This article was written with Jonathan Adams.
Over the past decade, sugarcane farmers in the Cauca Valley, near Colombia’s Pacific coast, have become increasingly concerned about the availability of water for irrigating their fields. The valley is home to one of the richest cane-growing regions in the world. The Nature Conservancy (TNC, where I am president and CEO) met with the farmers in October 2011 to develop a solution that would draw on both basic ecology and economics: Defend the water supply by protecting the forested watersheds that feed the Cauca River. The cane growers are now helping ensure that the forests remain intact through an investment strategy called a water fund—an endowment for water conservation.
The idea is simple: Treat those upstream forests as valuable natural capital. Make a relatively small investment in nature now to obtain plentiful clean water in the future, and avoid the prospect of much higher future spending on expensive filtration plants and equipment. Not only does it cost less to protect the forests than to implement the engineered alternative, but the investment also produces a host of other benefits, including improved wildlife habitat and cleaner water for local communities.
Environmentalists sometimes see large agricultural interests such as cane growers as the enemy. But in doing so, they are missing out on an opportunity that could have far-reaching effects. Environmental issues are rarely black and white, and finding common ground can open the door to effective conservation programs and bottom-line growth—both for small businesses like the Colombian sugarcane farms and, potentially, for large multinational corporations. It’s an idea we’ve heard before, but one that has been difficult to put into practice. Historically, that’s in part because we environmentalists have done a better job of speaking to one another than to businesspeople. We need to get better at growing the constituency of conservation, and getting others to prioritize protecting nature.
We can begin to change the dynamic by demonstrating the investment opportunities that nature can offer. Emphasizing the pragmatic value of nature has rarely been a strength of environmentalists. To champion long-term investments, we should listen closely to what businesses and governments need, and think carefully about how nature can help fill these gaps. Although many leaders may be personally dedicated to protecting nature, I know from experience that environmentalists cannot depend on goodwill alone. The surest way to get the attention and commitment of key stakeholders is to put environmental issues in terms of “here’s what’s in it for you.”
Making the Case
When I started my first job on Wall Street more than 25 years ago, few (if any) bankers spent much time considering the business opportunities of making investments in nature. I know I didn’t. We didn’t think the environmental community had much to tell us about how to run our business, and my guess is that the feeling was mutual.
But times and attitudes change. I began working on an environ-mental effort at Goldman Sachs in 2005, with the support of then CEO Henry M. Paulson. We thought it made great commercial sense to be smarter about environmental issues. Our primary motivation was not philanthropy or corporate social responsibility; it was purely business. The fundamental idea was to look for investment opportunities that produced two kinds of benefits: strong commercial results for Goldman Sachs and positive environmental outcomes. The more we pursued these win-win opportunities, the more we found.
From my current vantage point on the environmental side, I see a similar transformation in thinking. Today, as the leader of TNC, I collaborate, together with my colleagues, with businesses, governments, and other groups not usually considered to be environmentalists. Alliances like these can still be difficult terrain for a conservation organization. But by focusing on the value of nature, environmentalists can reach those who once stood on the sidelines of conservation, and even those sometimes viewed as opponents. Instead of vilifying them, we can see what they want to accomplish and find shared goals.