Ensuring regional resilience and sustainable business development in the face of high climatic, environmental and social risks

We create knowledge and effective solutions that open up new opportunities to create safe and sustainable society 

1. Why?

1.1. Human well-being improvement and the cumulative benefits of accelerated economic growth have been impressive over the past century. However, this growth and prosperity were based on wasting the benefits of the natural systems that are the foundation of life on Earth and therefore of these economic development [1]. A distinctive feature of modern time is the recognition of the growing ecological footprint of humankind [2] and the transformation of the biosphere into the anthroposphere [3].

1.2. The most dangerous threat is the decline in biodiversity and the growth of risks to human health at a faster rate than at any time in human history. This occurs in all regions at the level of genes, species and habitats [4]. By 2016, 559 of the 6,190 domesticated mammals used for food and agriculture had become extinct, and at least 1,000 more are endangered. On average, about 25% of animal and plant species are endangered (i.e., about 1 million species), and many of them may disappear within several decades [5]. Global indicators of the health and distribution of ecosystems indicate a decrease of 47% on average from the estimated baselines, with many continuing to decline by at least 4% over a decade[6]. In total, 75% of the land surface is undergoing significant changes, 66% of the world's oceans are under increasing cumulative impact, and over 85% of wetlands have already been lost. Land degradation due to human activities affects well-being of at least 3.2 billion people, and the losses from it, expressed in the loss of biodiversity and ecosystem services, account for more than 10% of the annual global gross product[7].

1.3. At the end of the 20th century, the futility of the usual technocratic administrative environmental regulation of anthropogenic impact on the natural environment became obvious. [8]. Countries and peoples are constantly dealing with the social consequences of environmental management, with the emergence and dying of resource monocities and settlements. Every inhabitant of the Earth is facing increasing uncertainties and risks - climatic, environmental, sanitary, etc. They accelerate and complicate other trends of modern development, such as the compression of space (location and communication), the acceleration of urbanization and the growth of geopolitical contradictions. An additional imbalance is brought about by the rapid transition to a new technological order, the massive introduction of a number of globally significant critical technologies [9], unpredictability of their joint impact on people's lives, the speed and trends of social processes. All this exacerbates the obvious nonlinearity of development processes.

1.4. Humanity has entered a period of increasing instability or bifurcation [10], when there is a radical change in existing structures, culture and social systems and institutions. This process is uneven, and the transition to the new economy that has already begun has exacerbated the problem of the multidirectional socioculturally determined institutional changes. In the near future, the face of the global picture of the world will undergo significant changes, and it is important that the new development scenario becomes favorable for people's lives.

Figure 1. Dried, covered with saxaul, bottom of the Aral Sea.

1.5. Almost 30 years ago, we realized the need to find and develop effective approaches and mechanisms to ensure the sustainability of regional and business development. The trigger for this was both our own production practice and the experience of environmental management, which clearly showed that many undoubtedly positive efforts and even selfless activities did not give long-term socially significant results. Then, as well as today, people talk about love for nature and future generations, and at the same time destroy the natural basis of present and future life with their technocratic and reductionist actions. Today, despite high environmental and climatic risks and uncertainties and even the COVID-19 pandemic, there is a lack of systemic action and global cooperation.

2. How?

2.1 The way out of this situation cannot be simple and it cannot be replaced with technical measures for the protection of nature, subsidies to the poor, and humanitarian aid. The systemic and interconnected nature of the ongoing changes radically affects the vision of the very process of human self-development. The idea of an empty world with unlimited possibilities for resource expansion is being replaced by an understanding of its fullness and limitations.

Full anf empty world

Figure 2. Welfare in a full and empty world

Source: Daly H. Economics in a full world // Scientific American. 2005. September. Р. 100-107.

2.2 In a full world, Human-Dominated Ecosystems (HDE) prevail, where Human is an integral and active component (Figure 2). Thus, Human is not an external subject transforming Nature, but as the most important component of the system itself. It not only consumes but also produces ecosystem services. This is connected in many ways with the subject-object ideas of Schelling, according to which Nature and Man are in a dualistic unity and self-development. This implies the need for a dramatic change in the very way of decision-making, limiting the range of choice to scientific environmental knowledge and people's values.

2.3 Human-Dominated Ecosystems are very diverse, which is determined by natural-geographical conditions, the type and intensity of human activities. The most common are urban and rural Human-Dominated Ecosystems. In their nonlinear cyclical development, environemental, economic, social and cultural components are intertwined in a complex way. Similar patterns are typical for the business environment. It is no coincidence that the understanding that it is the health of nature that ensures economic prosperity and well-being is becoming increasingly widespread among responsible entrepreneurs and property owners.

