CO R P O R A T E WO R L D & B I O D I V E RS I T Y

– AN ISSUE AT AERF

PROLOGUE

It was an early Sunday morning in Pune. The sun was yet to totally spread its reign over the
sleeping city. A light breeze made the leaves whisper to each other. Birds were excitedly
chirping away. It was a wonderful day for a weekend. Most people were yet to get up from
their slumber, but not Mr. JS. The co-director of Applied Environmental Research
Foundation (AERF) was a worried man. He just couldn’t relax. Innumerable thoughts were
racing in his mind. It had to do with the work of his NGO. Despite a 14 year presence in the
field of conservation, AERF still had no guaranteed source of sustainable cash flow. The
name ‘AERF’ failed to ring a bell as a premier organization in the eco-field. Attracting and
retaining human resources was a major worry. In short, things were simply horrible. And to
make matters worse, he had a meeting scheduled for the next day.
Companies needed to be contacted at a much faster pace and it was equally important to
strike good deals to garner support. After contacting about 52 companies, Mr. JS had finally
got a break through to get an appointment fixed with Mr. Aravind of Bharat Mining
Company.
Bharat Mining Company is a renowned firm dealing with Mining operations. It has mines in
Goa. The company is strictly bounded by various environmental requirements especially
because of tourists’ interest in Goa. Mr. Aravind knew about the fund issue that AERF was
facing and hence had demanded a partnership in Nature Connect, a new venture by AERF, in
lieu of the funds they'll be providing. Mr. JS had to take a decision before Monday’s meeting.
But, there was a dilemma. There was a chance that the deal could lead to severe
commercialization of the NGO’s venture. On the other hand, the stakes were high. The deal
could solve the long standing problem of funding. Also, it could give some much needed
visibility to the NGO and help in attracting more supporters and sponsors.
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BACKGROUND

BIODIVERSITY

The Millennium Ecosystem Assessment (MA) is the most recent comprehensive statement of
the significant environmental challenges facing society today, which include climate change,
biodiversity loss, increasing water scarcity, and nutrient deposition.
The Convention on Biological Diversity (CBD) defines biodiversity as: “the variability
among living organisms from all sources including, inter alia, terrestrial, marine and other
aquatic ecosystems and the ecological complexes of which they are part; this includes
diversity within species, between species and of ecosystems”
The CBD further defines and provides guidance for the ‘sustainable use’ of biodiversity and
its component resources. The latter include “genetic resources, organisms or parts thereof,
populations, or any other biotic component of ecosystems with actual or potential use or
value for humanity”, while sustainable use is defined as “the use of components of biological
diversity in a way and at a rate that does not lead to the long-term decline of biological
diversity, thereby maintaining its potential to meet the needs and aspirations of present and
future generations”.
Put simply, biodiversity is ‘life on earth’. At a fundamental level, all economies and all
businesses depend, directly or indirectly, on biodiversity and its component resources.
Biodiversity is similarly recognized in the MA as the foundation of all ecosystem services,
which in turn support and protect economic activity and property. The MA adopts an
inclusive definition of ecosystem services, which consist of provisioning, regulating,
supporting and cultural benefits provided by natural ecosystems.
A growing body of research documents show how biological diversity increases economic
productivity in a range of sectors, enhances our direct enjoyment of nature, reduces
ecological and health risks, and improves resilience in the face of shocks. Thus, by
conserving biodiversity, we secure the ecosystem services upon which all economies rely.
Despite the socio-economic importance of biodiversity and ecosystem services, their values
are not well reflected in contemporary economic and development policies, investment
decisions and private consumption patterns. This has been highlighted repeatedly in
multilateral policy discussions, for example the 2007 G8 environment ministerial meeting in
Potsdam, which called for a study of “the economic significance of the global loss of
biodiversity” as well as efforts to enhance public and private financing of conservation.
Humanity’s dependence on biodiversity is increasingly apparent while the global loss of
biodiversity is increasingly well-documented. The MA, for example, reports that the current
pace of species loss is up to 1,000 times higher than the background rates typical over the
earth’s history (Exhibit 1). Habitat is disappearing rapidly, as we continue to develop land for
farming, forestry, livestock pasture and other uses. For example, a total of 670,000 km2 of
tropical forests were lost in the Caribbean, Central and South America in the period 1980 to
1995. Mangrove forests, once covering more than 200,000 km2 of coastline, have suffered
losses of up to 86 percent in certain locations and continue to disappear at a rate of 1–2
percent per year. 20 percent of the world’s coral reefs have been effectively destroyed and

