User Register / Login

Enabling Business Decisions That Integrate Natural Capital: Learning From a Complex Systems Perspective

November 23, 2015 |

Screen Shot 2016-08-18 at 13.30.37The central focus of this paper is enabling better business decisions by taking natural capital into account. In exploring this we give speci c attention to elements that promote up scaling the Natural Capital Protocol (the Protocol), an important tool for improving business decision-making that the Natural Capital Coalition (the Coalition) is currently developing and pilot testing.

Fishing regulations usually specify minimum catch size limitations to protect smaller sh. It seems intuitive that protecting the young sh helps to sustain sheries. But according to George Sugihara1 that intuition is wrong. “It’s not the young ones that should be thrown back but the larger, older sh that should be spared,” he explains. They stabilize the population and provide “more and better quality o spring.” Such seemingly commonsense policies, can lead

to boom and bust cycles. Fishing populations are systems that should be analyzed using complexity tools as Sugihara has done, and not assuming they are equilibrium systems, behaving linearly: understanding sheries requires grasping their systemic nature.

Responsible use of natural resources is often subject to such systemic dynamics. Policies and metrics that aim to improve the health of our natural environment and the way we exploit natural resources need to take into account these e ects. In this paper, we explore how to create an enabling environment for natural capital to be integrated into business decisions. In order to do so, we aim to further broaden our perspective. Therefore we look at the issue through a systems lens, in order to discover whether this yields new ideas for action.

The enabling environment should not only support current front-runners that are already interested in the Protocol, but help create broader interest in the business community, with the aim to mainstream natural capital thinking in all businesses, from SMEs to corporates. We also want to look beyond today’s companies: the average life expectancy of rms is less than 15 years and around 40 for the only largest companies. How can new companies be in uenced to include natural capital considerations early on? Should one expect a changed approach in care for nature to come from the existing system, or focus attention on the renewal of the economic system with di erent features? Are there other systemic e ects; such as is the case with the sheries? It is the old adage of working within the system – or working to create a new system.

Our ambition here is merely to stimulate the discussion, rather than to provide de nitive answers. First we set the ‘natural capital scene’, by shortly describing the emerging movement of better business decision-making by taking natural capital into account. Then, we explore lessons that can be derived from a systems lens, building on our growing understanding of the dynamics
of complex systems. Subsequently we present possible elements of an enabling environment to better integrate natural capital in business decisions through the Protocol. Then we re ect on systemic e ects that may require new policy approaches. We conclude with next steps and an invitation to join the discussion.

Download the report here.

Benefit from the Coalition’s unique overview of the capitals approach and community, gain insights into the latest thinking and developments and receive newsletters and project updates.