We needed to find out if there was a solid business case for nature.

Among our milestones:

• We started with pilot studies at our sites. We worked with The Nature Conservancy and looked at water conservation, air purification and coastal wetland buffers to hurricanes. For example, at our Freeport, Texas, site, our studies found that improving air quality through large-scale reforestation can be cost-competitive compared to conventional control options. And coastal marshes can help maintain the performance of levees and reduce erosion in the face of sea-level rise. It made us believe that we could identify a lot of value if we looked at all of Dow’s properties and facilities around the world. This led to the second part of our collaboration … and a billion-dollar bet.
  
• In 2015, we issued our groundbreaking 2025 Valuing Nature Goal, part of our 2025 Sustainability Goals. Dow committed to deliver $1 billion in net present value (NPV) by 2025 through business-driven projects that enhance nature and to screen all capital and real estate projects, business development and new products for potential benefit and impacts. Dow was the first company to commit to systematically value nature on such a large scale. The Nature Conservancy worked with us to set up a process within the company to identify “nature-based” projects that would deliver business-driven value.
• To achieve our Valuing Nature Goal, we needed a structured framework and methodology for evaluating nature-based project alternatives alongside conventional, “gray” infrastructure projects. The Nature Conservancy worked with Dow to develop methods and approaches to identifying project impacts at the landscape level. We knew the trick was to develop tools that would be easy to use and can produce results that are scientifically credible. We delivered a suite of tools – The Nature Screen, the Ecosystem Services Identification & Inventory, or ESII, tool and the Nature Scorecard. See examples of projects here.

Having the processes in tools in place was only half the equation. We still needed to make valuing nature “second nature” to our employees and actionable at the site level. In addition to the top-down goal, we needed bottom-up culture change. To jump-start that, our Nature team traveled to Dow sites across the globe to demonstrate the tools and talk about potential projects. We now have mainstreamed these tools across Dow and are more than halfway to achieving $1 billion in business value, mostly through avoided costs. As the collaboration moves forward, we are furthering our work in specific areas, such as water resilience, coastal resilience, climate adaptation and carbon reduction.

A common thread across our 2025 Sustainability Goals is our focus on finding collaborative blueprints that will lead to transformative and more sustainable ways to do business. Not just for Dow, but for other companies and organizations, too. Beyond the bottom-line benefits, we hope the collaboration between Dow and The Nature Conservancy demonstrates to other companies how shared risks – such as water scarcity and climate disruption – can become shared opportunities for businesses and communities when they invest in nature-based solutions. That is why we continue to share our share all tools, lessons learned and research results publicly and through peer review to enable other companies, scientists and interested parties to test and apply them.

A decade since its launch, our collaboration with The Nature Conservancy shows how partners who bring complementary strengths and experiences to a project can break new ground and enhance sustainability expertise beyond their organizations. By finding common ground, we have been able to tap into our differing perspectives, skillsets, stakeholder relationships and priorities to forge new paths – paths that we hope others can follow and that lead to better decisions for business … and better for nature.

Visit the Dow-TNC collaboration page to learn more about the impact of the 10-year collaboration and visit our groundbreaking Valuing Nature Goal.

Mary Draves, Chief Sustainability Officer and Vice President of Environment, Health and Safety