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show no immediate prospects of recovery, with a further 24 percent considered at risk of
imminent collapse.
Today, biodiversity conservation is mainly viewed by business as a risk or liability, rather
than a potential profit centre. However, this perception is beginning to change. As public
awareness of the global biodiversity crisis grows, an increasing number of companies see a
business advantage in developing processes to integrate biodiversity into their operations, as
well as seeking market-based solutions and opportunities. Furthermore, even with modest
initial returns from most biodiversity business investments – in the range of 5 to 10 percent
per annum – there are significant profits to be made as the sector grows from niche markets
to mainstream business.
From a business perspective, the reasons to invest in biodiversity business are increasingly
compelling. They are most obvious in cases where private profitability depends directly on
the health of ecosystems – ecotourism ventures, for instance. Similarly, it is now recognized
that greater variability in genes, species and ecosystems is associated with increased
resilience and biological productivity in agriculture, ranching, forestry and marine fisheries.
Even businesses in urban areas, lacking a direct interaction with the natural world, can be
motivated by new policy incentives and changing consumer preferences to ‘go green’.
Corporate action on biodiversity can help businesses distinguish themselves from competitors
while also improving relations with investors, employees, local communities and others.
But what is disturbing is the evidence emerging from a range of sources which suggests that
current efforts to conserve biodiversity are merely slowing, rather than reversing, the global
erosion of biodiversity (Exhibit 2). There is growing realization that the world is unlikely to
achieve “a significant reduction of the current rate of biodiversity loss by 2010”, as agreed by
government leaders at the World Summit on Sustainable Development in 2002. Long-term
prospects for conservation remain very uncertain, due to climate change and a host of other
threats (e.g. the rapid spread of invasive alien species through trade, increasing concentration
of human populations in coastal areas, developments in biotechnology). Growing awareness
of climate change, in particular, has led to increasing concern about its adverse impacts on
biodiversity, but also of the potentially significant role that biological resources can play in
mitigating and adapting to climate change.
The biodiversity challenge is greatest in the developing world, where conservation efforts are
often constrained by political and macroeconomic instability, widespread poverty, and under-
developed local economies, lack of capacity and resources and institutional weaknesses in
relevant public sector bodies. It has been estimated that “well over one half of all protected
areas occur in nations where governance is weak”. The result is many poorly protected
‘paper parks’, a failure to conserve biodiversity, and, in other cases, conflict with local
communities. (Exhibit 3)
The world as a whole is not short of funds. What is lacking is the motivation for increased
private investment in biodiversity, especially in the tropics, where both the conservation need
and funding gap are greatest. The potential for change through increased engagement of the
private sector is highlighted in (Exhibit 4), which contrasts the gap in biodiversity funding
with the scale of development assistance, private capital flows, exports and domestic markets
in developing countries. If even a small fraction of global economic activity can be mobilized
for conservation, then prospects for biodiversity could be significantly improved.

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A second common approach to enlisting the private sector in biodiversity conservation is to
persuade producers and consumers to reduce or refrain from environmentally harmful
activities. This may be achieved through mandatory or voluntary measures. Examples include
environmental assessment and mitigation requirements for large investments, land-use
zoning, restrictions on allowable technology, emission standards to limit pollution, voluntary
commitments to reduce waste and avoid damage to habitat. Private expenditure to undertake
such actions can be substantial, where compliance is good. Like tax-and-spend, however, this
approach also involves ‘swimming against the tide’. So long as environmentally-harmful
activities are less costly or more profitable than biodiversity-friendly ones, people might be
tempted to cheat, or make only token contributions to environmental protection while
continuing to devote most of their effort to damaging activities. As a result, governments (and
some NGOs) are obliged to spend considerable effort on monitoring and enforcement.
Examples can be found in other business sectors, where greater biodiversity is associated
with lower costs, increased productivity and ultimately higher profits. In a range of contexts,
scientists have discovered that greater variability in genes, species and ecosystems is
associated with increased biological productivity, resilience and consumer preference.
The main drivers of private investment in conservation are thus legal requirements, charitable
impulses and informal pressure from investors, shareholders, local communities and / or
NGOs. More generally, the business case for investing in biodiversity is expressed in terms
of:

