Understanding ecosystem services impact assessment

Ecosystem services reviews are becoming increasingly recognised as an important function in impact assessment services. RSK International Projects Group (IPG) Principal Consultant Daniel McGahey discusses how to navigate the requirements of ecosystem services review for impact assessment to ensure effective project delivery.

An ecosystem services review for impact assessment (ESR for IA) is a systematic and structured method for the assessment of project impacts and dependencies on ecosystem services. Ecosystem services are defined as the benefits people obtain from ecosystems and can include:

• provisioning services, such as food, water, timber and fibre
• regulating services that affect climate, floods, disease, waste and water quality
• cultural services that provide recreational, aesthetic and spiritual benefits
• supporting services such as soil formation, photosynthesis and nutrient cycling.

As an example, a proposed copper mine in rural East Africa integrated an ESR for IA from the outset. While a conventional environmental and social impact assessment (ESIA) would identify rivers, wetlands and forests as sensitive environmental receptors and propose mitigation based on habitat sensitivity, the ESR for IA explicitly examines the relationships between affected ecosystems and their beneficiaries and how project impacts could disrupt ecosystem service supply.

Early engagement and ES mapping identified clear ecosystem–beneficiary linkages. River systems support small-scale irrigation farmers and downstream fishers; wetlands regulate seasonal flooding that protects farms and settlements; and nearby forests provide wild foods, medicinal plants and sacred spaces used by specific community groups, particularly women and elders. The ESR for IA also identified key trends affecting ecosystem service supply, including increased seasonal water scarcity and growing reliance on forest resources during drought years.

By focusing on ecosystem–beneficiary relationships rather than ecosystems alone, the ESR for IA expands the spatial and analytical scope of assessment beyond the immediate project footprint. This understanding informs ecosystem service-specific mitigation measures designed to maintain services for priority beneficiaries. This can lead to only partial assessment of project impacts on the ecosystems services depended upon by both projects and affected communities.

Why is this assessment important?

• Addressing the global biodiversity crisis requires the full integration of biodiversity and its multiple values – such as ecosystem services – into planning and development processes, including ESIAs, across all sectors, particularly those with significant impacts on biodiversity.
• Ecosystems provide a wide variety of benefits to people, and standard ESIAs can misrepresent project impacts on priority ecosystem service benefits.
• Ecosystem services have been incorporated into the International Finance Corporation (IFC) Performance Standards since 2012 to improve the environmental, social and economic sustainability of projects, reflecting this increasing global priority.

The ESR for IA approach can be integrated into the ESIA process or conducted as an independent specialist assessment to align projects with the IFC Performance Standards. Alignment with Performance Standard 6 (PS6) is increasingly seen as international good practice and required by the 80+ Equator Principles Financial Institutions and 32 Organisation for Economic Co-Operation and Development (OECD) export credit agencies.

Key to ESR for IA is completion of a systematic review to identify ecosystem services on which a project directly depends on for operations or those that are relied upon for community wellbeing. This is the case for ecosystem services where projects have direct management control or significant influence likely to result in impacts on services that may adversely affect communities.

Navigating requirements and expectations

A six-step process developed by the World Resources Institute (WRI) can be used to guide ecosystems service assessment integration or complementary analysis as part of an ESIA:

• Identify relevant ecosystem services
• Prioritise relevant ecosystem services
• Define the scope of the ecosystem services assessment
• Establish the baseline for ecosystem services
• Assess project impacts and dependencies on ecosystem services
• Mitigate impacts and manage dependencies on priority ecosystem services

To align with the objectives of IFC PS6, a project must “maintain the benefits from ecosystem services” and ensure the “value and functionality” of identified priority ecosystem services are maintained. The final step in the ESR process should be to review the appropriateness of existing or proposed environmental and social mitigation measures established as part of the ESIA.

At this stage, additional measures may be required where these fall short of mitigating or managing impacts to identified priority ecosystem services and fail to achieve no loss of ecosystem service benefit for stakeholders. Here the mitigation hierarchy should be followed to identify ecosystem-service-specific measures to avoid, minimise, restore and offset any identified loss of benefits. Identified measures to mitigate project impacts and manage project dependencies on priority ecosystem services may then be included in the relevant environmental and social management plans, or a dedicated Ecosystem Services Management Plan may be prepared.

Key principles to consider

Evidence-based assessments of project impacts and dependencies on ecosystem services are a critical part of infrastructure planning. These assessments may take the form of stand-alone technical reviews (i.e., ESR) or be integrated within ESIA processes, guiding the application of the mitigation hierarchy and IFC PS6.

Unlike a traditional ESIA, an ESR for IA explicitly links environmental changes to the ecosystem services that communities rely on, rather than treating ecological and social impacts separately. It identifies specific beneficiary groups, including marginalised users, and considers how project activities affect both service supply and project performance. By extending the analysis beyond the immediate project footprint and incorporating ecosystem service safeguards into mitigation, ESR for IA provides a more integrated and resilient approach to managing environmental and social risks.

To understand how a project may affect ecosystem service benefits, an ESR for IA should first assess how existing trends are changing ecosystems and the services they provide. In many ecosystems, these relationships are poorly understood, and ecological production functions for many services are largely undescribed. Modelling and quantifying all ecosystem services can therefore be challenging and costly. Changes to natural capital may also occur rapidly and may be poorly monitored across landscapes.

Given these complexities, interdisciplinary approaches are often highly effective. Combining expertise from environmental and social practitioners, stakeholder consultation and available biophysical data can help estimate potential changes in service supply and benefits. These methods allow the identification of priority ecosystem services and the evaluation of likely outcomes under a without-project scenario.

Once these linkages among ecosystem supply, use and benefits are established, and stakeholder sensitivity to changes is understood, it becomes possible to assess how project impacts may alter the benefits that stakeholders derive from affected ecosystems.