Regional Ecosystem Services and the Rating of Investment Opportunities

Environmental scientists and financial experts have recently been asking whether the damage costs imposed on the environment by industrial resource uses (often referred to as externalities) can be reflected in financial markets. We examine this question by summarizing work on mechanisms for includin...

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Bibliographic Details
Published in:Frontiers in ecology and the environment 2004-05, Vol.2 (4), p.207-216
Main Authors: Loucks, Orie L., Gorman, Raymond F.
Format: Article
Language:English
Subjects:
Ecological economics
Ecological sustainability
Ecosystem services
Ecosystems
Environmental conservation
Financial investments
Freshwater ecosystems
Green businesses
Lentic systems
Natural resources conservation
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Summary:Environmental scientists and financial experts have recently been asking whether the damage costs imposed on the environment by industrial resource uses (often referred to as externalities) can be reflected in financial markets. We examine this question by summarizing work on mechanisms for including the damage to (or recovery of) ecosystem services directly in the price of a company's stocks and bonds and call this concept "environmental value creation through investment" (EVCI). Ten functions and 36 ecosystem services are presented that can benefit from good corporate environmental performance. Rating publicly traded companies requires collaboration between ecosystem scientists and business analysts. Metrics are being developed for reporting the impact of business practices on the value of ecosystem services within regions across the US.
ISSN:1540-9295
1540-9309
DOI:10.1890/1540-9295(2004)002[0207:RESATR]2.0.CO;2