2.4. In an increasingly complex, full world, the role of consciousness with its ethical and value concepts and needs is growing. Meanwhile, the efforts of modern civilization are not aimed at the ability to live in peace with nature. The mechanistic ideas about the complex system of relations "society-nature" are particularly dangerous, as they consider nature as a set of consumed natural resources and inanimate objects.

2.5 In a full world, the category of responsibility becomes basic, because a person takes responsibility not only for the present, but also for future generations.

Values and moral constraints are no longer considered as secondary to the priorities of economic effectiveness, ideas about moral incentives to ensure sustainability are expanding - from local communities to humanity as a whole. It is responsibility that helps a human to make decisions in situations of high uncertainty, when there is very little information, and the cost of a mistake is extremely high. As a value, responsibility motivates decision-makers of countries and regions, the owners of companies and corporations to constantly assess their actions from the standpoint of the acceptability of risks.

3. What do we do?

3.1. Our interdisciplinary scientific research and practical developments on fundamental and applied problems of sustainable development, rational use of natural resources and environmental protection are currently being implemented in many regions of Russia and the world. The broadly understood geographic platform is based on approaches from behavioral geography, neo-institutionalism, socioeconomics, and ethical economics. This puts emphasis on unique regional characteristics. Using the genius loci category, myths and symbols, we strive to understand each territory with its settlements, production facilities, infrastructure, as a unique anthropo-natural system. And on this basis, for each Place, generate exactly those solutions that are most applicable and successful in the long term.

3.2 We apply the concepts of "sustainable development of human-dominated ecosystems", "creating ecosystem servicesflows", use new indicators to analyze the ongoing processes, "throw a new network of measurements on the region". Using these tools we help to see the problems in a new way, understand the prospects for the development of the region and business, opportunities to attract investment and build a sustainable infrastructure. Through our own innovative developments, we help businesses, local authorities, communities to increase their sustainability and competitiveness in a rapidly changing world.

3.3.Our experience, unique databases and pioneering products enable our clients to:

  1. create sustainable business models;
  2. make decisions that increase their resilience;
  3. manage climatic and environmental risks;
  4. choose effective options for environmental management;
  5. find a balance between environmental, economic and social interests;
  6. choose and implement the most sustainable options for infrastructural development;
  7. make effective reporting.

Стратегии решения проблем

Figure 3. Problem solving strategies

Source: Silvio O.Funtowicz Jerome R.Ravetz. Science for the post-normal age. Futures Volume 25, Issue 7, September 1993, Pages 739-755.

Such requirements are now imposed on both responsible business [13], and on the local authorities. It is resilience that has become a key factor in attracting innovation and investment in development. Along with a business reputation and financial stability, the creation of favorable social conditions and a comfortable environment for life are at the forefront. Objects of natural and cultural heritage, as elements of the cultural landscape, acquire a unifying, activity-related significance.

3.4. Methodologically, our approach is based on the synthesis of two paradigms - normative and classical scientific with additions of elements of post-normal science, in relation to situations of high uncertainties and risks (Figure 3). Particular attention is focused on the value, target component. It is recognized that both “expert” and “non-professional” local knowledge are extremely important to enrich the understanding of the current situation and possible improvements, to foresee the future state of the system. The narrative theory of beliefs is used, which reveals a deep value, socio-culturally conditioned awareness and understanding of possibilities and meanings.

3.5. Our work is based on:

  1. the need to achieve Sustainable Development Goals (https://www.un.org/sustainabledevelopment/ru/sustainable-development-goals/), ethical provisions of the Earth Charter [14]. (https://earthcharter.org/), homo responsibilis model adapted for our needs [15]. Without these ideas, it is impossible to consider the issues of ensuring the quality of life, the creation of new sustainable ways of doing business, relevant tools for spatial development, mechanisms for creating conditions for sustainable innovation and investment, new high-quality jobs, the creation of sustainable infrastructure (linear, green, water), as well as arrangement of public and industrial spaces;
  2. the conceptual approaches of the "green" economy [16] (https://www.unenvironment.org/ru/temy/zelenaya-ekonomika), expanded and supplemented with the concept of the "blue" economy (https://www.greengrowthknowledge.org). The "green" production system focuses on eliminating of waste and conservation of resources in a closed cycle and involves creating new structures and supply chains, production technologies and transport delivery systems, as well as the creation and consumption of goods and services with positive environmental and climatic characteristics (in the value chains);
  3. the combination of a market-based economic development, cutting-edge technology inspired by nature (Figure 4), and nature-based solutions (NbS)[17], which are defined by the IUCN as actions to protect, sustainably manage and restore natural or modified ecosystems that effectively and address social challenges while ensuring human well-being and biodiversity conservation.