• Avoiding delays, securing access to natural resources as well as access to capital,

insurance or partnerships.
• Relationships with employees, communities and regulators.
• Policy influence or the potential to inform emerging environmental regulation
As awareness of the business case for biodiversity increases, more companies are seeking to
distinguish themselves from competitors and gain favor with the public by supporting
conservation efforts.

APPLIED ENVIRONMENTAL RESEARCH FOUNDATION

Applied Environmental Research Foundation (AERF) is a registered Non Governmental

Organization based in Pune, India and is working in the field of community based
conservation. Founded in 1994, AERF has been trying to address the issue of biodiversity
conservation at the grass roots level. It has developed approaches and models and is working
to involve people, especially the local communities, in the cause of conservation. The
organization is driven by passion and a commitment to conservation and believes in
community based conservation or participatory conservation
AERF aims to maintain a balance between conservation of valuable biodiversity, forests,
ecosystems and use of natural resources for the development of people. AERF is engaged in
creating a link between research in the field of conservation and its actual use in action for
conservation on the ground. AERF believes in establishing this link between research and its
effective use in the process of development for poverty alleviation; sustainable resource use

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and ecosystem development. It provides various Bio-diversity offsets 1 to corporate for
reducing their ecological footprint2.
AERF has been expanding its scope of work and interests by dwelling into pure research
based projects that are funded by international foundations. It is also undertaking organized
development and livelihood based projects such as the widely publicized World Bank
(GVEP) funded program on the development of decentralized bio-fuel centers in Raigad
district of Maharashtra.
AERF goes beyond research to find practical ways in eco-conservation and community
development. AERF takes a scientific approach to conservation, based on analysis of what is
needed to ensure the preservation of the local plants, animals, and ecosystems. AERF
believes in community based conservation or participatory conservation which implies
involving people in the process of conservation.
AERF operates through a strong network of organizations. Some of the organizations with
which AERF has collaborated in the past are: Misereor Germany, Earth Love Fund UK,
UNESCO, IPGRI, GTZ, Plant Life International, Govt. of India - Ministry of Environment
and Forests, Govt. of India - Ministry of non conventional energy sources, British Ecological
society, Rufford Small Grant, Conservation Leadership Program, Global village energy
partnership (GVEP), Dorab Tata Trust, Winrock International India and IDRC.
AERF has also seen corporate participation by Lab India and Suzlon Ltd. AERF also has
links with educational institutes like Tata Institute of Social Sciences (TISS), Indian Institute
of Technology (IIT), Bombay.

KEY PROJECTS UNDERTAKEN

• Decentralized Bio-diesel Resource centers

• Village Electrification Program
• Eco-restoration of Sacred Groves
• Revival of Traditional Conservation practices
• The Great Hornbill Project
• Medicinal Plants and Livelihood
• Biodiversity Act Awareness Program

THE SITUATION

Conservation is expensive work. There isn’t much scope for mechanization and its labor
oriented. Besides, it requires a whole bunch of fiercely dedicated individuals who can vow to
devote their body, mind and soul into it. But, what is equally important is a sustainable source
of cash flow. Association with corporate world helps as it serves a two-way purpose. Besides
lending a financial hand to the NGO, it also serves a way for corporate world to carry out
Corporate Social Responsibility (CSR) activities.

