December 4th, 2013


Senior Director, Environmental Sustainability, Microsoft Corporation

Director of Biodiversity & Ecosystem Services, Business for Social Responsibility

Founder, REDD+

Forests are among the most important life systems on the planet, yet they continue to be destroyed for agriculture, urban development and energy production. While many companies exploit forests to extract natural resources or convert it to farmland, others are investing in conservation to protect the climate.
“Standing trees are perceived as having value once you cut them down,” said Sissel Waage, director of Biodiversity & Ecosystem Services at Business for Social Responsibility. "The reality is, they actually have a lot of value standing, we just haven’t built it into how we account for nature and the economy."
Puma, Walt Disney Company and Microsoft are some companies that have initiated efforts to internalize environmental externalities. With the technological shift to the cloud, software companies are using less packaging material, but consuming more energy to build and maintain data centers.
When Microsoft made a pledge to be carbon neutral in July 2012, "the organization got behind it very quickly," said TJ DiCaprio, Senior Director of Environmental Sustainability at Microsoft Corporation. The company instituted an internal carbon tax to offset pollution.
“You’re increasingly starting to see a low-carbon parade, and as a corporate player and corporate leader, you have a choice: You can join the parade or you can become a leader and call it your own parade,” Waage said.
More companies have not engaged in investing in forests to offset carbon because they either don’t know about efforts like REDD+ (Reducing Emissions from Deforestation and Degradation), or they are thwarted by the perception of risks.
There were some bad experiences 4 or 5 years ago, but we really don't see that anymore in the REDD+ industry, according to Mike Korchinsky, project developer for REDD+, and founder and CEO of Wildlife Works. Wildlife Works is the world's leading REDD+ project development and management company, helping local landowners in the developing world monetize their forest and biodiversity assets. REDD+ was originated by the United Nations to help stop the destruction of the world's forests.
“The benefits now far outweigh the risks,” Korchinsky said.
Wildlife Works cooperates with indigenous forest communities to give them the option of earning money to keep the forests standing. Its Kenya project protects over 500,000 acres of highly threatened Kenyan forest. Many forest populations are impoverished and remote, but not all communities fit the same mold, he said.
“In general, we find they’re positive about this idea, and that they see it as a real opportunity to bring investment into their community to allow them to go down a non-destructive path,” Korchinsky said.
Brazil has more than three times as much tropical forests as any other tropical country on the planet, over 1.2 billion acres, dominating the conversation on how forest protection might happen.
“If we don’t think about forests and maintaining forests, and the importance of forests in terms of natural capital, we’re going to have increasing problems,” Waage said. “We will have unintended release of carbon at massive scales, as per the fires we’ve seen in Brazil over the past few years.”
They discussed the difficulty of conservation in Indonesia, where massive deforestation has taken place over the last 20 years for the production of palm oil, which is very lucrative.
“It’s used in almost every product you can imagine for food,” Korchinsky said. “And that palm oil more than likely came from destruction of Indonesia’s rainforests.”
“To create a competitive alternative to that, that doesn’t involve destroying forests, is very difficult, and I think will remain a challenge in Indonesia.”
More companies seem to be getting interested in offsetting pollution, but it’s a challenge for corporate leaders to look and actually think about what it means for supply chain management, Waage said.
"Increasingly, the engagement is there, but it's not at the level it's going to need to be, honestly," she said.
Any company that is well-managed should have an internalized carbon fee to offset carbon, according to DiCaprio. She argued that taking responsibility benefits Microsoft shareholders because "we're driving efficiency."
“While technology also consumes a lot of energy in keeping our devices going, it also promotes that transparency that helps us be responsible,” she said.
The conversations are very different from company to company, but the environmental issues are not disputed, according to Waage. But in addition to economic impacts, taking responsibility for environmental costs is dependent on social standards.
"I wish more companies would come out of the closet, so to speak, and talk about what they're doing," Waage said.
- Danielle Torrent
December 4, 2013
Photos by Rikki Ward
The Commonwealth Club of California