Figure 4а. A hydroponic facility in the Muynak district of the Republic of Karakalpakstan of Uzbekistan creates new opportunities for the development of livestock farming in dry lands

Figure 4b. The drip irrigation system of an intensive garden in the Kegeyli district of the Republic of Karakalpakstan of Uzbekistan allows you to grow fruits with less water consumption and reduces land salinity

3.6. Nature-based solutions use natural processes and ecosystem services for functional purposes such as reducing flood risk or improving water quality. These interventions can be completely “green” (i.e., consisting only of ecosystem elements) or “hybrid” (i.e., the construction of human-dominated ecosystems including a combination of ecosystem elements and complex engineering structures).

3.7. Resilient communities, strong and sustainable social institutions, thriving natural ecosystems, and a stable climate are at the core of business success, financial markets, and the well-being of communities and individuals [18]. We are developing a methodology for sustainable environmentally and socially oriented regional design, or systemic ecodesign of territories (EDT) [19], as a special type of design thinking and thought activity, which implements in practice the principles of sustainable development of human-dominated ecosystems.

EDT focuses on the design and implementation of engineering, spatial planning and institutional arrangements so that they are environmentally sound and socially and economically viable at the same time. EDT can be considered as a hierarchical structure of spatial system solutions for the implementation of sustainable development goals. This aspect makes it possible to obtain more reliable information material for analyzing costs and benefits, choosing the best option for design solutions, preventing potential conflicts as a result of design changes.

EDT is focused on meeting the inalienable needs of people and protecting the natural habitat, supporting ecological integrity. This implies increased emphasis on ecosystem regeneration [20], nature-based solutions and recycling; interdisciplinary synthesis and its organizational support; creating sustainable water, green and linear infrastructure, etc. The main priority of EDT is the preservation, restoration of disturbed and the creation of new sustainable anthropo-natural systems in the interests of present and future generations of people.

Mapping of risk exposure

Figure 5. Mapped justification for the location of production facilities (search for the best design solution based on health risk management)

3.8. Institutional design, in our opinion, is an integral part of EDT, since any interference in the development of territories or business violates the balance of the existing institutional systems, the balance of interest groups relative to development resources. No project decision will be successful in the long run if it is not accepted by stakeholders as useful and fair, all the more if it comes into conflict with the prevailing set of cultural patterns of behavior and actions.

Noise risk.png

Figure 6. Risk-based territorial management; environmental risk - acoustic safety.

3.9 Institutional design is a goal-oriented change of the institutional system as a set of formal and informal institutions.

In each specific case, it solves a difficult task - so that the project solution, as a reasonable and balanced combination of engineering, technological, organizational and other measures, has sufficient legal and regulatory support and corresponds to the ideas of stakeholders, minimizing the possibility of social conflicts. Therefore, the process of institutional design itself is focused on determining and ensuring the sufficiency of the regulatory norms and rules that have developed in the territory from the point of view of the implementation of the project's goals and the long-term sustainability of its results. It is required to identify the socio-cultural factors on which the effectiveness of the planned design decisions (territorial, production, etc.) depends and to determine the range within which stakeholders will perceive future changes as acceptable. In other words, in order for the project solution to be successful, it is required to ensure a balance between the “unified” (uniform on a global and national scale) and “specific” (unique for a specific territory, business structure) through a special adjustment of the institutional system.

3.10. The modern vision of sustainable development of territories and business presupposes a qualitatively different information and analytical support of decision-making processes and procedures, assessment of their effectiveness. In the modern world with its complex interconnection of financial, economic, social and natural flows of income (capital), decision-makers, primarily heads of firms, territorial authorities, not realizing their real influence and their dependence on these flows, by their actions involuntarily increase the risk of loss of resilience [26]. Understanding this in theory, they nevertheless do not have effective tools for identifying and assessing (in physical and value terms) changes in aggregate wealth (business and territory) as a result of certain decisions they make.

Without such assessments of the full economic value, when the whole range of ecosystem services provided by anthropo-natural systems is taken into account, it is impossible to qualitatively substantiate the effectiveness of social and environmental investments, investments in the innovative development of territory and business, and, in a broader sense, to increase the sustainability of anthropo-natural systems.

3.11. Capital theory expands the scope of traditional concepts of corporate social responsibility (CSR) and allows decision-makers and stakeholders to maximize the usefulness of their decisions in the context of a systematic understanding of the processes of formation of aggregate wealth. Conclusions within the framework of strategic environmental assessments and environmental impact assessments of economic activity projects acquire a completely new meaning, it becomes possible to correctly assess the amount of damage and determine the necessary compensation measures, justify the costs of preserving biodiversity and habitats, maintaining and managing specially protected natural areas. The UN standard for environmental-economic accounting (SEEA- System of Environmental-Economic Accounting)[27], as well as national standards, became the regulatory framework and unifying platform for the new measurement system.