1 Refer Technical Note for Biodiversity - offset

2 Refer Technical Note for Ecological Footprint

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ISSUES

AERF, like most non-profit companies, always faced a financial crunch. For the same
purpose, they recently developed a program called Corporate Conservation Program (CCP).
This program offers the corporate a way to make a contribution towards society. AERF offers
various programs under this head, such as – Various environmental assessments, Sponsor a forest,
Sponsor a Project, etc. They even provide a customized project if required to the company. It
has a mutual benefit as AERF gets funds and the corporate world can get Green Thumb
certification, Carbon credits etc. and an offset for the damages caused by them to the
environment. This helps the corporate world also to fulfill their environmental requirements.

STEPS TAKEN

AERF has been contacting companies with this program. They are not practicing any
marketing and publicity as they believe that the good work speaks for itself. They have
contacted around 52 companies for this program but have not received any positive response.
This can be contributed to lack of visibility as most of the corporate world contacted, didn't
know about AERF. It is also equally important to direct the CSR activities already being
carried out by the corporate world towards proper work. They need to be explained that
sustainable contribution can be achieved not by providing water, food, education etc. to the
deprived segment of society, but by preserving the bio-diversity.

For overcoming the issue of funding the projects, AERF has also conceived the plan of an
ecotourism3 venture - 'Nature Connect'4. Nature Connect will be a profit-making organization
which will generate funds for the supporting the working of AERF. Nature Connect has been
specially planned to avoid the impact of restrictions and bindings on non-profit organisations.
It is to be a separately floated independent company managed by AERF. It will be a
company or enterprise aiming at conserving the environment and maintaining bio-diversity
via ecotourism, people's and corporate participation.

The plan is to create an eco-tourism venture at Dapoli in Ratnagiri district. The eco-tourism
aims at involving any people interested in undergoing training in Field Ecology and
Conservation Biology Course and further contributing to the cause of environmental
conservation. It is planned to invite experts from famous institutes abroad like DICE to
impart the courses. In addition, the enterprise aims to impart knowledge through practical
exposure to environmental benefits. AERF owns 14 acres of forested land rich in bio-
diversity and this is the most important asset that it can utilize to generate revenue. It is
important to make people understand the actual problems facing the environment and convey
to them the seriousness of the issue. But this concept will also start bearing fruits after around
3 years.

As mentioned earlier, funding is the major problem. AERF has been associated with a few
corporates, Suzlon Energy being a major one. But, the requirement of assured source of cash
flows for sustainable conservation work still exists. Mostly, it gets project funding which a

3 Refer Technical Note for ecotourism

4 Refer Technical Note for concept of Nature Connect

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corporate gives for a specific project done in association with itself. What ails the
organisation is core financing.

OTHER RELATED ISSUES

The organisation also faces issue of limited resources in terms of manpower. Conservation
work requires lots of dedicated man-power. In order to involve more of corporate as well as
general public in conservation activities, there needs to be a dedicated resource working only
towards developing these relations as well as marketing strategies for AERF. This is required
as such associations do not happen in a day but may even take several months to even a year
for conversations to become fruitful. Generally people have a belief that conservation
practices are to be followed by the NGOs and government. There is a need to sensitize and
motivate people towards conservation so that they actively participate on the ground. This is
important to have sustainable efforts. This problem stems from the fact that AERF has failed
to attract human resources. Lack of visibility and finance are two major culprits.

The visibility of the organization is poor. Despite a 14-year presence in the conservation
field, AERF fails to ring a bell as a premier organization in the field. Thus, it so happens that
interested people have no idea about the organization. And, it’s difficult for AERF to recruit
people like any company since they are not in a position to ensure good pays and added
benefits. So, getting needy people looking for any kind of job is also out of question since
these people need some assured pay-rise and climbing up the ladder benefits. The lack of
visibility also means that other institutes, organizations and companies, who do want to work
for conservation, rarely come to know about this NGO. Thus, it loses out on the opportunity
to get associated with these.

THE DILEMMA

Mr. JS was thinking how should he go ahead with this deal? Or can the organization revamp
its structure and functioning so that their goals can be achieved without having to associate
with Bharat Mining Company?
What were the reasons behind the sorry state of affairs of the NGO? Can they be overcome?

