How Dow Protects Its Business Assets Using Nature

Dow Chemical and The Nature Conservancy have released a new study focusing on how nature can help protect business assets from natural disasters.

Based on research completed as part of the ongoing Dow-TNC collaboration, the study demonstrates that asset protection strategies can include green infrastructure — such as marshes, mangroves, coral and oyster reefs — along with more conventional infrastructure — such as dykes and levees — to protect business assets from hurricanes and flooding.

The study focused on Dow’s largest integrated manufacturing facility worldwide, Dow Texas Operations located in Freeport, Texas, and sought to evaluate options for protecting a major coastal manufacturing facility.

Dow has set a goal, be accomplished by 2025, to deliver $1 billion in cost savings or new cash flow by valuing nature in business decisions.

The Dow-TNC study findings were as follows:

• Natural-hazard risk-mitigation strategies that use both levees and habitats at the study site can provide the greatest benefits to businesses, the public and biodiversity.
• Coastal marshes can reduce the destructive force of waves from storms, potentially reducing wave heights, damages, and levee construction costs.
• This reduction in the storm force of waves can provide some protection near shore and under small storm conditions, which may help mitigate sea-level rise and improve levee performance.
• However, protection at the study site far from shore and under large storm conditions was not sufficient to warrant a reduction in levee height.
• Additionally, coastal marshes have social, environmental and economic benefits beyond those of traditional infrastructure, including providing recreational opportunities, support for fisheries and habitat for wildlife.

As financial losses due to natural catastrophes continue to increase and storm activity escalates, the need for adequate infrastructure has become much more apparent. For example, according to the Insurance Information Institute, 2011 marked the largest worldwide loss on record with $380 billion in total losses — 37 percent of which can be attributed to storms and flooding — shining light on a need for more resilient infrastructure to help protect people and assets in the worst weather conditions.

The study was published online and in the October print edition of Integrated Environmental Assessment and Management (IEAM).

This study results from the ongoing 6-year, $10-million Dow-TNC collaboration, which aims to incorporate the value of nature into business decision-making. Launched in 2011, the collaborative work involves validating tools and models that can assign a value to ecosystem services — such as water, land, air, oceans and a variety of plant and animal life — to support Dow’s decision-making when it comes to designing, constructing and operating its manufacturing sites.

Results from this collaboration will be shared publicly for the benefit of other companies and the scientific and economic communities.

Dow, along with Coca-Cola and Shell, are among 10 major firms that is testing the Natural Capital Protocol, which aims to help businesses improve their decision making by standardizing how their relationship with nature is measured and valued.