Ecosystem Services Assessment

Figure 7. The economic value of ecosystem and abiotic services of the Novokuznetsk municipal district of the Kemerovo region.

Source: Fomenko G.A., Fomenko M.A., Loshadkin K.A. The economic value of natural capital and strategic environmental assessment. Coal mining area. Sc. ed. G.A. Fomenko. Yaroslavl, 2018[In Russian]

3.12. In the applied aspect, solving various problems of increasing the sustainability of human-dominated ecosystems in a full world, aimed at solving both narrow, special, and complex tasks, we concentrate efforts on the following main areas:

  1. defining goals and priorities for sustainable development of territories, communities, business structures with attention to the value concepts of stakeholders as carriers of knowledge about the dominant system of values ​​and views;
  2. comprehensive optimization of territorial infrastructure - green, blue, linear, etc.;
  3. high-quality adjustment of the institutional environment in order to prevent and reduce the intensity of conflicts of interest arising from the implementation of design decisions;
  4. creation of a new information foundation based on sustainable development indicators (sustainability capital, ESG, etc.), risk assessment (health, environmental, climatic and environmental, business, etc.), on local knowledge, practices, identity, beliefs, worldview etc.

Figure 8. Presentation by G. A. Fomenko, Doctor of Science in Geography, within the Russian Federation delegation, at the 5th OECD / UNECE Joint Seminar on the Implementation of the SEEA with the report "Development of the SEEA and Ecosystem Accounts in the Russian Federation: Prospects, Opportunities and Challenges" (February, 2020). Presentation: https://unece.org/statistics/events/joint-oecdunece-seminar-implementation-seea

3.13. Currently, the main areas of our work (https://npo-kad.ru/projects/) include:

  1. creating development strategies for regions, business strategies, climate strategies, etc., as well as regulatory legal documents, standards, recommendations, etc.;
  2. support of the European "green deal" and others, strategic environmental assessment (SEA), environmental impact assessment (EIA), calculation of the amount of environmental damage and determination of compensation measures;
  3. development of projects and plans for sustainable infrastructure development (road, water, green, etc.);
  4. selection of technologies, development of institutional and infrastructural measures to reduce the risks for resilience of areas of climatic disasters. Specific measures for climate adaptation of households and farms, business;
  5. development and justification of projects for the conservation, restoration and creation of new ecosystems and the ecosystem services;
  6. selection and implementation of mechanisms to prevent and reduce the intensity of socio-cultural conflicts due to access to development resources;
  7. justification, support, assessment of the effectiveness and efficiency of investments and international technical assistance projects in accordance with the Equator Principles;
  8. implementation of a risk-based approach to environmental safety management. Assessment and management of health, environmental, climatic risks, risks of loss of ecosystem services;
  9. development of reports for businesses and regions, for submission to national and international rating systems - GRI, TCFD, CDP. Preparation of state and regional reports on the state and protection of the environment, corporate integrated reports on sustainable development, etc.;
  10. project support for exported and imported climate and nature-saving technologies;
  11. development of macroeconomic indicators of the effectiveness and efficiency of strategies, plans and projects, including the value of natural assets and flows of use, ecosystem services, etc. in accordance with SPEO and EEE standards;
  12. environmental design, environmental engineering documentation, etc.

3.14. The foundation of our work (group of companies Institute for Sustainable Innovations) is a systematic approach to solving the problems of increasing the sustainability of regions and business development in the face of increasing uncertainties and risks. The research results are implemented within  Master program in Yaroslavl State Technical University - "Water use and environmental management on a sustainable basis". We have implemented more than 200 different projects, each of which is supported by a team of high-level specialists. Our main clients: business, banks and investment organizations, international technical support organizations, local and regional governments, national governments, scientific and public organizations. 

4. Our team

Our team, which today includes G.A. Fomenko, D.Sc. in Geograhy; M.A. Fomenko, Ph.D. in Geograhy; K.A. Loshadkin, Ph.D. in Geograhy; A.V. Mikhailova, Ph.D. in Geograhy; O.V. Ladygina, Ph.D. in Technical Sciencies, A.E. Borodkin, Ph.D. in Geograhy, and others, since the beginning of its formation in the 90s of the 20th century, inspired by the ideas of the Brundtland Commission [28], is aimed at implementing the ideas of sustainable development in a variety of form - from in-depth research to specific consulting and project results. We offer solutions to government authorities, the private sector and local communities that increase their resilience in the face of growing uncertainties and risks. For more details, see the Information Center of the Research and Production Association "Institute for Sustainable Innovations".

©Georgy Fomenko

Doctor of Science in Geography, Professor, Academician of the Russian Academy of Natural Sciences, member of the Scientific and Technical Council of the Ministry of Natural Resources and Environment of the Russian Federation, Expert for international projects in the UNDP database.

November 16, 2020