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EXHIBITS

EXHIBITS 1: EXTINCTION PER THOUSAND SPECIES PER MILLENIUM

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EXHIBITS 2: RED LIST INDEX FOR BIRDS IN DIFFERENT ECOSYSTEMS

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EXHIBITS 3: REGIONAL VARIATION IN THE PERCENTAGE OF THE OVERALL
COST OF EFFECTIVE RESERVE NETWORKS THAT ARE MET

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EXHIBITS 4: BIODIVERSITY IN DEVELOPMENT FINANCE: TAPPING NEW
SOURCES

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T EA C HI N G N O T E
SYNOPSIS/OVERVIEW

Environmental conservation is a tough task. This case is about the problems faced by AERF,
a non-profit organization working to preserve bio-diversity. It talks about the issues of funds,
visibility and resources that the organization is facing and the dilemma that crops up as a
result of these. The co-director of the organization must act for the future of the company. He
knows that the NGO is in desperate need of funds but at the same time, he needs to decide
whether the NGO can allow an external company to take control by giving up some stake in
lieu of financing or can he pinpoint the pain points ailing the NGO and bail it out of trouble.

TEACHING OBJECTIVES

This case not only deals with the problems of a NGO but also handles the marketing and HR
aspect. After completing this case, students should have an increased understanding of the
following:
1. Understanding bio-diversity and the effects of harming it
2. The problems faced by non-profit organizations
3. The unstructured world of NGOs
4. The pros and cons of involving corporates with NGOs
5. The need for an NGO to project and market itself
6. The proper way to attract and manage human resources

PEDAGOGICAL OVERVIEW

This case can be handled in two parts. A single session of around 90 minutes would be
sufficient to discuss it.

Part 1: (20-25 min approx.)

The first part should discuss about bio-diversity, environment and the effects of harming
them. Also, a discussion can be initiated over the various organizations that work for eco-
conservation and the different kinds of activities carried out by them. The problems of non-
profit organizations, resource-availability for them and the way they operate in an
unstructured environment can give a basic idea to students about the main case issue that
follows.

Part 2: (45-60 min approx.)

The second part handles the main issue which has managerial implications. Here, students
should be asked to identify potential problems faced by NGOs and various solutions to them.
Then, problems pertaining to this case can be discussed. The students should be asked to
suggest actions that can be taken by the organization to counter the problems. The issues of
funding, visibility, resources are the major ones and these three should be analyzed
separately. Besides, it’s important to have the discussion on how corporates can benefit from

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involvement with the NGO and vice-versa. The corporate involvement angle is very
important since this forms a major issue of the case.
It is suggested that students should go through the case as well as the technical note so that
they can suggest activities and solutions to tackle the problem faced by the NGO.

ASSIGNMENT QUESTIONS

1. What are the other possible activities that AERF can include in Nature Connect so as to
attract more people and also generate more cash-flows?
2. Suppose you have been appointed as a marketing consultant for AERF. What suggestions
can you give the co-director to improve the visibility of the NGO?
3. You have been selected as a HR consultant for the NGO. Suggest ways to improve the
problem of human resources faced by the organization.

ANALYSIS:

Here, possible solutions to handle the issues have been stated.

AERF’s main problem is that of funds for its projects and activities. But, there are several
underlying problems that the organization faces. Lack of visibility is an important reason for
corporates not coming up to get involved with AERF. So, the issue here is the different ways
how AERF can market itself. Some ways are mentioned below.
It is evident that AERF needs to go for strong brand building to increase its visibility and
reputation as a leading eco-organization. This will also help to garner support from
corporates, funding agencies and involvement from the people. The company should focus
towards creating visibility first in areas in and around Pune. For this they can get associated
with local TV channels and ask them to contribute not in monetary terms, but by providing
free television advertisement. They can also target local magazines and newspapers to
contribute by providing space for advertising and publicity.

The other problem is of insufficient man-power to handle its work. Generally people have a
belief that conservation practices are to be followed by the NGOs and government. There is a
need to sensitize and motivate people towards conservation so that they actively participate
on the ground. This is important to have sustainable efforts. Active participation from
students can be achieved by communication through posters and events organized at school
level. This will help students know about the organization and volunteer during their
vacations or take up a part time work. Many retired people wish to keep themselves busy in
social work and AERF could be an ideal way for them to channelize their energies. AERF
should also involve in events conducted at local level during days like Earth Day, World
Environment Day and other such awareness campaigns. Presence at various conferences,
exhibitions, fairs etc. is another way to improve public exposure.
Thus, the organization needs to move from its belief that work speaks for itself and
understand that things will start moving speedily only after creating an image in the society
as people want to get associated with big and famous institutions.

