How we helped Royal DSM explore the natural and social capital of OatWell®
In collaboration with Royal DSM we carried out a pilot study on OatWell®. Together we quantified the environmental costs and benefits associated with OatWell®, including the effect on the occurrence of cardiovascular diseases. Results show that the positive environmental and social effects are substantially higher than the environmental costs associated with OatWell®’s value chain.
Occasion of the study
Royal DSM Nutritional Products is one of the world’s leading producers of essential nutrients such as vitamins, carotenoids, nutritional lipids and other ingredients to the feed, food, pharmaceutical and personal care industries. The company supports the movement towards greater transparency through valuing environmental and social impacts. In 2014, DSM signed a Green Deal with the Dutch Government, which is a collaboration on transparency of natural and social capital. An initiative of the nature conservation organization IUCN Netherlands, MVO Nederland and True Price, its purpose is to share and develop knowledge on the topic. In line with this commitment, DSM has been exploring the valuation of positive and negative environmental impacts at a product level. Over 2014 and 2015, DSM extended its study to valuing social impacts, with the product OatWell® from DSM Nutritional Products.
Description and key results
OatWell® is an active ingredient derived from oatmeal that helps lower cholesterol levels and control blood glucose. To value the societal impacts of this ingredient DSM teamed up with True Price and carried out a pilot study. Results show that the positive environmental and social effects are substantially higher than the environmental costs associated with OatWell®’s value chain. Producing OatWell® incurs environmental costs, mainly in water, energy and land use. A part of that costs is compensated because OatWell® replaces wheat that no longer has to be produced. Further significant environmental benefits are expected as a result of reduced food production, since research suggests that people eat considerably less when OatWell® is part of a healthy diet. The final effect is the expected social and economic benefit of reduced cardiovascular diseases, a specific health benefit of OatWell®.
Next to the benefits of OatWell®, additional positive economic values were calculated in the People+ areas of Better Health (reduction in other diseases); Working Condition (safety and health, as well as remuneration); and Community Development (local employment, local sourcing and education).
Advantages and next steps
The environmental and social impacts allow DSM comparison with economic costs. This enables DSM to understand and manage their impact. Altogether, this will encourage the company to think about business models that capture societal value and to create value for society. Moreover, DSM used this case study to officially pilot test the Natural Capital Protocol (NCP). The vision of NCP is to transform the way business operates through understanding and incorporating their impacts and dependencies on natural capital (DSM, 2015).
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