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REFERENCES

1. Applied Environmental Research Foundation - http://www.aerfindia.org/

2. IUCN - Building Biodiversity Business; Joshua Bishop, Sachin Kapila, Frank Hicks,
Paul Mitchell and Francis Vorhies, 2008.
3. Biodiversity and Ecosystem Services – Bloom or Bust? A Document of the UNEP FI
Biodiversity & Ecosystem Services Work Stream (BESW), March 2008.
4. Biodiversity Indicators for National Use - Experience and Guidance; a Document of
UNEP.

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T E CH N I C A L N O T E
1. BIODIVERSITY OFFSET

Biodiversity offsets are conservation activities intended to compensate for the residual,
unavoidable harm to biodiversity caused by economic development projects133. The basic
idea of biodiversity offsets is to extend the traditional mitigation hierarchy of avoid, reduce,
rescue and repair in an effort to achieve no net loss or a net positive impact on biodiversity
(Figure 1).

FIGURE 1: BIODIVERSITY OFFSETS AND NET POSITIVE IMPACT

2. ECOLOGICAL FOOTPRINT ASSESSMENT

This is a new jargon but highly in vogue now and relates again to impact of the company
activities on environment. Calculation of carbon emissions, loss of species and habitats are
the major indicators of such assessments. This assessment is imperative in order to decide the
scale and method of environmental offset.

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3. ECOTOURISM:

Ecotourism is entirely a new approach in tourism. Ecotourism is a preserving travel to natural

areas to appreciate the cultural and natural history of the environment, taking care not to
disturb the integrity of the ecosystem, while creating economic opportunities that make
conservation and protection of natural resources advantageous to the local people.
In short, ecotourism can be categorized as tourism programme that is - "Nature based,
ecologically sustainable, where education and interpretation is a major constituent and where
local people are benefited."

All this together can be called ecotourism. If a travel does not satisfy any one of these
constituents, then it is not called a real ecotourism venture.

4. NATURE CONNECT:

Applied Environmental Research Foundation (AERF) owns some 14 acres of land in Dapoli,
Ratnagiri district of Maharashtra. Via Nature Connect, we plan to create an eco-tourism
venture at Dapoli. Besides normal tourism, this eco-tourism aims at involving any people
interested in undergoing training in Field Ecology and Conservation Biology Course and
further contributing to the cause of environmental conservation. It is planned to invite experts
from famous institutes abroad like DICE to impart the courses. In addition, the enterprise
aims to impart knowledge through practical exposure to environmental benefits. AERF owns
14 acres of forested land rich in bio-diversity and this is the most important asset that it can
utilize to generate revenue. It is important to make people understand the actual problems
facing the environment and convey to them the seriousness of the issue.
To cater to the variety of customers, some of the proposed activities at the site of the resort
are as follows-

• Guided Nature hikes

• Bird watching, wild life viewing if any
• Interaction with Field Biologists. Tourists may have an opportunity to discover more
on conservation issues with researchers on site. Depending on scientists schedules,
tourists may be able to help collect data and experience a more intimate relationship
with the wildlife.
• Canopy walkway

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They also plan to have off-site activities and events for members throughout the year such as-
• T-shirts, mugs, conservation kits, calendars, photo-frames for members
• Newsletters, magazines, Guidebook encouraging advertisements
• Events, discussions and conferences with experts, interested, environmentalists

Based on various sectors and implementing differential pricing, we plan to have different
types of memberships-
• Students (1-2 day educational trip, projects, internships)
• Family (2-4 days vacation and leisure amidst nature)
• Researchers, environmentalists (study and conservation work, long duration)
• Corporates (group activities, team-building outward bound exercises, CSR)
• Foreigners (any of the above)

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